Conduct of Business. During the period from the date of this Agreement to the Effective Time, except as consented to in writing in advance by VMware or as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) by this Agreement, Pivotal shall, and shall cause each of its Subsidiaries to, carry on its business in the ordinary course, including its development and sales efforts as currently contemplated, and use commercially reasonable efforts to (i) preserve intact its business organization, assets, rights and properties, (ii) keep available the services of its current officers, employees and consultants and (iii) preserve its goodwill and its relationships with customers, suppliers, licensors, licensees, distributors and others having material business dealings with it. In addition to and without limiting the generality of the foregoing, during the period from the date of this Agreement to the Effective Time, except (x) as set forth in section 5.1 of the Pivotal Disclosure Letter, (y) as specifically required by this Agreement or (z) as specifically required by applicable Law, Pivotal shall not, and shall not permit any of its Subsidiaries, without VMware’s prior written consent (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), to: (a) (i) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock or other equity interests, except for dividends by a wholly owned Subsidiary of Pivotal to Pivotal or any other wholly owned Subsidiary of Pivotal, (ii) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii) split, combine, reclassify or otherwise amend the terms of any of its capital stock or other equity 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 other equity interests; (b) issue, deliver, sell, grant, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) any shares of its capital stock or other equity interests or any securities convertible into, exchangeable for or exercisable for any such shares or other equity interests, or any rights, warrants or options to acquire, any such shares or other equity interests, or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive shares of capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof (other than the issuance of Class A Shares upon the exercise of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPP, in each case, that are outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with their terms as in effect on such date); (c) amend or otherwise change, or authorize or propose to amend or otherwise change, its certificate of incorporation or bylaws (or similar organizational documents); (d) directly or indirectly acquire or agree to acquire (i) by merging or consolidating with, purchasing a substantial equity interest in or a substantial portion of the assets of, making an investment in or loan or capital contribution to or in any other manner, any corporation, partnership, association or other business organization or division thereof or (ii) any assets that are otherwise material to Pivotal and its Subsidiaries, except, in each case, for (1) capital expenditures which shall be subject to the limitations of clause (i) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes in the ordinary course of business consistent with Pivotal’s investment management policy, and except in the case of clause (ii), acquisitions of inventory, products or services in the ordinary course of business; Table of Contents (e) directly or indirectly sell, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien or otherwise dispose in whole or in part of any of its material properties, assets or rights (including any material Pivotal Intellectual Property Registrations) or any interest therein, except, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Out; (f) adopt or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization; (g) fail to maintain, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations; (h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, other than Pivotal or any direct or indirect wholly owned Subsidiary of Pivotal; (i) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto that in the aggregate are in excess of $1,000,000; (j) except as required by any judgment by a court of competent jurisdiction, (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge or satisfaction in the ordinary course of business, (B) as required by their terms as in effect on the date of this Agreement of claims, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements in the ordinary course of business, (ii) cancel any material Indebtedness owed to Pivotal or any of its Subsidiaries, or (iii) waive, release, grant or transfer any right of material value; (k) (i) materially modify, materially amend, terminate, cancel, waive any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (ii) enter into any Contract that if in effect on the date hereof would be a Material Contract, other than customer contracts entered into in the ordinary course of business; (l) commence any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal or any of its Subsidiaries), or compromise, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements in the ordinary course of business that involve only the payment of money damages not in excess of $500,000 individually or $2,000,000 in the aggregate, in any case without the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal or any of its Subsidiaries; (m) change its financial or Tax accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law; (n) settle or compromise any material liability for Taxes or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liability; consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of a material amount of Taxes; grant any power of attorney with respect to material Taxes; enter into any Tax Sharing Agreement or any closing agreement or other similar agreement; or change any method of accounting for Tax purposes;
Appears in 3 contracts
Samples: Merger Agreement (Vmware, Inc.), Merger Agreement (Dell Technologies Inc), Merger Agreement (Dell Technologies Inc)
Conduct of Business. During the period from the date of this Agreement to the Effective Time, except Except as consented to in writing in advance by VMware expressly permitted or as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) by this Agreement, Pivotal shall, and shall cause each of its Subsidiaries to, carry on its business in the ordinary course, including its development and sales efforts as currently contemplated, and use commercially reasonable efforts to (i) preserve intact its business organization, assets, rights and properties, (ii) keep available the services of its current officers, employees and consultants and (iii) preserve its goodwill and its relationships with customers, suppliers, licensors, licensees, distributors and others having material business dealings with it. In addition to and without limiting the generality of the foregoingrequired by applicable Law, during the period from the date of this Agreement to until the Effective Time, except earlier of (x) termination of this Agreement in accordance with Section 10.1 and (y) the Closing, unless the Investors otherwise consent in writing, the Company shall, and shall cause the Company Subsidiaries to, conduct their businesses only in the ordinary course of business in all material respects consistent with past practice. Without limiting the foregoing, except as set forth in section 5.1 of the Pivotal Disclosure Letter, (y) as specifically expressly permitted or required by this Agreement or (z) Agreement, as specifically required by applicable LawLaw or as consented to in writing by the Investors, Pivotal the Company shall not, and shall not permit any of its Subsidiariesthe Company Subsidiaries to, without VMware’s prior written consent (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), to:
(a) (i) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock or other equity interests, except for dividends by a wholly owned Subsidiary of Pivotal to Pivotal or any other wholly owned Subsidiary of Pivotal, (ii) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on between the date of this Agreement and (B) the acquisition by Pivotal earlier to occur of Pivotal Options or Pivotal RSUs on the date termination of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on Section 10.1 and the date of this AgreementClosing, or (iii) split, combine, reclassify or otherwise amend the terms of take any of its capital stock or other equity interests or issue or authorize the issuance following actions:
(a) take any action that, if taken immediately following the Closing, would require the approval of the holders of a majority of the Series A Preferred Stock (on an as-converted basis, including any other securities in respect of, in lieu of or in substitution for shares of its capital stock Common Stock issued upon the conversion thereof) that is held by the Investors or other equity interestsany of their respective Affiliates;
(b) issueestablish a record date for, deliverdeclare, sellset aside for payment or make payment in respect of, grant, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act dividend or other applicable securities Laws) distribution upon any shares of its capital stock or other equity interests or any securities convertible into, exchangeable for or exercisable for any such shares or other equity interests, or any rights, warrants or options to acquire, any such shares or other equity interests, or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive shares of capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof (other than the issuance of Class A Shares upon the exercise of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPP, in each case, that are outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with their terms as in effect on such date)Company;
(c) amend create, issue, sell or otherwise changegrant or authorize the issuance, sale or grant of any equity securities of the Company or any of the Company Subsidiaries with rights or preferences senior to, or authorize or propose to amend or otherwise changepari passu with, its certificate of incorporation or bylaws (or similar organizational documents)the Series A Preferred Stock;
(d) directly enter into any transaction that, if consummated, would cause the Company to be delisted from the NASDAQ Stock Market or indirectly acquire prohibit the Company from being listed or agree to acquire (i) by merging or consolidating with, purchasing a substantial equity interest in or a substantial portion of the assets of, making an investment in or loan or capital contribution to or in quoted for trading on any other mannerU.S. national securities exchange; provided, any corporationhowever, partnership, association or other business organization or division thereof or (ii) any assets that are otherwise material to Pivotal and its Subsidiaries, except, in each case, for (1) capital expenditures which shall be subject to the limitations of this clause (id) below and (2) purchases shall not apply to any transaction that is a "Change of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes Control" as defined in the ordinary course Series A Certificate of business consistent with Pivotal’s investment management policy, and except in the case of clause (ii), acquisitions of inventory, products or services in the ordinary course of business; Table of ContentsDesignations;
(e) directly amend or indirectly sell, lease, license, sell and leaseback, abandon, allow propose to lapse, mortgage amend the Company Charter Documents or otherwise encumber or subject to any Lien or otherwise dispose the Subsidiary Charter Documents in whole or in part of any of its material properties, assets or rights (including any material Pivotal Intellectual Property Registrations) or any interest therein, except, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior a manner that is materially adverse to the Effective Time pursuant to existing Contracts that are not material to Pivotal rights and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Outpreferences of the Series A Preferred Stock;
(f) adopt take any action that would reasonably be expected to prevent or enter into a plan materially impede, interfere with, hinder or delay the consummation of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;the Transactions; or
(g) fail to maintainagree, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, other than Pivotal or any direct or indirect wholly owned Subsidiary of Pivotal;
(i) incur resolve or commit to incur any capital expenditure or authorization or commitment with respect thereto that in the aggregate are in excess of $1,000,000;
(j) except as required by any judgment by a court of competent jurisdiction, (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge or satisfaction in the ordinary course of business, (B) as required by their terms as in effect on the date of this Agreement of claims, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements in the ordinary course of business, (ii) cancel any material Indebtedness owed to Pivotal or take any of its Subsidiaries, or (iii) waive, release, grant or transfer any right of material value;
(k) (i) materially modify, materially amend, terminate, cancel, waive any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (ii) enter into any Contract that if in effect on the date hereof would be a Material Contract, other than customer contracts entered into in the ordinary course of business;
(l) commence any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal or any of its Subsidiaries), or compromise, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements in the ordinary course of business that involve only the payment of money damages not in excess of $500,000 individually or $2,000,000 in the aggregate, in any case without the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal or any of its Subsidiaries;
(m) change its financial or Tax accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law;
(n) settle or compromise any material liability for Taxes or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liability; consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of a material amount of Taxes; grant any power of attorney with respect to material Taxes; enter into any Tax Sharing Agreement or any closing agreement or other similar agreement; or change any method of accounting for Tax purposes;foregoing actions.
Appears in 3 contracts
Samples: Securities Purchase Agreement (Rimini Street, Inc.), Securities Purchase Agreement (Rimini Street, Inc.), Securities Purchase Agreement (Rimini Street, Inc.)
Conduct of Business. During the period from the date of this Agreement to the Effective Time, except as consented to in writing in advance by VMware Parent (such consent not to be unreasonably withheld, conditioned or delayed) or as otherwise expressly specifically required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) permitted by this Agreement, Pivotal the Company shall, and shall cause each of its Subsidiaries to, carry on its business in all material respects in the ordinary course, including its development and sales efforts as currently contemplated, course consistent with past practice and use commercially reasonable best efforts to (i) preserve intact its business organization, preserve its assets, rights and propertiesproperties in good repair and condition, (ii) keep available the services of its current officers, employees and consultants and (iii) preserve its goodwill and its relationships with customers, suppliers, licensors, licensees, distributors and others having material business dealings with it. In addition to and without limiting the generality of the foregoing, during the period from the date of this Agreement to the Effective Time, except (x) as set forth in section Section 5.1 of the Pivotal Company Disclosure Letter, (y) Letter or as specifically required or permitted by this Agreement or (z) as specifically required by applicable Law, Pivotal without Parent’s prior written consent (such consent not to be unreasonably withheld, conditioned or delayed), the Company shall not, and shall not permit any of its Subsidiaries, without VMware’s prior written consent (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), Subsidiaries to:
(a) (i) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock or other equity interests, except for dividends by a wholly owned Subsidiary of Pivotal the Company to Pivotal the Company or any other of its wholly owned Subsidiary of PivotalSubsidiaries, (ii) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal the Company or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, other than (A) in connection with the withholding exercise of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to Company Stock Options or the Pivotal Stock Plans and vesting or forfeiture of Company Restricted Shares, in each case that are outstanding on the date hereof in accordance with the terms of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii) split, combine, reclassify or otherwise amend the terms of any of its capital stock or other equity 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 other equity interests;
(b) issue, deliver, sell, grant, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) any shares of its capital stock or other equity interests or any securities convertible into, or exchangeable for or exercisable for any such shares or other equity interestsfor, or any rights, warrants or options to acquire, any such shares or other equity interests, or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive shares of capital stock of VMware the Company on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof (other than the issuance of Class A Shares upon the exercise of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPP, in each case, that are Company Stock Options outstanding on the date of this Agreement and Made Available to VMware and otherwise hereof in accordance with their the terms as in effect on such dateof this Agreement);
(c) amend or otherwise changeamend, or authorize or propose to amend or otherwise change, its certificate articles of incorporation or bylaws (or similar organizational documents);
(d) directly or indirectly acquire or agree to acquire (i) by merging or consolidating with, purchasing a substantial equity interest in or a substantial portion of the assets of, making an investment in or loan or capital contribution to or in any other manner, any corporation, partnership, association or other business organization or division thereof or (ii) any assets that are otherwise material to Pivotal the Company and its Subsidiaries, except, other than in each case, for (1) capital expenditures which shall be subject to the limitations of clause (i) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes case in the ordinary course of business consistent with Pivotal’s investment management policy, and except in the case of clause (ii), acquisitions of inventory, products or services in the ordinary course of business; Table of Contentspast practice;
(e) directly or indirectly sell, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien (other than Permitted Liens) or otherwise dispose in whole or in part of any of its material properties, assets or rights (including or any material Pivotal Intellectual Property Registrations) or any interest therein, exceptexcept in the ordinary course of business consistent with past practice or as expressly required by the terms of any Contracts in force as of, in each caseand provided to Parent prior to, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Outdate of this Agreement;
(f) adopt or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive repay or prepay, any indebtedness for borrowed money, any obligations under conditional or installment sale Contracts or other retention Contracts relating to purchased property, any capital lease obligations or any guarantee or any such indebtedness of any other Person, issue or sell any debt securities, options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of any other Person, enter into any “keepwell” or other agreement to maintain any financial statement condition of any other Person or enter into any arrangement having the economic effect of any of the foregoing, in each case other than (i) deposits, (ii) federal funds borrowings and (iii) borrowings from the Federal Home Loan Bank of Dallas (provided that, in the case of (ii) and (iii) above, the maturity of any such borrowings does not exceed thirty (30) days) (collectively, “Indebtedness”), or amend, modify or refinance any Indebtedness or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, other than Pivotal or any direct or indirect wholly owned Subsidiary of PivotalIndebtedness;
(ih) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto that in the aggregate are is in excess of $1,000,00050,000;
(ji) except as required by any judgment by a court of competent jurisdiction, (i) pay, discharge, settle or satisfy any material claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge or satisfaction in the ordinary course of business, (B) business consistent with past practice or as required by their terms as in effect on the date of this Agreement of claims, liabilities or obligations reflected or reserved against in on the most recent audited financial statements (or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof Balance Sheet (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements the Balance Sheet in the ordinary course of business, business consistent with past practice or (ii) cancel any material Indebtedness owed to Pivotal or any of its Subsidiaries, or (iii) waive, release, grant or transfer any right of material valuevalue to the Company or its Subsidiaries other than in the ordinary course of business consistent with past practice;
(kj) (i) materially modify, materially amend, terminate, cancel, waive any material right under cancel or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (ii) enter into any Contract that if in effect on the date hereof would be a Material Contract, other than customer contracts entered into in the ordinary course of business;
(lk) commence any Legal Proceeding Action (other than a Legal Proceeding an Action as a result of a Legal Proceeding an Action commenced against Pivotal the Company or any of its Subsidiaries), or except as otherwise permitted by Section 5.10, compromise, settle or agree to settle any Legal Proceeding, Action (including any Action relating to this Agreement or the transactions contemplated hereby) other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements in the ordinary course of business consistent with past practice that (i) involve only the payment of money damages not in excess of $500,000 50,000 individually or $2,000,000 200,000 in the aggregate, in any case (i) without the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal the Company and (ii) that would not create adverse precedent for claims that are reasonably likely to be material to the Company or any of its Subsidiaries;
(ml) change its financial or Tax accounting methods, principles or practices, except or revalue any of its material assets except, in each case, insofar as may have been is required by a change in GAAP GAAP, applicable Law or applicable Lawregulatory accounting policies;
(nm) settle make or compromise change any material liability for Taxes Tax election except as required by applicable Law, settle, compromise or enter into any closing agreement with any Tax Authority with respect to any material Tax claim, audit or assessment, surrender any right to claim a material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liability; consent to any extension or waiver of the limitation period applicable to any claim Tax claim, audit or assessment assessment, or change any annual Tax accounting period or method of Tax accounting, in respect each case except in the ordinary course of business consistent with past practice;
(n) change its fiscal or Tax year;
(o) except as required by applicable Law or the terms of a material amount of Taxes; Company Plan as in effect on the date hereof, (i) grant any power current or former director, officer, employee or independent contractor any increase in compensation, bonus or other benefits, other than increases in annual base salaries or wage rates in the ordinary course of attorney business consistent with past practice that do not exceed 3% for any individual, or pay any bonus of any kind or amount to any current or former director, officer, employee or independent contractor, (ii) grant or pay any current or former director, officer, employee or independent contractor any severance, change in control or termination pay, or modifications thereto or increases therein, (iii) grant or amend any equity or equity-based award, (iv) adopt or enter into any collective bargaining agreement or other labor union contract, (v) take any action to accelerate the vesting or payment of any compensation or benefit under any Company Plan or other Contract, (vi) adopt any new employee benefit plan or arrangement that would be a Company Plan or amend, modify or terminate any existing Company Plan or (vii) hire or terminate, other than for cause, the employment of any officer holding the position of senior vice president or above or any employee with base salary in excess of $100,000, except as contemplated by Section 2.2(b)(3)(y) of the Company Disclosure Letter;
(p) fail to keep in force insurance policies or replacement or revised provisions regarding insurance coverage with respect to material Taxes; the assets, operations and activities of the Company and its Subsidiaries as currently in effect;
(q) renew or enter into any Tax Sharing Agreement non-compete, exclusivity, non-solicitation or similar agreement that would restrict or limit, in any material respect, the operations of the Company or any closing of its Subsidiaries;
(r) except as permitted by Section 5.2, waive any material benefits of, or agree to modify in any adverse respect, or fail to enforce, or consent to any matter with respect to which its consent is required under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is a party;
(s) enter into any new line of business outside of its existing business;
(t) enter into any new lease of real property, other than renewals in the ordinary course of business consistent with past practice, or materially amend the terms of any existing lease of real property;
(u) change, in any material respect, the credit, loan pricing, loan risk rating, underwriting, recognition of charge-offs or other similar agreementmaterial policies of the Company or any of its Subsidiaries except as required by Law or by rules or policies imposed by a Governmental Entity;
(v) make any new, or renew, restructure or enter into any material modification of any existing, Loans with an unpaid principal balance in excess of $250,000 (other than any conforming real estate mortgage loan originated in the ordinary course of business and consistent with past practice with an approved take-out commitment from an existing correspondent bank relationship) or manage its Loan portfolio in a manner that is outside of the ordinary course of business or inconsistent with past practice;
(w) pay or offer to pay interest rates on any deposits, including new and renewed time deposits, that are materially inconsistent with prevailing market rates for such deposits or solicit or accept any brokered deposits, including brokered certificates of deposit;
(x) sell or transfer any existing investment securities or otherwise manage its investment securities portfolio or its derivatives portfolio in a manner that in either case is outside of the ordinary course of business or inconsistent with past practice; provided that the Company shall not purchase any fixed income securities other than those issued, insured or change guaranteed by the U.S. Treasury, a U.S. government agency or U.S. government sponsored enterprise with a final maturity of three (3) years or less;
(y) make application for the opening, relocation or closing of any, or open, relocate or close any, branch office, loan production office or other significant office or operations facility;
(z) engage in (or modify in a manner adverse to the Company or its Subsidiaries) any method transactions (except for any ordinary course banking relationships permitted under applicable law) with any Affiliate or any director or officer (senior vice president or above) thereof (or any Affiliate or immediate family member of accounting for Tax purposes;any such person or any Affiliate of such person’s immediate family members); or
(aa) authorize any of, or commit, resolve or agree to take any of, the foregoing actions.
Appears in 3 contracts
Samples: Merger Agreement (Green Bancorp, Inc.), Merger Agreement (Green Bancorp, Inc.), Merger Agreement (SP Bancorp, Inc.)
Conduct of Business. During Except as expressly contemplated or permitted by this Agreement, as required by applicable Law or as set forth in Section 5.1 of the Company Disclosure Schedule, during the period from the date of this Agreement to until the Effective Time, except as consented to unless Parent otherwise consents in writing in advance by VMware (which consent shall not be unreasonably withheld, delayed or as otherwise expressly required or prohibited (including by conditioned), the restrictions set forth in subclauses (a) through (r) below) by this Agreement, Pivotal Company shall, and shall cause each of its Subsidiaries to, carry on (x) conduct its business in a manner consistent with past practices, in all material respects in the ordinary course, including its development and sales efforts as currently contemplatedcourse of business, and in material compliance with applicable Laws, (y) preserve intact the material aspects of its business organization and business relationships, and (z) use commercially reasonable efforts to (i) preserve intact its business organization, assets, rights and properties, (ii) keep available the services of its current officers, officers and key employees and consultants and (iii) preserve its the goodwill of the Company and its relationships with customersSubsidiaries, suppliers, licensors, licensees, distributors and others having material business dealings with ittaken as a whole. In addition to and without limiting the generality of the foregoing, during the period from the date of this Agreement to the Effective Time, except (x) as set forth in section 5.1 of the Pivotal Disclosure Letter, (y) as specifically required by this Agreement or (z) as specifically required by applicable Law, Pivotal The Company shall not, and shall not permit any cause each of its Subsidiaries, without VMware’s prior written consent (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall Subsidiaries not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), to:
(a) (i) declareissue, set aside or pay any dividends ontransfer, or make any other distributions (whether in cashdeliver, stock or property) in respect dispose of, pledge, encumber, sell or grant any shares of its capital stock or any other of its equity or voting securities or other ownership interests, except or any securities, warrants, options or other rights convertible into, exchangeable or exercisable for, or evidencing the right to subscribe for dividends by a wholly owned Subsidiary any shares of Pivotal to Pivotal its capital stock or any other wholly owned Subsidiary of Pivotalits equity or voting securities or other ownership interests; provided, (ii) purchase, redeem or otherwise acquire that the Company may issue shares of capital stock Company Common Stock required to be issued upon exercise or other equity interests settlement of Pivotal Options, DSAs or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and RSAs outstanding on the date of this Agreement or as permitted by this Agreement, and disclosed to Merger Sub in accordance with their the terms on of the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options applicable Company Stock Plan or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement Plan in connection with the forfeiture of such awards, in accordance with their terms effect on the date of this Agreement, or (iii) split, combine, reclassify or otherwise amend the terms of any of its capital stock or other equity 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 other equity interests;
(b) issueredeem, deliver, sell, grant, pledge purchase or otherwise encumber or subject to acquire any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) any its outstanding shares of its capital stock or any other of its equity interests or any voting securities convertible into, exchangeable for or exercisable for any such shares or other equity ownership interests, or any rights, warrants or options to acquire, acquire any such shares of its capital stock or any other of its equity or voting securities or other equity ownership interests, except in connection with withholding to satisfy Tax obligations with respect to Options, acquisitions in connection with the forfeiture of equity awards or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive shares acquisitions in connection with the net exercise of capital stock Options in accordance with the terms of VMware on a deferred basis the applicable Company Stock Plan or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as Plan in effect on the date hereof (other than the issuance of Class A Shares upon the exercise of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPP, in each case, that are outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with their terms as in effect on such date)Agreement;
(c) amend other than the Contingent Dividend, declare, set aside for payment or otherwise changepay any dividend on, or authorize make any other distribution in respect of, any shares of its capital stock or propose any other of its equity or voting securities or other ownership interests (other than dividends or distributions payable by a wholly-owned Subsidiary of the Company to amend the Company or otherwise change, its certificate another wholly-owned Subsidiary of incorporation or bylaws (or similar organizational documentsthe Company);
(d) directly split, combine, subdivide or indirectly acquire or agree to acquire reclassify any shares of its capital stock;
(e) (i) by merging incur any indebtedness for borrowed money (excluding (x) any letters of credit issued in the ordinary course of business consistent with past practice and (y) inter-company indebtedness among the Company and its Subsidiaries in the ordinary course of business consistent with past practice); (ii) issue, sell or consolidating with, purchasing a substantial equity interest in amend or a substantial portion accelerate the conversion of any debt securities or warrants (including any convertible debt securities) or other rights to acquire any debt securities of the assets ofCompany or any of its Subsidiaries, making an guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic affect of any of the foregoing; (iii) make any loans, advances or capital contributions to, or investment in or loan or capital contribution to or in loans to, any other mannerPerson, other than the Company or any of its direct or indirect wholly-owned Subsidiaries; (iv) forgive or make any loans to any employees, officers or directors of the Company or its Subsidiaries or any of their respective Affiliates; or (v) enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or any of its Subsidiaries against fluctuations in exchange rates;
(f) sell, lease, license, pledge, encumber or otherwise dispose of (i) any of the Company’s or its Subsidiaries’ material properties or material assets other than sales or licenses of products in the ordinary course of business, or (ii) any Subsidiary of the Company;
(g) sell, assign, license, sublicense, abandon, permit to lapse, fail to otherwise protect its rights in, or otherwise transfer or dispose of any of its material technology or Intellectual Property (except for nonexclusive licenses made in the ordinary course of business consistent in all material respects with its past practices) or acquire any Intellectual Property (or any license thereto) from any third party (other than licenses of commercially available software) or transfer or provide a copy of any source code of the Company to any Person other than (i) to employees or consultants of the Company or any of its Subsidiaries who have a reasonable need to access such source code in the course of performance of their duties for the Company or any such Subsidiary or (ii) pursuant to customer agreements that are in existence on the date hereof or that are entered into hereafter in the ordinary course of business containing licenses of Intellectual Property, if any, consistent with past practice;
(h) subject to Section 5.2, disclose any Confidential Information other than pursuant to confidentiality agreements that preserve all rights of the Company and its Subsidiaries in such Confidential Information;
(i) make capital expenditures or other expenditures with respect to property, plant or equipment outside the ordinary course of business, consistent with past practice;
(j) make any acquisition of (i) any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof (including by merger, consolidation or acquisition of stock or assets or any other business combination) or (ii) any assets outside the ordinary course of business consistent with past practice;
(k) except as required by applicable Law or any Plan in existence as of the date hereof or set forth on Section 5.1(k) of the Company Disclosure Schedule, (i) establish, adopt or amend any collective bargaining agreement, change of control or severance agreement or plan, (ii) establish, adopt, enter into or amend any Plan, consulting, retention or employment agreement, (iii) pay any bonus, increased salary, severance, retention or special remuneration or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, any of its directors, officers, executives, employees or consultants, (iv) terminate any employee of the Company or any of its Subsidiaries except for cause, due to action or inaction of the employee, as determined in good faith by the Company in its reasonable discretion or (v) engage in any employee terminations, layoffs or other actions that are otherwise could trigger liability under WARN (excluding any Liability arising out of or relating to or as a result of any actions taken by Parent or any of its Affiliates on or after the Closing);
(l) cancel, amend, violate, breach or modify in any material to Pivotal and its Subsidiariesrespect, exceptor terminate, or waive any material right or remedy under, any Company Material Contract, or enter into any Material Contract, in each case, for (1) capital expenditures which shall be subject to the limitations of clause (i) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes other than in the ordinary course of business consistent with Pivotal’s investment management policy, and except in the case of clause (ii), acquisitions of inventory, products or services in the ordinary course of business; Table of Contentspast practice;
(em) directly enter into, renew or indirectly sellextend any agreements or arrangements that contains covenants that materially limit or restrict the Company, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien or otherwise dispose in whole or in part of any of its material propertiesSubsidiaries, assets or rights (including any material Pivotal Intellectual Property Registrations) or any interest therein, except, of their respective successors from engaging or competing in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior any business that is material to the Effective Time pursuant to existing Contracts that are not material to Pivotal business currently conducted by the Company and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Outwhole, or any currently contemplated lines of business, with any Person in any geographic area for any period of time, other than in the ordinary course of business consistent with past practice;
(fn) amend the Company Charter Documents or any of the organizational documents of its Subsidiaries;
(o) settle or compromise any suit, action, claim, proceeding, investigation or arbitration, other than compromises, settlements or agreements that involve only the payment of monetary damages not in excess of $250,000 individually or $500,000 in the aggregate, without the imposition of equitable relief on, or the admission of wrongdoing by, the Company or any of its Subsidiaries;
(p) fail to keep in force insurance policies or replacement or revised provisions providing insurance coverage consistent in all material respects with respect to the assets, operations and activities of the Company and its Subsidiaries as are currently in effect;
(q) authorize, recommend, adopt or enter into a plan or agreement of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay reorganization of the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, other than Pivotal or any direct or indirect wholly owned Subsidiary of Pivotal;
(i) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto that in the aggregate are in excess of $1,000,000;
(j) except as required by any judgment by a court of competent jurisdiction, (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge or satisfaction in the ordinary course of business, (B) as required by their terms as in effect on the date of this Agreement of claims, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements in the ordinary course of business, (ii) cancel any material Indebtedness owed to Pivotal or any of its Subsidiaries, or (iii) waive, release, grant or transfer any right of material value;
(k) (i) materially modify, materially amend, terminate, cancel, waive any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (ii) enter into any Contract that if in effect on the date hereof would be a Material Contract, other than customer contracts entered into in the ordinary course of business;
(l) commence any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal or any of its Subsidiaries), or compromise, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements in the ordinary course of business that involve only the payment of money damages not in excess of $500,000 individually or $2,000,000 in the aggregate, in any case without the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal Company or any of its Subsidiaries;
(mr) make or change its financial any material Tax election or material method of Tax accounting, settle or compromise any material Tax Liability, agree to an extension or waiver of the statute of limitations with respect to the assessment or determination of Income Taxes other than in the ordinary course of business, enter into any material closing agreement with respect to any Income Tax or surrender any right to claim a material Tax refund;
(s) make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable LawGAAP;
(nt) settle engage in (i) any trade loading practices or compromise any material liability for Taxes other promotional sales or surrender discount activity with any material claim for a refund customers or distributors with the effect of Taxes; file any amended Tax Return or claim for Tax refund; makeaccelerating to pre-Effective Time periods sales that would otherwise be expected to occur in post-Effective Time periods, revoke or modify any material Tax election, or change the entity classification in each case outside of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis business, consistent with past practices, (ii) any practice which would have the effect of accelerating to pre-Effective Time periods collections of receivables that would materially and adversely affect otherwise be expected to be made in post-Effective Time periods, or (iii) any practice which would have the effect of postponing to post-Effective Time periods payments by the Company or any of its Tax liability; consent Subsidiaries that would otherwise be expected (based on past practice) to be made in pre-Effective Time periods;
(u) agree, in writing or otherwise, to take any extension action which would in any material respect impede or waiver delay the ability of the limitation period applicable parties hereto to satisfy any claim or assessment of the conditions to the Merger set forth in respect of a material amount of Taxesthis Agreement; grant any power of attorney with respect to material Taxes; or
(v) announce an intention, enter into any Tax Sharing Agreement or any closing agreement or other similar agreement; or change otherwise make a commitment to take any method of accounting for Tax purposes;the foregoing actions.
Appears in 3 contracts
Samples: Merger Agreement (Ulticom, Inc), Merger Agreement (Ulticom, Inc), Merger Agreement (Ulticom, Inc)
Conduct of Business. During the period Except as otherwise (a) expressly permitted or contemplated by this Agreement, (b) required by Law, or (c) with Parent’s prior written consent (such consent not to be unreasonably withheld, conditioned or delayed), from the date of this Agreement to the Effective Time, except as consented to in writing in advance by VMware or as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) by this Agreement, Pivotal Company shall, and shall cause each of its Subsidiaries Company Subsidiary to, carry on conduct its business in the usual, regular and ordinary course, including its development and sales efforts course in substantially the same manner as currently contemplated, previously conducted or proposed to be conducted and use commercially reasonable efforts to (i) preserve intact its current business organization, assets, rights and properties, (ii) keep available the services of its current officers, officers and employees and consultants and (iii) preserve its goodwill and keep its relationships with customers, suppliers, licensors, licensees, distributors and others having material business dealings with itthem; provided, however, that any action taken or failure to act by or at the express direction of either Executive that would otherwise constitute a breach of this Section 5.01 shall not be deemed to constitute such a breach. In addition to addition, and without limiting the generality of the foregoing, during the period except as otherwise (i) expressly permitted or contemplated by this Agreement, (ii) required by Law, or (iii) with Parent’s prior written consent (such consent not to be unreasonably withheld, conditioned or delayed), from the date of this Agreement to the Effective Time, except (x) as set forth in section 5.1 of the Pivotal Disclosure Letter, (y) as specifically required by this Agreement or (z) as specifically required by applicable Law, Pivotal Company shall not, and shall not permit any of its SubsidiariesCompany Subsidiary to, without VMware’s prior written consent (which consent, in the cases do any of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), tofollowing:
(a) (i) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock or stock, other equity interests, except for than dividends and distributions by a wholly owned Company Subsidiary of Pivotal to Pivotal Company or any other wholly owned Subsidiary of Pivotalanother Company Subsidiary, (ii) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, other than (A) in the withholding case of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement a direct or as permitted by this Agreementindirect wholly owned Company Subsidiary, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii) split, combine, recapitalize, subdivide or reclassify or otherwise amend the terms of any of its capital stock or other equity 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 (iii) purchase, redeem or otherwise acquire any shares of capital stock of the Company or any Company Subsidiary or any other securities thereof or any rights, warrants or options to acquire any such shares or other equity interestssecurities;
(b) issue, deliver, sell, grant, pledge sell or otherwise encumber or subject to any Lien grant (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Lawsi) any shares of its capital stock stock, including, without limitation, any shares of the Preferred Stock, (ii) any debentures, bonds, notes or other equity interests indebtedness having the right to vote (“Voting Company Debt”) or any other voting securities, (iii) any securities convertible into, into or exchangeable for or exercisable for any such shares or other equity interestsfor, or any rightsoptions, warrants or options rights to acquire, any such shares shares, Voting Company Debt, voting securities or other equity interestsconvertible or exchangeable securities, or (iv) any stock appreciation rights“phantom” stock, “phantom” stock rights, stock appreciation rights or stock-based performance units, rights to receive shares of capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof (other than the issuance of Class A Shares Common Stock upon the exercise of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPP, in each case, that are Company Stock Options outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with their terms as in effect on such date)present terms;
(c) amend repurchase any equity securities of the Company (including pursuant to the Stock Repurchase Program dated July 26, 2007 (the “Stock Repurchase Program”)) or otherwise change, or authorize or propose to amend or otherwise change, its certificate of incorporation or bylaws (or similar organizational documents)otherwise;
(d) directly amend or indirectly propose any change to its or any Company Subsidiary’s articles of incorporation, bylaws or other comparable governance or organizational documents;
(e) amend or propose any change to the voting powers, full or limited, or no voting powers, and/or the designations, preferences and relative, participating, optional or other special rights, and/or the qualifications, limitations and restrictions thereof as provided by Colorado Law, of the Preferred Stock;
(f) merge or consolidate with any other person or acquire assets or agree equity securities of any other person;
(g) sell, lease, license, subject to acquire a Lien, encumber or otherwise surrender, relinquish or dispose of any assets, property or rights (including capital stock of a Company Subsidiary) except (i) by merging pursuant to existing Contracts or consolidating withcommitments, purchasing a substantial equity interest in or a substantial portion of the assets of, making an investment in or loan or capital contribution to or in any other manner, any corporation, partnership, association or other business organization or division thereof or (ii) any assets that are otherwise material to Pivotal and its Subsidiariesin the ordinary course, except, in each case, for consistent with past practice;
(1h) capital expenditures which shall be subject to the limitations of clause (i) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes other than in the ordinary course of business consistent with Pivotal’s investment management policy, and except in the case of clause (ii), acquisitions of inventory, products or services in the ordinary course of business; Table of Contents
(e) directly or indirectly sell, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien or otherwise dispose in whole or in part of any of its material properties, assets or rights (including any material Pivotal Intellectual Property Registrations) or any interest therein, except, in each casepast practice, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Out;
(f) adopt or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (ii) make any loans, advances or capital contributions to, or investments in, any other Personperson or (ii) create, other than Pivotal incur, guarantee or assume any direct indebtedness for borrowed money or indirect wholly owned Subsidiary of Pivotalissue debt securities; provided that the loans or advances to employees permitted under this Section 5.01(h) shall not exceed $10,000 in any individual case;
(i) incur or commit to incur make any capital expenditure or authorization or commitment with respect thereto that in the aggregate are in excess of $1,000,000;
(j) except as required by any judgment by a court of competent jurisdiction, (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge or satisfaction in the ordinary course of business, (B) as required by their terms as in effect on the date of this Agreement of claims, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements in the ordinary course of business, (ii) cancel any material Indebtedness owed to Pivotal or any of its Subsidiaries, or (iii) waive, release, grant or transfer any right of material value;
(k) (i) materially modify, materially amend, terminate, cancel, waive any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (ii) enter into any Contract that if in effect on the date hereof would be a Material Contract, other than customer contracts entered into in the ordinary course of business;
(lj) commence grant any Legal Proceeding (increase in the compensation or benefits of directors, officers, employees, consultants, representatives or agents of the Company or any Company Subsidiary other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal required by any plan or any of its Subsidiaries), arrangement in effect on the date hereof and payments or compromise, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements increases for non-executive officer employees in the ordinary course of business that involve only the payment of money damages not in excess of $500,000 individually or $2,000,000 in the aggregate, in any case without the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal or any of its Subsidiariesconsistent with past practice;
(mk) change its financial hire or Tax accounting methods, principles terminate the employment or practices, except insofar as may have been required by a change in GAAP or applicable Law;
(n) settle or compromise any material liability for Taxes or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change the entity classification contractual relationship of any Subsidiary for U.S. federal tax purposes; file officer or employee of the Company or any Tax Return Company Subsidiary, as the case may be, other than hirings or terminations in the ordinary course of business and on a basis consistent with past practice that or that, individually and in the aggregate, would materially not result in (i) a material increase in the number of persons providing services to the Company or any Company Subsidiary in all such capacities or (ii) in the case of hirings, a material increase in the aggregate payroll and adversely affect its Tax liability; consent other benefits costs to any extension the Company or waiver such Company Subsidiary (such increase to be determined, in the case of a hiring to replace an employee or other service provider in a pre-existing position based solely on the costs in excess of the limitation period applicable costs associated with the replaced service provider), and (iii) in the case of terminations, material liability to the Company or any claim Company Subsidiary in excess of the costs savings, if any, directly derived from such terminations;
(l) settle or assessment in respect of compromise any action, suit, claim, litigation, proceeding, arbitration, investigation, audit or controversy involving claims, liabilities or obligations material to the Company and the Company Subsidiaries taken as a material amount of Taxes; grant any power of attorney with respect to material Taxes; whole, or enter into any Tax Sharing Agreement consent, decree, injunction or similar restraint or form of equitable relief in settlement of any material proceeding;
(m) adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of the Company or any closing agreement Company Subsidiary; or
(n) authorize any of, or other similar agreementcommit or agree to take any of, the foregoing actions; Except as otherwise (i) expressly permitted or change contemplated by this Agreement, (ii) required by Law, or (iii) with the prior written consent of the Company, acting through the Special Committee (such consent not to be unreasonably withheld, conditioned or delayed), (A) neither Executive will cause the Company or any method Company Subsidiary to take or refrain from taking an action that would constitute a breach of accounting for Tax purposes;this Section 5.01 absent the foregoing provision, and (B) neither Parent, Purchaser or either Executive nor any of their respective affiliates, will enter into, modify or terminate any Contract with the Company or any Company Subsidiary.
Appears in 3 contracts
Samples: Merger Agreement (VCG Holding Corp), Merger Agreement (Lowrie Management LLLP), Merger Agreement (VCG Holding Corp)
Conduct of Business. During the period from the date execution of this Agreement to the Effective Acceptance Time, except as consented to in writing in advance by VMware Parent which consent shall not be unreasonably withheld, delayed or conditioned, or as otherwise expressly specifically required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) by this Agreement, Pivotal the Company shall, and shall cause each of its Subsidiaries to, to (x) carry on its business in the ordinary course, including its development Ordinary Course of Business and sales efforts as currently contemplated, in compliance with all applicable Laws and (y) use commercially reasonable best efforts to (i) preserve intact its business organization, preserve its assets, Permits, rights and propertiesproperties in good repair and condition, (ii) keep available the services of its current officers, employees and consultants and (iii) preserve its goodwill and its relationships with customers, suppliers, licensors, licensees, distributors distributors, Collaboration Partners, and others having material business dealings with it. In addition to and without limiting the generality of the foregoing, during the period from the date execution of this Agreement to the Effective Acceptance Time, except (x1) as set forth in section 5.1 Section 4.2 of the Pivotal Company Disclosure Letter, (y2) as consented to in writing in advance by Parent which consent shall not be unreasonably withheld, delayed or conditioned (unless such consent would violate applicable Law, including Antitrust Law, in which case consent shall not be required) or (3) as otherwise specifically required by this Agreement or (z) as specifically required by applicable LawAgreement, Pivotal the Company shall not, and shall not permit any of its Subsidiaries, without VMware’s prior written consent (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), Subsidiaries to:
(a) (i) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock Shares or other equity interests, except for dividends by a wholly owned Subsidiary of Pivotal the Company to Pivotal or any other wholly owned Subsidiary of Pivotalits parent, (ii) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal the Company (except in accordance with the terms of a Company Restricted Share Purchase Agreement) or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, interests or (iii) split, combine, reclassify or otherwise amend the terms of any of its capital stock Shares or other equity 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 Shares or other equity interests;
(b) except as set forth on Section 4.2(b) of the Company Disclosure Letter, issue, deliver, sell, grant, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) any shares of its capital stock Shares or other equity interests or any securities convertible into, exchangeable for or exercisable for any such shares or other equity interests, or any rights, warrants or options to acquire, any such shares or other equity interests, or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive shares Shares of capital stock of VMware the Company on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof (other than the issuance of Class A Shares upon the exercise of Pivotal Optionsexercise, the vesting or settlement of Pivotal RSUs Company Stock Options or the exercise of purchase rights under the Pivotal ESPP, in each case, that are Company RSU Awards outstanding on the date of this Agreement and Made Available to VMware and otherwise Measurement Date in accordance with their terms as in effect on such date, and (iii) the issuance of Shares upon the exercise of the Company Warrants or the conversion rights under the Existing Credit Agreements);
(c) amend or otherwise change, or authorize or propose to amend or otherwise change, its certificate of incorporation or bylaws (change the Company Articles or similar organizational documentsdocuments of the Company or any of its Subsidiaries (other than proposed by the Company Board to the Annual Company Shareholder Meeting prior to the date hereof or validly proposed by one or more shareholders of the Company and approved by the general meeting of shareholders of the Company against the recommendation of the Company Board);
(d) directly or indirectly acquire or agree to acquire (i) by merging or consolidating with, purchasing a substantial equity interest in or a substantial portion of the assets of, making an investment in or loan or capital contribution to or in any other manner, any corporation, partnership, association or other business organization or division thereof or (ii) any assets that are otherwise material to Pivotal and its Subsidiaries, the Company except, in each case, for (1) capital expenditures which shall be subject to the limitations of clause (i) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes in the ordinary course of business consistent with Pivotal’s investment management policy, and except in the case of clause any of the foregoing (iiA) in the Ordinary Course of Business (including entering into non-exclusive license agreements in the Ordinary Course of Business), acquisitions (B) pursuant to dispositions of inventoryobsolete, products surplus or services worn out assets that are no longer useful in the ordinary course conduct of business; Table the business of Contentsthe Company, or (C) as provided for in the Company’s capital expenditure budget set forth in Section 4.2(h) of the Company Disclosure Letter;
(e) directly or indirectly sell, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien or otherwise dispose in whole or in part of any of its material properties, assets or rights (including any material Pivotal Intellectual Property Registrations) or any interest interests therein, except, except sales of inventory in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, the Ordinary Course of Business or encumbrances required to be effected prior pursuant to the Effective Time pursuant to existing Contracts that are not material to Pivotal and its Subsidiaries, taken as a whole and (iicapital expenditure budget set forth in Section 4.2(h) Ordinary Course Licenses Outof the Company Disclosure Letter;
(f) adopt or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive repay or prepay, in each case, any Indebtedness, or amend, modify or refinance any Indebtedness or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, other than Pivotal the Company or any direct or indirect wholly owned Subsidiary of Pivotalthe Company except for (A) short-term borrowings, of not more than $500,000 in the aggregate, incurred in the Ordinary Course of Business or (B) advances to employees and consultants for travel and other business-related expenses of not more than $50,000 in the aggregate;
(ih) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto except that the Company may make capital expenditures (i) provided for in the aggregate capital expenditure budget set forth in Section 4.2(h) of the Company Disclosure Letter, and (ii) that are consistent with past practice and solely for purposes of maintaining, repairing or replacing equipment used in excess of the manufacturing process, that do not exceed $1,000,000250,000 individually and $500,000 in the aggregate;
(ji) except as required by any judgment by a court of competent jurisdiction, (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge or satisfaction in the ordinary course Ordinary Course of business, (B) Business or as required by their terms as in effect on the date of this Agreement of claims, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of Pivotal the Company included in the Pivotal Company SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements in the ordinary course Ordinary Course of businessBusiness, (ii) cancel or otherwise forgive any material Indebtedness owed to Pivotal the Company or any of its Subsidiaries, Subsidiaries (including loans made to Service Providers) or (iii) waive, release, grant or transfer any right of material value;
(k) (i) materially modify, materially amend, terminate, waive, release or assign any rights under, cancel, waive extend, determine not to renew, or exercise any material right option under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or Contract, (ii) enter into any Contract that if in effect on the date hereof would be a Material Contract, or (iii) amend or modify any Contract in existence on the date hereof that, after giving effect to such amendment or modification, would be a Material Contract;
(k) convene any ordinary general meeting or extraordinary general meeting (or any postponement thereof) of the Company’s shareholders other than customer contracts entered into in the ordinary course Annual Company Shareholder Meeting and the Company Shareholder Meeting or to the extent required by an order of businessa court of competent jurisdiction or validly requested by one or several shareholders of the Company;
(l) commence any Legal Proceeding Action (other than a Legal Proceeding an Action as a result of a Legal Proceeding an Action commenced against Pivotal the Company or any of its Subsidiaries), or compromise, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements Action that results solely in the ordinary course of business that involve a monetary obligation involving only the payment of money damages monies by the Company of not in excess of more than $500,000 individually or $2,000,000 1,000,000 in the aggregate, in any case without the imposition except with respect to a breach of any equitable relief on, or the admission of wrongdoing by, Pivotal this Agreement or any of its Subsidiariesother agreements contemplated hereby;
(m) change its financial or Tax accounting methods, principles or practices, except insofar as may have been required by a change in GAAP IFRS or applicable Law, or revalue any of its material assets;
(n) change its fiscal year;
(o) settle or compromise any material liability for Taxes or surrender any material claim other than consistent with past practice applying for a refund the waiver of Taxes; file any amended Tax Return or claim for Tax refund; issuance stamp duty according to article 12 of the Swiss Stamp Duties Act make, revoke or modify any material Tax election, or change the entity classification of ; surrender any Subsidiary for U.S. federal tax purposes; file any right to claim a material Tax Return other than in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liabilityrefund; consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of a material amount of Taxes; grant fail to pay any power material amount of attorney with respect Taxes when due or fail to file any income or other material TaxesTax Return when due (taking into account any valid extensions); enter into any Tax Sharing Agreement ruling or Tax allocation agreement, Tax sharing agreement, Tax indemnity agreement, Tax holiday or any closing agreement or other similar agreement which will remain in force after the Acceptance Time (in each case, other than a contract (such as a loan agreement or lease agreement) entered into in the Ordinary Course of Business that is not primarily related to Taxes); or change any material method of accounting for Tax purposes;
(p) except as set forth on Section 4.2(p) of the Company Disclosure Letter, and other than as required by any Company Plan as in effect on the date of this Agreement or by applicable Law, (i) increase the compensation or benefits of any Service Provider, other than in the Ordinary Course of Business consistent with past practice with respect to any Service Provider whose total annual cash compensation opportunity does not exceed $250,000, provided that any such increases do not exceed, (x) in the aggregate, 5% of the total annual target cash compensation for all Services Providers and (y) with respect to any individual Service Provider, 10% of such Service Provider’s total annual target cash compensation, (ii) grant or pay to any Service Provider any severance, termination, retention, change in control, transaction or similar payments or benefits, (iii) establish, adopt, enter into, amend in any material respect or terminate any Company Plan or any collective bargaining agreement, other than offer letters, employment agreements or consulting agreements that do not include severance protections or change in control payments with respect to any Service Provider whose total annual cash compensation opportunity does not exceed $250,000, (iv) take any action to amend or waive any performance or vesting criteria or accelerate the vesting, exercisability, funding or payment of any compensation or benefit under any Company Plan or other Contract other than as set out in this Agreement or (v) hire or terminate (other than for cause or due to death or disability) any Service Provider whose annual cash compensation opportunity exceeds $250,000, except that the Company or its relevant Subsidiary may enter into any replacement arrangements for a Service Provider;
(q) fail to keep in force insurance policies or replacement or revised provisions regarding insurance coverage with respect to the assets, operations and activities of the Company and its Subsidiaries as currently in effect;
(r) terminate, allow to lapse or expire, suspend, modify or otherwise take any step to limit the effectiveness or validity of, or fail to maintain as valid and in full force and effect, any Permit (including all Company Permits);
(s) enter into any new lease or license or amend the terms of any existing lease or license of real property except for in the Ordinary Course of Business;
(i) sell, assign, transfer all or any portion of, mortgage, encumber or create or incur any Lien on the Owned Company Intellectual Property, (ii) grant any licenses of Intellectual Property, (iii) abandon, permit to lapse or cease to prosecute or maintain any of the Company Registered IP or any other Company Intellectual Property, or (iv) disclose to any third party, other than under a confidentiality agreement or other legally binding confidentiality undertaking, any material trade secret of the Company or any of its Subsidiaries that is included in the Company Intellectual Property in a way that results in loss of material trade secret protection thereon, except for any such disclosures made as a result of publication of a patent application filed by the Company or any of its Subsidiaries or in connection with any required regulatory filing;
(u) adopt or implement any shareholder rights plan or similar arrangement;
(v) take any action (or omit to take any action) if such action (or omission) could reasonably be expected to result in any of the Offer Conditions not being satisfied;
(w) other than in the Ordinary Course of Business (which, for the avoidance of doubt, shall not include any activities related to Apraglutide) (i) commence, alone or with any third party, any research program or pre-clinical or clinical study that has not been disclosed to Parent prior to the date of this Agreement, (ii) unless mandated by any Governmental Entity, discontinue, terminate or suspend any ongoing material research program or clinical study or (iii) make any change to, discontinue, terminate or suspend any ongoing material clinical study, in each case, relating to the Products; or
(x) authorize any of, or commit, resolve or agree to take any of, the foregoing actions. Notwithstanding the foregoing, nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the operations of the Company prior to the Acceptance Time. Prior to the Acceptance Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its business, assets and operations.
Appears in 3 contracts
Samples: Transaction Agreement (VectivBio Holding AG), Transaction Agreement (Ironwood Pharmaceuticals Inc), Transaction Agreement (Ironwood Pharmaceuticals Inc)
Conduct of Business. During the period from the date of this Agreement (a) The Company Parties will not (i) permit or do or cause to the Effective Timebe done anything which Company has represented in Article II not to have been done, except as otherwise permitted in this Agreement or consented to in writing by KVI in advance by VMware or as otherwise expressly required or prohibited (including by the restrictions set forth and in subclauses (a) through (r) below) by this Agreement, Pivotal shall, and shall cause each of its Subsidiaries to, carry on its business in the ordinary course, including its development and sales efforts as currently contemplated, and use commercially reasonable efforts to (i) preserve intact its business organization, assets, rights and properties, writing; (ii) keep available the services make or permit any amendment to Company's Articles of its current officers, employees and consultants and Incorporation or bylaws; (iii) preserve its goodwill and its relationships with customerscause or permit to be declared or paid any dividend, suppliersstock split, licensors, licensees, distributors and others having material business dealings with it. In addition to and without limiting the generality of the foregoing, during the period from the date of this Agreement to the Effective Time, except combination (x) as set forth in section 5.1 of the Pivotal Disclosure Letter, (y) as specifically required by this Agreement or (z) as specifically required by applicable Law, Pivotal shall not, and shall not permit any of its Subsidiaries, without VMware’s prior written consent (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (jreverse split) or (k) below shall not be unreasonably withheld, conditioned other recapitalization or delayed, and in all other cases shall be in VMware’s sole discretion), to:
(a) (i) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) distribution in respect ofof Company's common stock, any of its capital stock nor cause or other equity interests, except for dividends by a wholly owned Subsidiary of Pivotal to Pivotal or any other wholly owned Subsidiary of Pivotal, (ii) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii) split, combine, reclassify or otherwise amend the terms of any of its capital stock or other equity interests or issue or authorize permit the issuance of any other securities in respect of, in lieu of or in substitution for additional shares of its capital stock Company's common stock; (iv) permit the increase of compensation of any type to any director or officer or other employee of Company; (v) to the best ability of the Company Parties, permit or do any act or omission to act the effect of which would be to breach or violate any contract or commitment to which Company is a party; (vi) to the best ability of the Company Parties, permit or cause the waiver of the provisions of any statute of limitations applicable to the levy or assessment of any federal, state, municipal or foreign taxes payable by Company; or (vii) organize any subsidiary of Company, or acquire or permit the acquisition of any equity interests;interest in any other business or entity, with the exception of those proposed transactions presently in negotiations and disclosed herein in Exhibit "C" (Company Business Plan).
(b) issueTo the best of their ability, deliverthe Company Parties will: (I) maintain Company's books, sellaccounts, grantand records that are now being maintained, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) any shares of its capital stock or other equity interests or any securities convertible into, exchangeable for or exercisable for any such shares or other equity interests, or any rights, warrants or options to acquire, any such shares or other equity interests, or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive shares of capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof (other than the issuance of Class A Shares upon the exercise of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPP, in each case, that are outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with their terms as in effect on such date);
(c) amend or otherwise change, or authorize or propose to amend or otherwise change, its certificate of incorporation or bylaws (or similar organizational documents);
(d) directly or indirectly acquire or agree to acquire (i) by merging or consolidating with, purchasing a substantial equity interest in or a substantial portion of the assets of, making an investment in or loan or capital contribution to or in any other manner, any corporation, partnership, association or other business organization or division thereof or consistent basis; (ii) any assets that are otherwise material to Pivotal and its Subsidiaries, except, maintain Company's properties in each case, for (1) capital expenditures which shall be subject to the limitations of clause (i) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes in the ordinary course of business consistent with Pivotal’s investment management policy, and except in the case of clause (ii), acquisitions of inventory, products or services in the ordinary course of businessgood repair; Table of Contents
(e) directly or indirectly sell, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien or otherwise dispose in whole or in part of any of its material properties, assets or rights (including any material Pivotal Intellectual Property Registrations) or any interest therein, except, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Out;
(f) adopt or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, other than Pivotal or any direct or indirect wholly owned Subsidiary of Pivotal;
(i) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto that in the aggregate are in excess of $1,000,000;
(j) except as required by any judgment by a court of competent jurisdiction, (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge or satisfaction in the ordinary course of business, (B) as required by their terms as in effect on the date of this Agreement of claims, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements in the ordinary course of business, (ii) cancel any material Indebtedness owed to Pivotal or any of its Subsidiaries, or (iii) waivecomply with and not violate any law, releaserule, grant regulation, or transfer any right of material value;
(k) (i) materially modify, materially amend, terminate, cancel, waive any material right under ordinance whatever applicable to Company or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (ii) enter into any Contract that if in effect on the date hereof would be a Material Contract, other than customer contracts entered into in the ordinary course of business;
(l) commence any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal its business or any license or permit issued by the State of its Subsidiaries)Florida, or compromise, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements in the ordinary course including timely filing of business that involve only the corporate reports and current payment of money damages not in excess of $500,000 individually or $2,000,000 in the aggregate, in any case without the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal or any of its Subsidiaries;
(m) change its financial or Tax accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law;
(n) settle or compromise any material liability for Taxes or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business all taxes now and on a basis consistent with past practice that would materially hereafter due and adversely affect its Tax liability; consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of a material amount of Taxes; grant any power of attorney with respect to material Taxes; enter into any Tax Sharing Agreement or any closing agreement or other similar agreement; or change any method of accounting for Tax purposes;owing.
Appears in 2 contracts
Samples: Share Exchange & Acquisition Agreement (Kleer Vu Industries Inc/De/), Share Exchange & Acquisition Agreement (Calypso Wireless Inc)
Conduct of Business. During (a) Except as expressly permitted by this Agreement or as required by applicable Law, during the period from the date of this Agreement to until the Effective Time, except as consented to in writing in advance by VMware or as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) by this Agreement, Pivotal Company shall, and shall cause each of its Subsidiaries to, carry on (w) conduct its business in the ordinary coursecourse consistent with past practice in all material respects, including its development (x) comply in all material respects with all applicable Laws and sales efforts as currently contemplatedthe requirements of all Material Contracts, and (y) use commercially reasonable efforts to (i) maintain and preserve intact its business organization, assets, rights organization and properties, (ii) keep available the goodwill of those having business relationships with it and retain the services of its current officerspresent officers and key employees, employees and consultants and (iii) preserve in each case, to the end that its goodwill and its relationships with customersongoing business shall not be materially impaired at the Effective Time and (z) keep in full force and effect all material Policies, suppliers, licensors, licensees, distributors and others having material business dealings with itother than changes to such Policies made in the ordinary course of business. In addition to and without Without limiting the generality of the foregoing, except as expressly permitted by this Agreement, as required by applicable Law or as expressly consented to in writing by Parent, during the period from the date of this Agreement to the Effective Time, except (x) as set forth in section 5.1 of the Pivotal Disclosure Letter, (y) as specifically required by this Agreement or (z) as specifically required by applicable Law, Pivotal Company shall not, and shall not permit any of its Subsidiaries, without VMware’s prior written consent (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), Subsidiaries to:
(a) (i) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock or other equity interests, except for dividends by a wholly owned Subsidiary of Pivotal to Pivotal or any other wholly owned Subsidiary of Pivotal, (ii) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii) split, combine, reclassify or otherwise amend the terms of any of its capital stock or other equity 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 other equity interests;
(b) issue, deliver, sell, grant, dispose of, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) any shares of its capital stock stock, voting securities or other equity interests interests, or any securities or rights convertible into, exchangeable for or exercisable for, or evidencing the right to subscribe for any such shares of its capital stock, voting securities or other equity interests, or any rights, warrants warrants, options, calls, commitments or options any other agreements of any character to acquirepurchase or acquire any shares of its capital stock, voting securities or equity interests or any securities or rights convertible into, exchangeable or exercisable for, or evidencing the right to subscribe for, any such shares of its capital stock, voting securities or other equity interests, or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive provided that the Company may issue shares of capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof (other than the issuance of Class A Shares Company Common Stock upon the exercise of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights options granted under the Pivotal ESPPCompany Stock Plan and shares of Company Common Stock under the terms of the Company Stock Unit Plan, in each case, case that are outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with the terms thereof; (B) redeem, purchase or otherwise acquire any of its outstanding shares of capital stock, voting securities or equity interests, or any rights, warrants, options, calls, commitments or any other agreements of any character to acquire any shares of its capital stock, voting securities or equity interests except pursuant to the Company Stock Unit Plan; (C) declare, set aside for payment or pay any dividend on, or make any other distribution in respect of, any shares of its capital stock or otherwise make any payments to its shareholders in their terms capacity as in effect on such date(other than dividends by a direct or indirect wholly owned Subsidiary of the Company to its parent); (D) split, combine, subdivide or reclassify any shares of its capital stock; or (E) amend (including by reducing an exercise price or extending a term) or waive any of its rights under, or accelerate the vesting under, any provision of the Company Stock Plan or the Company Stock Unit Plan or any agreement evidencing any outstanding stock option or other right to acquire capital stock of the Company or any restricted stock purchase agreement or any similar or related Contract;
(cii) amend incur or otherwise change, assume any indebtedness for borrowed money or authorize or propose to amend or otherwise change, its certificate of incorporation or bylaws guarantee any indebtedness (or enter into a “keep well” or similar organizational documents);
(dagreement) directly or indirectly acquire issue or agree sell any debt securities or options, warrants, calls or other rights to acquire (i) by merging or consolidating with, purchasing a substantial equity interest in or a substantial portion any debt securities of the assets of, making an investment in Company or loan or capital contribution to or in any other manner, any corporation, partnership, association or other business organization or division thereof or (ii) any assets that are otherwise material to Pivotal and of its Subsidiaries, except, other than (A) borrowings by the Company in each case, for the ordinary course of business under the Company’s existing revolving credit agreement listed on Section 3.13(a) of the Company Disclosure Schedule (1as to which the Company shall keep Parent regularly informed) capital expenditures which shall be subject and guarantees of such borrowings issued by the Company’s Subsidiaries to the limitations extent required under the terms of clause (i) below such credit facility, and (2B) purchases borrowings from the Company by a direct or indirect wholly owned Subsidiary of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes the Company in the ordinary course of business consistent with Pivotal’s investment management policypast practice;
(iii) sell, transfer, lease, mortgage, encumber or otherwise dispose of or subject to any Lien (including pursuant to a sale-leaseback transaction or an asset securitization transaction) any of its properties or assets (including securities of Subsidiaries) with a fair market value in excess of $250,000 individually or $500,000 in the aggregate to any Person, except (A) sales of inventory in the ordinary course of business consistent with past practice, (B) pursuant to Contracts in force at the date of this Agreement and listed on Section 5.2(a)(iii) of the Company Disclosure Schedule, correct and complete copies of which have been made available to Parent or (C) dispositions of obsolete or worthless assets;
(iv) make any capital expenditure or expenditures which (A) involves the purchase of real property or (B) is in excess of $1,000,000 in the aggregate in any month;
(v) directly or indirectly acquire (A) by merging or consolidating with, or by purchasing all of or a substantial equity interest in, or by any other manner, any Person or division, business or equity interest of any Person or (B) except in the case ordinary course of clause (iibusiness consistent with past practice or pursuant to a capital expenditure permitted pursuant to Subsection 5.2(a)(iv), acquisitions any assets that, individually, have a purchase price in excess of inventory$100,000 or, products in the aggregate, have a purchase price in excess of $500,000;
(vi) make any investment (by contribution to capital, property transfers, purchase of securities or services otherwise) in, or loan or advance (other than travel and similar advances to its employees in the ordinary course of business consistent with past practice) to, any Person other than a direct or indirect wholly owned Subsidiary of the Company in the ordinary course of business; Table of Contents;
(eA) directly other than in the ordinary course of business consistent with past practice, enter into, terminate or indirectly sell, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to amend any Lien or otherwise dispose in whole or in part of any of its material properties, assets or rights (including any material Pivotal Intellectual Property Registrations) Material Contract or any interest therein, except, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior other Contract that is material to the Effective Time pursuant to existing Contracts that are not material to Pivotal Company and its Subsidiaries, taken as a whole whole, (B) enter into or extend the term or scope of any Contract that purports to restrict the Company or any existing or future Subsidiary or Affiliate of the Company, from engaging in any line of business or in any geographic area, in each case that is material to the business of the Company and its Subsidiaries taken as a whole, (iiC) Ordinary Course Licenses Outamend or modify the Engagement Letter, (D) enter into any Contract that would be breached by, or require the consent of any third party in order to continue in full force following, consummation of the Merger or (E) release any Person from, or modify or waive any provision of, any confidentiality, standstill or similar agreement;
(fviii) (A) increase in any manner, other than increases in benefits that do not violate clause (B) of this subsection, the compensation of any of its directors, officers or employees or enter into, establish, amend or terminate any employment, consulting, retention, change in control, collective bargaining, bonus or other incentive compensation, profit sharing, health or other welfare, stock option or other equity (or equity-based), pension, retirement, vacation, severance, deferred compensation or other compensation or benefit plan, policy, agreement, trust, fund or arrangement with, for or in respect of, any director, officer, other employee, consultant or Affiliate or (B) amend or otherwise modify benefits under any Company Plan, except as set forth in Section 5.2(a)(viii) of the Company Disclosure Schedule grant any awards under any Company Plan (including the grant of stock options, stock appreciation rights, stock-based or stock-related awards, performance units, restricted stock units or restricted stock, or the removal of existing restrictions in any Contract or Company Plan or awards made thereunder), accelerate the payment or vesting of benefits or amounts payable or to become payable under any Company Plan as in effect on the date hereof, or terminate or establish any Company Plan, other than, in the case of clause (A) or (B), (x) as required pursuant to applicable Law or the terms of the agreements set forth on Section 5.2(a)(viii) of the Company Disclosure Schedule (correct and complete copies of which have been made available to Parent) and (y) increases in salaries, wages and benefits of employees (other than officers) made in the ordinary course of business and in amounts and in a manner consistent with past practice;
(ix) make or change any material election concerning Taxes or Tax Returns, file any material amended Tax Return, enter into any material closing agreement with respect to Taxes, settle any material Tax claim or assessment or surrender any right to claim a refund of Taxes or obtain any Tax ruling;
(x) make any changes in financial or tax accounting methods, principles or practices (or change an annual accounting period), except insofar as may be required by a change in GAAP or applicable Law;
(xi) amend the Company Charter Documents or the Subsidiary Documents; redeem the Rights, amend or terminate the Company Rights Agreement or otherwise take any action to render the Company Rights Plan inapplicable to any transaction (other than the Merger) or any Person (other than Parent and Merger Sub);
(xii) adopt or enter into a plan or agreement of complete or partial liquidation, dissolution, restructuring, recapitalization recapitalization, merger, consolidation or other reorganization;
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, other than Pivotal or any direct or indirect wholly owned Subsidiary of Pivotal;
(i) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto that in the aggregate are in excess of $1,000,000;
(j) except as required by any judgment by a court of competent jurisdiction, (ixiii) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge discharge, settlement or satisfaction in the ordinary course of business, (B) as required by accordance with their terms as in effect on the date of this Agreement of claimsliabilities, liabilities claims or obligations reflected or reserved against in the most recent audited consolidated financial statements (or the notes thereto) of Pivotal the Company included in the Pivotal Filed Company SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements in the ordinary course of business, (ii) cancel any material Indebtedness owed to Pivotal or any of its Subsidiaries, or (iii) waive, release, grant or transfer any right of material valuebusiness consistent with past practice;
(kxiv) issue any broadly distributed communication of a general nature to employees (i) materially modify, materially amend, terminate, cancel, waive any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of businessincluding general communications relating to benefits and compensation) or (ii) enter into any Contract that if in effect on the date hereof would be a Material Contractcustomers without prior approval of Parent, other than customer contracts entered into in the ordinary course of business;
(l) commence any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal or any of its Subsidiaries), or compromise, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements except for communications in the ordinary course of business that involve only do not relate to the payment of money damages not in excess of $500,000 individually or $2,000,000 in the aggregate, in any case without the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal or any of its SubsidiariesMerger;
(m) change its financial or Tax accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law;
(nxv) settle or compromise any litigation, proceeding or investigation material liability for Taxes or surrender any material claim for to the Company and its Subsidiaries taken as a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change whole (this covenant being in addition to the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return Company’s agreement set forth in Section 5.11 hereof);
(xvi) other than in the ordinary course of business and on a basis business, consistent with past practice that would materially and adversely affect its Tax liability; practice, agree or consent to any extension agreement or waiver modification of any existing agreement with any Governmental Authority, except as required by applicable Laws; or
(xvii) agree, in writing or otherwise, to take any of the limitation foregoing actions, or take any action or agree, in writing or otherwise, to take any action which would (A) cause any of the representations or warranties of the Company set forth in this Agreement (1) that are qualified as to materiality or Material Adverse Effect to be untrue or (2) that are not so qualified to be untrue in any material respect or (B) in any material respect impede or delay the ability of the parties to satisfy any of the conditions to the Merger set forth in this Agreement. Parent agrees that, during the period applicable to any claim from the date of this Agreement until the Effective Time, except as expressly contemplated or assessment in respect of a material amount of Taxes; grant any power of attorney with respect to material Taxes; enter into any Tax Sharing permitted by this Agreement or as required by applicable Law, and except as may be consented to in writing by the Company, Parent shall not, and shall not permit any closing agreement of its Subsidiaries to, take any action or other similar agreement; agree, in writing or change otherwise, to take any method action which would (A) cause any of accounting for Tax purposes;the representations or warranties of Parent, Merger Sub or Merger Sub 2 set forth in this Agreement (1) that are qualified as to materiality or Material Adverse Effect to be untrue or (2) that are not so qualified to be untrue in any material respect or (B) in any material respect impede or delay the ability of the parties to satisfy any of the conditions to the Merger set forth in this Agreement.
Appears in 2 contracts
Samples: Merger Agreement (Allegheny Technologies Inc), Merger Agreement (Ladish Co Inc)
Conduct of Business. During Until the period from Closing Date, the date of this Agreement to the Effective TimeCompany shall, except as consented to unless Buyer shall otherwise consent in writing in advance by VMware or as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) by this Agreement, Pivotal shall, and shall cause each of its Subsidiaries to, carry on its business in the ordinary course, including its development and sales efforts as currently contemplated, and use commercially reasonable efforts to (i) preserve intact its business organization, assets, rights and properties, (ii) keep available the services of its current officers, employees and consultants and (iii) preserve its goodwill and its relationships with customers, suppliers, licensors, licensees, distributors and others having material business dealings with it. In addition to and without limiting the generality of the foregoing, during the period from the date of this Agreement to the Effective Time, except (x) as set forth in section 5.1 of the Pivotal Disclosure Letter, (y) as specifically required by this Agreement or (z) as specifically required by applicable Law, Pivotal shall not, and shall not permit any of its Subsidiaries, without VMware’s prior written consent (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below consent shall not be unreasonably withheld, conditioned withheld or delayed, and in all other cases shall be in VMware’s sole discretion), to) or except as otherwise specifically contemplated by this Agreement:
(a) operate only in the usual, regular and ordinary manner consistent with past practice, and use its commercially reasonable efforts to preserve and maintain its present business operations, organization and goodwill and relationships with third parties;
(ib) declaremaintain books, set aside or pay any dividends onaccounts and records in the usual, or make any other distributions (whether in cashregular and ordinary manner, stock or property) in respect ofon a basis consistent with prior years, and not change any of its capital stock or other equity interestsaccounting principles, except for dividends as required by a wholly owned Subsidiary of Pivotal GAAP;
(c) comply in all material respects with all applicable Laws and Orders to Pivotal which they are subject;
(d) not enter into any merger or consolidation with any other wholly owned Subsidiary of Pivotal, (ii) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal or its Subsidiaries or Person and not engage in any options, warrantsnew business, or rights to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted except pursuant to the Pivotal Stock Plans and outstanding Contracts or commitments existing on the date of this Agreement and indicated in Schedule 6.1(d), make a loan, advance or as permitted by this Agreementcapital contribution to any Person;
(e) not sell, in accordance with their terms lease, license or otherwise dispose of or pledge or otherwise encumber any material assets or Property of the Company except (i) pursuant to Contracts or commitments existing on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii) split, combine, reclassify or otherwise amend the terms of any of its capital stock or other equity 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 other equity interests;
(b) issue, deliver, sell, grant, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) any shares of its capital stock or other equity interests or any securities convertible into, exchangeable for or exercisable for any such shares or other equity interests, or any rights, warrants or options to acquire, any such shares or other equity interests, or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive shares of capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof (other than the issuance of Class A Shares upon the exercise of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPP, in each case, that are outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with their terms as in effect on such date);
(c) amend or otherwise change, or authorize or propose to amend or otherwise change, its certificate of incorporation or bylaws (or similar organizational documents);
(d) directly or indirectly acquire or agree to acquire (i) by merging or consolidating with, purchasing a substantial equity interest in or a substantial portion of the assets of, making an investment in or loan or capital contribution to or in any other manner, any corporation, partnership, association or other business organization or division thereof or (ii) any assets that are otherwise material to Pivotal and its Subsidiaries, except, in each case, for (1) capital expenditures which shall be subject to the limitations of clause (i) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes in the ordinary course of business consistent with Pivotal’s investment management policy, and except in the case of clause (ii), acquisitions of inventory, products or services in the ordinary course of business; Table of Contents
(e) directly or indirectly sell, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien or otherwise dispose in whole or in part of any of its material properties, assets or rights (including any material Pivotal Intellectual Property Registrations) or any interest therein, except, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Outpast practice;
(f) adopt not amend or enter into a plan modify the Company's certificate of complete incorporation or partial liquidation, dissolution, restructuring, recapitalization or other reorganizationbylaws;
(g) fail to maintainnot issue, redeem, exchange or allow to lapsesell any Capital Stock or other equity securities nor enter into any obligation convertible into or exchangeable or exercisable for any of its Capital Stock or other equity securities nor make any changes (by split-up, combination, reorganization or abandonotherwise) in the capitalization of the Company, including by failure to pay nor purchase, redeem or otherwise acquire any Capital Stock of the required fees in any jurisdiction, any material Pivotal Intellectual Property RegistrationsCompany;
(h) (i) incurnot pay, create, assume declare or otherwise become liable forset aside for payment any dividend or make or agree to make any distribution in respect of the Capital Stock or other securities of the Company or rights or obligations convertible into or exchangeable or exercisable for any shares of the Capital Stock or other securities of the Company or obligations convertible into such, or repayany options, cancel, forgive warrants or prepay, other rights to purchase or subscribe to any Indebtedness, or amend, modify or refinance any Indebtedness or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, other than Pivotal or any direct or indirect wholly owned Subsidiary of Pivotalthe foregoing;
(i) incur not make any other payments to the Sellers or commit to incur any capital expenditure or authorization or commitment with respect thereto that in the aggregate are in excess of $1,000,000;
(j) their Affiliates, except as required by any judgment by a court of competent jurisdiction, (i) pay, discharge, settle pursuant to Contracts or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge or satisfaction in the ordinary course of business, (B) as required by their terms as in effect commitments existing on the date of this Agreement of claims, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements in the ordinary course of business, and (ii) cancel any material Indebtedness owed to Pivotal or any of its Subsidiaries, or (iii) waive, release, grant or transfer any right of material value;
(k) (i) materially modify, materially amend, terminate, cancel, waive any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (ii) enter into any Contract that if in effect on the date hereof would be a Material Contract, other than customer contracts entered into in the ordinary course of business;
(l) commence any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal or any of its Subsidiaries), or compromise, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements in the ordinary course of business that involve only the payment of money damages consistent with past practice;
(j) not waive, compromise or settle any right or Claim in an amount in excess of $500,000 individually 25,000;
(k) not modify, amend or $2,000,000 terminate any Material Contract, any Company Plan or any employment agreement with any officer or employee of the Company, except for renewals thereof in the aggregate, in any case without the imposition of any equitable relief onaccordance with their terms, or enter into any new employment or severance agreement with any officer or employee of the admission of wrongdoing by, Pivotal or any of its SubsidiariesCompany;
(l) use commercially reasonable efforts to continue to carry and maintain in all material respects all existing insurance;
(m) change its financial not (i) create, incur, assume, guarantee or Tax accounting methodsotherwise become liable with respect to any indebtedness for borrowed money, principles issue or practicescause to be issued any notes, except insofar as may have been required by a change in GAAP bonds, debentures, letters of credit or applicable Lawgrant any option, warrant or right to purchase any thereof, other than pursuant to credit facilities existing on the date of this Agreement and consistent with past practice, or (ii) issue any securities convertible into or exercisable or exchangeable for any debt securities of the Company;
(n) settle use commercially reasonable efforts to maintain in full force and effect all material Permits held by the Company; and
(o) not agree to take any action or compromise actions prohibited by any material liability for Taxes or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liability; consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of a material amount of Taxes; grant any power of attorney with respect to material Taxes; enter into any Tax Sharing Agreement or any closing agreement or other similar agreement; or change any method of accounting for Tax purposes;foregoing clauses (a) through (n).
Appears in 2 contracts
Samples: Securities Purchase Agreement (Resource America Inc), Securities Purchase Agreement (Atlas America Inc)
Conduct of Business. During the period from the date of this Agreement to the Effective Time, except as consented to in writing in advance by VMware or as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) Except as required by applicable Law or expressly required by this Agreement, Pivotal shall, and shall cause each of its Subsidiaries to, carry on its business Agreement or as described in the ordinary course, including its development and sales efforts as currently contemplated, and use commercially reasonable efforts to (iSection 5.1(a) preserve intact its business organization, assets, rights and properties, (ii) keep available the services of its current officers, employees and consultants and (iii) preserve its goodwill and its relationships with customers, suppliers, licensors, licensees, distributors and others having material business dealings with it. In addition to and without limiting the generality of the foregoingCompany Disclosure Letter, during the period from the date of this Agreement to until the Effective TimeTime (or such earlier date on which this Agreement is terminated pursuant to Section 7.1), except unless Parent otherwise consents in writing (x) as set forth which consent shall not be unreasonably withheld, delayed or conditioned), the Company shall, and shall cause each of its Subsidiaries to carry on its business in section 5.1 all material respects in the ordinary course consistent with past practice. To the extent consistent with the foregoing, the Company shall, and shall cause its Subsidiaries to, use its and their commercially reasonable efforts to preserve its and each of its Subsidiaries’ business organizations intact and maintain existing relations with key customers, suppliers, distributors, employees and other Persons with whom the Company or its Subsidiaries have business relationships, assets, rights and properties. Without limiting the generality of the Pivotal Disclosure Letterforegoing, (y) and except as specifically required by applicable Law or as expressly required by this Agreement or (zas described in Section 5.1(a) as specifically required by applicable Lawof the Company Disclosure Letter, Pivotal during such period, the Company shall not, and shall not permit any of its SubsidiariesSubsidiaries to, without VMware’s prior written consent unless Parent otherwise consents in writing (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below consent shall not be unreasonably withheld, conditioned delayed or delayed, and in all other cases shall be in VMware’s sole discretion), to:conditioned):
(a) (i) declare(A) issue, set aside sell or pay grant any dividends onshares of its capital stock or other equity or voting interest, or make any other distributions (whether in cashsecurities or rights convertible into, exchangeable or exercisable for, or evidencing the right to subscribe for any shares of its capital stock or property) in respect ofother equity or voting interest, or any rights, warrants or options to purchase any shares of its capital stock or other equity or voting interest, or any securities or rights convertible into, exchangeable or exercisable for, or evidencing the right to subscribe for, any of its capital stock or other equity interestsor voting interest; provided that the Company may issue shares of Company Common Stock as required to be issued upon exercise or settlement of Options or other equity rights or obligations under the Company Stock Plans outstanding on the date hereof in accordance with the terms of the applicable Company Stock Plan in effect on the date hereof; (B) redeem, except for dividends by a wholly owned Subsidiary of Pivotal to Pivotal or any other wholly owned Subsidiary of Pivotal, (ii) purchase, redeem purchase or otherwise acquire any of its outstanding shares of capital stock or other equity interests of Pivotal or its Subsidiaries voting interest, or any optionsrights, warrants, warrants or rights options to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii) split, combine, reclassify or otherwise amend the terms of any of its capital stock or other equity 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 other equity interests;
(b) issue, deliver, sell, grant, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) any shares of its capital stock or other equity interests or voting interest, except (x) pursuant to written commitments in effect as of the date hereof only from former employees or directors in connection with any termination of services to the Company or any securities convertible intoof its Subsidiaries or (y) in connection with withholding to satisfy Tax obligations with respect to Options or Restricted Stock Units, exchangeable acquisitions in connection with the forfeiture of equity awards under the Company Stock Plans, or acquisitions in connection with the net exercise of Options; (C) establish a record date for, declare, set aside for payment or exercisable for pay any such dividend on, or make any other distribution in respect of, any shares of its capital stock or other equity interestsor voting interest; or (D) split, combine, subdivide or reclassify any rights, warrants or options to acquire, any such shares of its capital stock or other equity interestsor voting interest, it being understood that nothing in this Section 5.1(a)(i) shall restrict or otherwise impact the Company’s ability to adopt a rights agreement, “poison pill” or similar agreement or plan, provided that any such agreement or plan shall not be applicable to the Merger;
(ii) enter into any collective bargaining agreement or similar agreement with a labor union or works council or modify, amend or waive any such collective bargaining or similar agreement to which the Company or any stock appreciation rightsof its Subsidiaries is bound;
(iii) (A) incur, “phantom” stock rightsissue, performance unitsmodify, rights renew, syndicate or refinance any Indebtedness, except (x) any obligations for the deferred purchase price of property, goods or services to receive shares of capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including any Person incurred in connection with any acquisition permitted pursuant to Contracts Section 5.1(a)(vii), (y) capital contributions pursuant to any limited partnership agreements to which the Company or any Subsidiary is a party as in effect on the date hereof (other than the issuance of Class A Shares upon the exercise of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPP, in each case, that are outstanding on the date of this Agreement or as allowed to be entered into, or (z) minority investments not to exceed $2,000,000, individually, or $10,000,000, in the aggregate, (B) enter into any swap or hedging transaction or other derivative agreements other than in the ordinary course of business or (C) make any loans, capital contributions or advances to any Person (other than the Company and Made Available to VMware and otherwise in accordance with their terms as in effect on such dateany wholly-owned Subsidiary of the Company);
(civ) amend adopt or otherwise changeimplement any stockholder rights plan, or authorize or propose to amend or otherwise change, its certificate of incorporation or bylaws (“poison pill” or similar organizational documents)arrangement or plan that is applicable to the Merger;
(dv) directly sell or indirectly acquire lease, in a single transaction or agree to acquire (i) by merging series of related transactions, any of its properties or consolidating withassets whose value or purchase price, purchasing a substantial equity interest in or a substantial portion of the assets of, making an investment in or loan or capital contribution to individually or in any other mannerthe aggregate, any corporationexceeds $10,000,000, partnershipexcept (A) dispositions of obsolete or worthless assets, association or other business organization or division thereof (B) transfers among the Company and its Subsidiaries or (iiC) any assets that are otherwise material to Pivotal and its Subsidiaries, except, in each case, for the ordinary course of business;
(1vi) make or authorize capital expenditures which shall be subject except (x) as budgeted in the Company’s current plan approved by the Company Board that was made available to the limitations of clause Parent, (iy) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes in the ordinary course of business consistent with Pivotal’s investment management policypast practice, and except or (z) such expenditures as do not exceed $2,000,000, individually, or $10,000,000, in the case aggregate;
(vii) make any acquisition (including by merger) of clause (ii)the capital stock or, acquisitions of inventory, products or services except in the ordinary course of business; Table , a material portion of Contents
(e) directly or indirectly sell, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien or otherwise dispose in whole or in part the assets of any of its material properties, assets or rights (including any material Pivotal Intellectual Property Registrations) or any interest therein, except, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Out;
(f) adopt or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, other than Pivotal or any direct or indirect wholly owned Subsidiary of Pivotal;
(i) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto that in the aggregate are each case for consideration in excess of $1,000,0005,000,000, individually, or $15,000,000, in the aggregate;
(jviii) except (A) increase the compensation or benefits in respect of, any of its directors or executive officers, other than as required by the terms of any judgment Company Plan or as required by a court of competent jurisdictionapplicable Law, (iB) payincrease the salaries, discharge, settle wages or satisfy any claims, liabilities benefits of employees who are not executive officers or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise)directors of the Company, other than (x) as required by the terms of any Company Plan, (y) as required by applicable Law, (z) in the ordinary course of business and consistent with past practice, or (aa) as the Company deems in its reasonable discretion to be necessary in order to compensate such employee at a level consistent with market practice, (C) enter into any severance, change-in-control, retention, employment or other agreement with any employee, director or independent contractor or grant any new right or award under any Company Plan, other than (I) the payment of severance (excluding any equity acceleration) in the ordinary course of business and consistent with past practice in accordance with the terms of the Company’s existing severance arrangements and/or policy as of the date hereof and (II) severance agreements excluding any severance agreement with any employee who, as of the date of this Agreement, is a participant in the Company’s Change in Control Severance Plan: (1) with no more than 100 employees of the Company that are effective for a period not to exceed 12 months, (2) that provide for the payment of severance benefits that do not exceed an aggregate amount equal to one year’s base salary, (3) that together provide for an aggregate severance benefit of no more than $20,000,000 assuming all beneficiaries of such agreements are paid in full and (4) that provide for the payment of severance benefits only upon the termination of such employee’s employment without cause or the resignation of such employee as a result of the reduction of such employee’s base salary, (D) establish, adopt, terminate or amend any Company Plan or any plan, program, arrangement, practice or agreement that would be a Company Plan if it were in existence on the date hereof, other than as required by Law; (E) take any action to fund the payment of compensation or benefits under any Company Plan (unless required by the terms of any Company Plan); (F) exercise any discretion to accelerate the vesting or payment or any compensation or benefit under any Company Plan; or (G) extend an offer of employment to, or hire, any candidate for a senior vice president or more senior position, or any employee with an annual base salary in excess of $175,000; provided that the foregoing shall not restrict the Company or any of its Subsidiaries from entering into or making available to newly hired employees or to employees in the context of promotions based on job performance or workplace requirements (in each case in the ordinary course of business consistent with past practice) plans, agreements, benefits and compensation arrangements that have a value that is consistent with the past practice of making compensation and benefits available to newly hired or promoted employees in similar positions;
(ix) make any material changes in financial accounting methods, principles or practices (or change an annual accounting period), except insofar as may be required by applicable Law, including without limitation a change in GAAP;
(x) (A) modify, amend, terminate or waive in a manner that is adverse to the payment, discharge or satisfaction Company any rights under any material provision of a Material Contract other than in the ordinary course of business, (B) enter into any Contract, which if entered into prior to the date hereof would have been a Material Contract, other than in the ordinary course of business or (C) enter into any new Contract that contains a change in control provision in favor of the other party or parties thereto or would otherwise require a payment to or give rise to any rights to such other party or parties in connection with the transactions contemplated hereby (except as required by their terms as set forth in effect on Section 5.1(a)(vii));
(xi) amend the Company Charter Documents or organizational documents of any Subsidiary, other than (A) Subsidiaries acquired after the date of this Agreement of claimsor (B) in accordance with Section 5.1(a)(xiii), liabilities and it being understood that nothing in this Section 5.1(a)(xi) shall restrict or obligations reflected otherwise impact the Company’s ability to adopt a rights agreement, “poison pill” or reserved against in the most recent audited financial statements (similar agreement or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed prior plan, provided that any such agreement or plan shall not be applicable to the date hereof Merger;
(for amounts not xii) fail to make any material filing, pay any fee, or take another action necessary to maintain in full force and effect any Intellectual Property right owned by the Company or any Subsidiary that is material to the conduct of the business of the Company or any Subsidiary, or enter into any license or transfer agreement granting or transferring to a third party an exclusive right to use or ownership of any such Intellectual Property;
(xiii) adopt a plan or agreement of complete or partial liquidation or dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than among wholly-owned Subsidiaries);
(xiv) grant (A) any Lien (other than Permitted Liens) in any of its material assets, or (B) any Encumbrance (other than Permitted Encumbrances) in any of the Company Real Property;
(xv) fail to use its commercially reasonable efforts to maintain in full force and effect the existing insurance policies or to replace such insurance policies with comparable insurance policies covering the Company, its Subsidiaries and their respective properties, assets and businesses;
(xvi) pay, discharge, settle or compromise any pending or threatened Action which (A) requires payment to or by the Company or any Subsidiary of the Company (exclusive of attorney’s fees) in excess of such reserves) $5,000,000 in any single instance or (C) incurred since the date in excess of such financial statements $10,000,000 in the ordinary course of businessaggregate, (iiB) cancel any material Indebtedness owed to Pivotal involves injunctive or equitable relief or restrictions on the business activities of the Company or any of its Subsidiaries, or (iiiC) waive, release, grant involves the issuance of Company Securities or transfer equity or voting interests in any right Subsidiary of material valuethe Company;
(kxvii) except as required by Law, (ia) materially modify, materially amend, terminate, cancel, waive make any material change (or file a request to make any such change) in any method of Tax accounting or any annual Tax accounting period; (b) make, change or rescind any material Tax election; (c) settle or compromise any material Tax liability, audit claim or assessment; (d) intentionally surrender any right under or extend to claim for a material Tax refund; (e) file any Material Contract amended Tax Return (other than renewals to correct an identified error); (f) enter into any closing agreement or (g) waive or extend the statute of Contracts with customers limitations in respect of Pivotal Products any income or other material Taxes other than pursuant to extensions of time to file Tax Returns obtained in the ordinary course of business) or (ii) enter into any Contract that if in effect on the date hereof would be a Material Contract, other than customer contracts entered into in the ordinary course of business;; or
(lxviii) commence authorize any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal or any of its Subsidiaries)of, or compromise, settle commit or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements in the ordinary course of business that involve only the payment of money damages not in excess of $500,000 individually or $2,000,000 in the aggregateagree, in writing or otherwise, to take any case without of, the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal or any of its Subsidiaries;
(m) change its financial or Tax accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law;
(n) settle or compromise any material liability for Taxes or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liability; consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of a material amount of Taxes; grant any power of attorney with respect to material Taxes; enter into any Tax Sharing Agreement or any closing agreement or other similar agreement; or change any method of accounting for Tax purposes;foregoing actions.
Appears in 2 contracts
Samples: Merger Agreement (Dell Inc), Merger Agreement (Quest Software Inc)
Conduct of Business. During the period from (a) From the date of this Agreement to until the Effective TimeClosing Date (the “Interim Period”), except as consented to in writing in advance by VMware or as otherwise expressly required or prohibited (including by each Blocker and the restrictions set forth in subclauses (a) through (r) below) by this Agreement, Pivotal Company shall, and the Company shall cause each of its Subsidiaries to, carry on its business in the ordinary course, including its development and sales efforts except as currently contemplated, and use commercially reasonable efforts to (i) preserve intact its business organization, assets, rights and properties, (ii) keep available the services of its current officers, employees and consultants and (iii) preserve its goodwill and its relationships with customers, suppliers, licensors, licensees, distributors and others having material business dealings with it. In addition to and without limiting the generality of the foregoing, during the period from the date of this Agreement to the Effective Time, except (x) as set forth in section 5.1 of the Pivotal Disclosure Letter, (y) as specifically expressly required by this Agreement or (z) including with respect to the Pre-Closing Blocker Reorganization), as specifically required consented to by applicable Law, Pivotal shall not, and shall not permit any of its Subsidiaries, without VMware’s prior written consent HTP in writing (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below consent shall not be unreasonably withheld, conditioned or delayed) or as required by Law, use commercially reasonable efforts to operate its business only in the Ordinary Course of Business, including using reasonable best efforts to (i) preserve the business of the Company, (ii) maintain the services of its officers and Key Employees and (iii) maintain the existing business relationships of the Company.
(b) Without limiting the generality of the foregoing, except as expressly required by this Agreement (including with respect to the Pre-Closing Blocker Reorganization), as set forth on Section 8.01 of the Company Disclosure Schedule, as required by Law (including any COVID-19 Measures) or as consented to by HTP in writing (which consent shall not be unreasonably withheld, conditioned or delayed), during the Interim Period, each Blocker and the Company shall not, and in all other cases the Company shall be in VMware’s sole discretion), cause its Subsidiaries not to:
(a) (i) declareOther than in any manner that would not delay or impair the consummation of the Transactions, set aside change, amend or pay any dividends onpropose to amend the certificate of formation, operating agreement or make any other distributions (whether in cashorganizational documents of the Blockers, stock the Company or property) in respect of, any of its capital stock or other equity interests, except for dividends by a wholly owned Subsidiary of Pivotal to Pivotal or any other wholly owned Subsidiary of Pivotal, Subsidiaries;
(ii) purchasedirectly or indirectly adjust, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii) split, combine, reclassify subdivide, issue, pledge, deliver, award, grant, redeem, purchase or otherwise amend acquire or sell, or authorize or propose the terms issuance, pledge, delivery, award, grant or sale (including the grant of any encumbrances) of, any equity interests of the Company, including any Company Units or the equity interests of any of its capital stock or other equity interests or issue or authorize the issuance of any other securities in respect ofSubsidiaries, in lieu of or in substitution for shares of its capital stock or other equity interests;
(b) issue, deliver, sell, grant, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) any shares of its capital stock or other equity interests or any securities convertible into, exchangeable for into or exercisable or exchangeable for any such shares or other equity interests, or any rights, warrants or options to acquire, any such shares or other equity interests, interests or any stock appreciation rightsphantom stock, “phantom” phantom stock rights, stock appreciation rights or stock-based performance units, rights other than (w) in connection with the Note Subscription Agreements, (x) any issue of Company Units pursuant to receive shares outstanding Company Options or Incentive Units or Company Options to eligible Service Providers that vest on or prior to the Closing or would not cause the aggregate number of capital stock unvested Company Options to exceed the amount set forth on Section 8.01(b)(ii)(x) of VMware on the Company Disclosure Schedules, (y) any redemption, disposition, transfer or sale of Company Units by and among the Holders and their respective Affiliates, subject to the terms of the Company Voting and Support Agreement and so long as such transfers would not result in, together with the Transactions, a deferred basis change of control in respect of the Company or any of its Subsidiaries or materially, delay, impair or prevent the Transactions; and (z) subject to Section 8.01(b)(ii)(z) of the Company Disclosure Schedule, any issue of Company Units or securities issuable for or convertible into Company Units, so long as such transfers would not result in a change of control in respect of the Company or any of its Subsidiaries or materially, delay, impair or prevent the Transactions (clauses (w) through (z), a “Permitted Equity Financing”);
(iii) make or declare any dividend or distribution (whether in the form of cash or other rights linked property) (except as required with respect to the value Pre-Closing Blocker Reorganization);
(iv) other than in the Ordinary Course of Class A Shares Business, (x) modify, voluntarily terminate, permit to lapse, waive, or Class B Sharesfail to enforce any material right or remedy under any Significant Contract or (y) materially amend, including pursuant to Contracts extend or renew any Significant Contract;
(v) except as required by the terms of the Company Benefit Plans in effect on the date hereof or applicable Laws, (v) grant any severance, retention or termination pay to, or enter into or amend any severance, retention, termination, employment, consulting, bonus, change in control or severance agreement with, any current or former Service Provider other than severance granted to Service Providers in the Ordinary Course of Business in accordance with the terms of the severance plan, policy or guidelines in effect as of the date hereof and set forth on Section 8.01(b)(v)(v) of the Company Disclosure Schedule, (w) increase the compensation or benefits provided to any current or former Service Provider (other than merit-based increases in base compensation of not more than 12% to any individual employee with annual base compensation of less than $250,000 in the issuance Ordinary Course of Class A Shares upon Business or as permitted under Section 8.01(b)(v)(w)), (x) grant any equity or equity-based awards to, or discretionarily accelerate the exercise vesting or payment of Pivotal Optionsany such awards held by, any current or former Service Provider, other than grants of Incentive Units or Company Options to eligible Service Providers that vest on or prior to the settlement Closing or would not cause the aggregate number of Pivotal RSUs unvested Company Options to exceed the amount set forth on Section 8.01(b)(ii)(x) of the Company Disclosure Schedules, (y) establish, adopt, enter into, amend, or the exercise terminate any Company Benefit Plan or Labor Contract or (z) (A) hire any employees with an annual base compensation of purchase rights under the Pivotal ESPP, in each case, that are outstanding on over $250,000 other than to fill vacancies arising due to terminations of employment of employees following the date hereof or (B) terminate the employment of this Agreement and Made Available to VMware and otherwise any employees other than for cause or in the Ordinary Course of Business in accordance with their terms as in effect on such date)past practices;
(cvi) amend acquire (whether by merger or otherwise change, consolidation or authorize the purchase of a majority of the equity in or propose to amend assets of or otherwise change, its certificate of incorporation or bylaws (or similar organizational documents)otherwise) any other Person;
(dvii) directly except with respect to investments, loans, capital contributions or indirectly acquire other financing transactions by and among the Company and/or one or agree more of the Company’s Subsidiaries, (w) repurchase, prepay, redeem or incur, create, assume or otherwise become liable for Indebtedness of over $25,000,000 in the aggregate, including by way of a guarantee or an issuance or sale of debt securities, or issue or sell options, warrants, calls or other rights to acquire (i) by merging or consolidating with, purchasing a substantial equity interest in or a substantial portion any debt securities of the assets ofCompany or any of its Subsidiaries, making an investment in enter into any “keep well” or loan other Contract to maintain any financial statement or similar condition of another Person, or enter into any arrangement having the economic effect of any of the foregoing, (x) make any loans, advances or capital contribution to contributions to, or in investments in, any other mannerPerson, (y) cancel or forgive any corporation, partnership, association debts or other business organization amounts owed to the Company or division thereof any of its Subsidiaries or (iiz) commit to do any assets that are otherwise material to Pivotal and its Subsidiariesof the foregoing, except, in each casecase of the foregoing clauses (w) through (z), for (1A) capital expenditures any equipment financing in which shall be subject the amount financed is equal to the limitations lesser of the fair market value or cost of the relevant equipment being financed, (B) in connection with the Note Subscription Agreements, (C) any incurrence of Indebtedness under promissory notes that convert into Company Units on or prior to the Closing that would not result in a change of control in respect of the Company or any of its Subsidiaries; and (D) any incurrence of Indebtedness under the Company’s Indebtedness existing as of the date hereof (clauses (A) through (D), the “Permitted Interim Debt Financing” and together with the Permitted Interim Equity Financing, the “Permitted Interim Financing”). For the avoidance of doubt, the Blocker Parties shall not be permitted to incur any Indebtedness under the foregoing clause (iw);
(viii) below make any payment to a Related Party, other than (x) compensation to employees and service providers of the Company or any of its Subsidiaries in the Ordinary Course of Business in accordance with Section 8.01(b)(v) or (2y) purchases distributions and dividends allowed pursuant to Section 8.01(c) of marketable securities by the Company Disclosure Schedule;
(ix) (q) make or on behalf of Pivotal change any material Tax election, (r) take or fail to take any action that would result in the Company or its Subsidiaries (other than the Subsidiaries listed on Section 6.14(a) of the Company Disclosure Schedule) being treated as other than a partnership or disregarded entity for cash management U.S. federal income tax purposes or that would result in the ordinary course of business consistent with Pivotal’s investment management policy, and Blockers being treated as other than corporations for U.S. federal income tax purposes (except in for the case of clause (iiHTP Mergers), acquisitions (s) take or fail to take any action that would reasonably be expected to prevent, impair or impede the Intended Tax Treatment, (t) adopt or change any material Tax accounting method, (u) settle or compromise any material Tax liability, (v) enter into any closing agreement within the meaning of inventorySection 7121 of the Code (or any corresponding or similar provision of state, products local or services foreign Tax Law), (w) file any amended material Tax Return, (x) consent to any extension or waiver of the statute of limitations regarding any material amount of Taxes, (y) settle or consent to any claim or assessment relating to any material amount of Taxes or (z) consent to any extension or waiver of the statute of limitations for any such claim or assessment (other than pursuant to an extension of time to file a Tax Return of not more than seven months obtained in the ordinary course of business; Table of Contents);
(ex) directly except for non-exclusive licenses granted in the Ordinary Course of Business, assign, transfer, license, abandon, sell, lease, sublicense, modify, terminate, permit to lapse, create or indirectly incur any Lien (other than a Permitted Lien) on, or otherwise fail to take any action necessary to maintain, enforce or protect any Owned Intellectual Property, except for decisions made in Ordinary Course of Business in connection with the prosecution of applications for the foregoing;
(xi) (y) commence, discharge, settle, compromise, satisfy or consent to any entry of any judgment with respect to any pending or threatened Action that would reasonably be expected to (A) result in any material restriction on the Company or any of its Subsidiaries, (B) result in a payment of greater than $400,000 individually or $1,000,000 in the aggregate or (C) involve any equitable remedies or admission of wrongdoing, or (z) other than in the Ordinary Course of Business, waive, release or assign any claims or rights of the Company and any of its Subsidiaries;
(xii) sell, lease, license, sell and leasebacksublicense, abandonexchange, allow to lapsemortgage, mortgage or otherwise encumber or subject to pledge, create any Lien Liens (other than Permitted Liens) on, transfer or otherwise dispose in whole of, or in part agree to sell, lease, license, sublicense, exchange, mortgage, pledge, transfer or otherwise create any Liens (other than Permitted Liens) on or dispose of, any tangible or intangible assets, properties, securities, or interests of the Company or any of its material properties, assets Subsidiaries that are worth more than $1,000,000 (individually or rights (including any material Pivotal in the aggregate) other than non-exclusive licenses of Owned Intellectual Property Registrations) or any interest therein, except, granted in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Outof Business;
(fxiii) merge or consolidate itself or any of its Subsidiaries with any Person, restructure, reorganize or completely or partially liquidate or dissolve, or adopt or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) fail to maintainreorganization of, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, other than Pivotal or any direct or indirect wholly owned Subsidiary of Pivotal;
(i) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto that in the aggregate are in excess of $1,000,000;
(j) except as required by any judgment by a court of competent jurisdiction, (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge or satisfaction in the ordinary course of business, (B) as required by their terms as in effect on the date of this Agreement of claims, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements in the ordinary course of business, (ii) cancel any material Indebtedness owed to Pivotal or any of its Subsidiaries, or (iii) waive, release, grant or transfer any right of material value;
(k) (i) materially modify, materially amend, terminate, cancel, waive any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (ii) enter into any Contract that if in effect on the date hereof would be a Material Contract, other than customer contracts entered into in the ordinary course of business;
(l) commence any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal or any of its Subsidiaries), or compromise, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements in the ordinary course of business that involve only the payment of money damages not in excess of $500,000 individually or $2,000,000 in the aggregate, in any case without the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal Company or any of its Subsidiaries;
(mxiv) make any change its in financial or Tax accounting methods, principles or practicespractices of the Company and its Subsidiaries, except insofar as may have been required by a change in GAAP or Law or to obtain compliance with applicable LawAICPA auditing standards;
(nxv) settle permit any insurance policies listed in Section 6.16 of the Company Disclosure Schedule to be canceled or compromise terminated without using commercially reasonable efforts to prevent such cancellation or termination, other than if, in connection with such cancellation or termination, a replacement policy having comparable deductions and providing coverage substantially similar to the coverage under the lapsed policy for substantially similar premiums or less is in full force and effect;
(xvi) change, in any material liability respect, (x) the cash management practices of the Company and its Subsidiaries or (y) the policies, practices and procedures of the Company and its Subsidiaries with respect to collection of accounts receivable and establishment of reserves for Taxes uncollectible accounts;
(xvii) make any commitments for capital expenditures or surrender incur any liabilities by the Company or any of its Subsidiaries in respect of capital expenditures, in each case, other than consistent in all material respects with the Company’s annual capital expenditures budget for 2021 and 2022, in each case, as set forth on Section 8.01(b)(xvii) of the Company Disclosure Schedule (which capital expenditures may be made in 2021 or 2022);
(xviii) materially amend, modify or terminate any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; makePermit, revoke or modify any material Tax electionother than routine renewals, or change fail to maintain or timely obtain any Permit that is material to the entity classification ongoing operations of the Company and its Subsidiaries; or
(xix) enter into any Subsidiary for U.S. federal tax purposes; file agreement to do any Tax Return other than action prohibited under this Section 8.01.
(c) Nothing contained in this Section 8.01 shall give to HTP, directly or indirectly, the right to control or direct the ordinary course of business operations of the Company prior to the Closing Date. Prior to the Closing Date, each of HTP and on a basis the Company shall exercise, consistent with past practice that would materially the terms and adversely affect conditions hereof, complete control and supervision of its Tax liability; consent to any extension or waiver of the limitation period respective operations, as required by Law, including applicable to any claim or assessment in respect of a material amount of Taxes; grant any power of attorney with respect to material Taxes; enter into any Tax Sharing Agreement or any closing agreement or other similar agreement; or change any method of accounting for Tax purposes;Antitrust Laws.
Appears in 2 contracts
Samples: Merger Agreement (Highland Transcend Partners I Corp.), Merger Agreement (Highland Transcend Partners I Corp.)
Conduct of Business. During (ff) Except as set forth in Section 4.01(a) of the Company Disclosure Letter, expressly permitted by this Agreement, required by applicable Law or consented to in writing by Parent (such consent not to be unreasonably withheld, conditioned or delayed), during the period from the date of this Agreement to the Effective Time, except as consented to in writing in advance by VMware or as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) by this Agreement, Pivotal Company shall, and shall cause each of its Subsidiaries to, carry on its business in the ordinary course, including its development course and sales efforts as currently contemplated, and shall use commercially reasonable efforts to (i) preserve substantially intact its current business organizationorganizations, assetsmaintain their rights, rights franchises and properties, (ii) keep available the services of its current officers, employees Company Permits and consultants and (iii) to preserve its goodwill and its relationships with customers, significant customers and suppliers, licensors, licensees, distributors and others having material business dealings with it. In addition to and without Without limiting the generality of the foregoing, except as set forth in Section 4.01(a) of the Company Disclosure Letter, expressly permitted by this Agreement, required by applicable Law or consented to in writing by Parent (such consent not to be unreasonably withheld, conditioned or delayed), during the period from the date of this Agreement to the Effective Time, except (x) as set forth in section 5.1 of the Pivotal Disclosure Letter, (y) as specifically required by this Agreement or (z) as specifically required by applicable Law, Pivotal Company shall not, and shall not permit any of its Subsidiaries, without VMware’s prior written consent (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), Subsidiaries to:
(a) (i) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock or other equity interests, except for dividends by a wholly owned Subsidiary of Pivotal to Pivotal or any other wholly owned Subsidiary of Pivotal, (ii) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interestsstock, other than (A) dividends or distributions by a Subsidiary of the withholding Company (excluding WPZ), (B) dividends or distributions required under the applicable organizational documents of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, such entity in accordance with their terms effect on the date of this Agreement and (BC) the acquisition by Pivotal Pre-Merger Special Dividend;
(ii) take any action that would result in the Company or any of Pivotal Options or Pivotal RSUs its Subsidiaries becoming subject to any restriction not in existence on the date hereof with respect to the payment of this Agreement distributions or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or dividends;
(iii) split, combine, combine or reclassify or otherwise amend the terms of any of its capital stock or other equity 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, other than transactions by a wholly owned Subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction;
(iv) purchase, redeem or otherwise acquire any shares of its or its Subsidiaries’ capital stock or other equity interestssecurities or any rights, warrants or options to acquire any such shares or other securities, other than (A) the acquisition by the Company of shares of Company Common Stock in connection with the surrender of shares of Company Common Stock by holders of Company Stock Options in order to pay the exercise price of the Company Stock Options, (B) the withholding of shares of Company Common Stock or WPZ Common Units to satisfy Tax obligations with respect to awards granted pursuant to the Company Stock Plans or the WPZ Legacy Long-Term Incentive Plan and (C) the acquisition by the Company or WPZ, as applicable, of awards granted pursuant to the Company Stock Plans or the WPZ Legacy Long-Term Incentive Plan and purchase rights under the Company ESPP in connection with the forfeiture of such awards or rights, in each case that are outstanding as of the date hereof and in accordance with their terms as of the date hereof;
(bv) issue, deliver, sell, grantpledge, pledge or otherwise dispose of, encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) any shares of its capital stock or stock, ownership interests, any other equity interests voting securities or any securities convertible into, exercisable or exchangeable for or exercisable for any such shares or other equity interestsfor, or any rights, warrants or options to acquire, any such shares or other equity shares, ownership interests, voting securities or convertible securities or any stock appreciation rights“phantom” stock, “phantom” stock rights, stock appreciation rights or stock-based performance units, rights to receive shares of capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof (other than the issuance of Class A Shares (A) upon the exercise of Pivotal Options, the settlement of Pivotal RSUs Company Stock Options or the exercise of purchase rights under the Pivotal ESPPCompany ESPP and (B) upon the vesting or settlement of Company RSUs or Director DSUs granted under the Company Stock Plans and WPZ Phantom Units granted under the WPZ Legacy Long-Term Incentive Plan, in the case of each case, of clause (A) and (B) that are outstanding on as of the date of this Agreement hereof and Made Available to VMware and otherwise in accordance with their terms as in effect on such date)of the date hereof;
(cvi) amend (A) the Company Certificate of Incorporation or otherwise change, the Company By‑laws or authorize or propose to amend or otherwise change, its certificate (B) the comparable organizational documents of incorporation or bylaws (or similar organizational documents)any Subsidiary of the Company in any material respect;
(dvii) directly acquire any business, whether by merger, consolidation, purchase of property or indirectly acquire or agree to acquire (i) by merging or consolidating with, purchasing a substantial equity interest in or a substantial portion of the assets of, making an investment in or loan or capital contribution to or in any other manner, any corporation, partnership, association or other business organization or division thereof or (ii) any assets that are otherwise material to Pivotal and its Subsidiaries, except, in each case, for (1) capital expenditures which shall be subject to the limitations of clause (i) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes in the ordinary course of business consistent with Pivotal’s investment management policy, and except in the case of clause (ii), acquisitions of inventory, products or services in the ordinary course of business; Table of Contents
(e) directly or indirectly sell, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien or otherwise dispose in whole or in part of any of its material properties, assets or rights (including any material Pivotal Intellectual Property Registrationsequity interests) or any interest therein, except, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Out;
(f) adopt or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (ii) make any loans, advances or capital contributions to, or investments in, any other Personperson, other than Pivotal in connection with transactions solely between or among the Company and its Subsidiaries or as permitted by Section 4.01(a)(xii); provided, however, that notwithstanding the foregoing, the Company shall not, and shall not permit any direct of its Subsidiaries to, acquire any business or indirect wholly owned Subsidiary make any loans, advances or capital contributions to, or investments in, any other person which would reasonably be expected to prevent or impede the consummation of Pivotalthe Transactions, including the Merger;
(iviii) incur enter into or commit make any loans or advances to incur any capital expenditure of its officers, directors, employees, agents or authorization consultants (other than loans or commitment with respect thereto that advances (A) in the aggregate are ordinary course of business or (B) for travel and reasonable business expenses) or make any change in excess its existing borrowing or lending arrangements for or on behalf of $1,000,000;
(j) any of such persons, except as required by the terms of any judgment by a court Company Benefit Plan;
(ix) sell, license, lease, transfer, assign, divest, cancel, abandon or otherwise dispose of competent jurisdictionany of its properties, (i) pay, discharge, settle rights or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise)assets, other than (A) the payment, discharge sales or satisfaction other dispositions of assets in the ordinary course of business, (B) sales, transfers and dispositions of obsolete, non-operating or worthless assets or properties and (C) sales, leases, transfers or other dispositions made by the Company to any of its Subsidiaries or in connection with any transaction among the Company’s wholly owned Subsidiaries;
(x) directly or indirectly, waive, transfer, pledge, encumber, sell or dispose of, or authorize any waiver, transfer, pledge, encumbrance, sale or disposal of all or any portion of the WPZ General Partner Interest or the WPZ IDRs owned by the Company, except with respect to any waivers of or subsidies relating to WPZ IDRs (A) agreed to prior to entry into this Agreement and in connection with the payment of the WPZ Fee pursuant to the terms of the WPZ Merger Agreement, and any extensions of such previously agreed waivers and subsidies and (B) agreed to in connection with any transaction permitted by Section 4.01(a)(vii); provided that neither the Company nor any of its Subsidiaries may waive or grant subsidies pursuant to this exception in excess of the incremental distributions that it would have otherwise expected to receive as a result of any such permitted transaction;
(xi) incur, redeem, prepay, defease, cancel, or, in any material respect, modify any indebtedness for borrowed money, issue or sell any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee, assume or endorse or otherwise as an accommodation become responsible for any such indebtedness or any debt securities or other financial obligations of another person (including all capitalized lease or leverage lease obligation or obligations to pay the deferred and unpaid purchase price of property and equipment and obligations pursuant to securitization of factoring programs or arrangements) or enter into any “keep well” or other agreement to maintain any financial statement condition of another person (collectively, “Indebtedness”), other than (A) Indebtedness incurred in the ordinary course of business, (B) prepayments of Indebtedness at stated maturity or pursuant to any required by their amortization payments or mandatory prepayments, in each case in accordance with the terms of the instrument governing such Indebtedness as in effect on of the date of this Agreement Agreement, (C) Indebtedness incurred by the Company or a wholly owned Subsidiary of the Company to the Company or a wholly owned Subsidiary of the Company, (D) Indebtedness incurred to replace, renew, extend, refinance or refund any existing Indebtedness on substantially the same or more favorable terms to the Company than such existing Indebtedness and (E) with respect to any Indebtedness not incurred in accordance with clauses (A) through (D), for any Indebtedness not to exceed the amounts set forth in Section 4.01(a)(xi) of the Company Disclosure Letter; provided, however, that in the case of each of clauses (A) through (E) such Indebtedness does not impose or result in any additional restrictions or limitations in any material respect on the Company or any of its Subsidiaries or, following the Closing, TopCo or any of its Subsidiaries, or subject the Company or any of its Subsidiaries or, following the Closing, TopCo or any of its Subsidiaries, to any additional covenants or obligations in any material respect (other than the obligations to make payment on such Indebtedness) to which the Company or its Subsidiaries is not otherwise subject under the terms of any Indebtedness outstanding as of the date hereof;
(xii) make any capital expenditures other than (A) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages or otherwise and (B) expenditures to maintain the safety and integrity of any asset or property;
(xiii) settle any non-Tax claim, investigation, proceeding or litigation with a Governmental Entity or third party, in each case threatened, made or pending against the Company or any of its Subsidiaries, other than the settlement of claims, liabilities investigations, proceedings or obligations litigation made in the ordinary course of business or for an amount (excluding any amounts that are covered by any insurance policies of the Company or its Subsidiaries, as applicable) not in excess of the amount reflected or reserved against therefor in the most recent audited financial statements (or the notes thereto) of Pivotal the Company included in the Pivotal Company Filed SEC Documents filed prior Documents;
(xiv) except as required pursuant to the terms of any Company Benefit Plan or other written agreement, in each case, in effect on the date hereof hereof, (for amounts A) grant to any director, executive officer, employee or consultant any increase in compensation or pay, or award any bonuses or incentive compensation, other than annual increases of base compensation (not to exceed 3% per individual) and payouts of compensation to employees (other than, in excess the case of such reservesboth increases and payouts, with respect to executive officers and directors) in the ordinary course of business consistent with past practice, (B) grant to any current or former director, executive officer or employee any increase in severance, retention or termination pay, (C) incurred since grant or amend any equity awards, (D) enter into any new or modify any existing employment or consulting agreement with any current or former director, executive officer, employee or individual consultant, (E) establish, adopt, enter into or amend any collective bargaining agreement or Company Benefit Plan or any agreement, plan or arrangement that would constitute a Company Benefit Plan if in effect on the date of such financial statements this Agreement, other than immaterial amendments to a Company Benefit Plan in the ordinary course of business, consistent with past practice, that are not specifically intended to and do not result in a significant increase in the eligibility, payments or benefits under such Company Benefit Plan, (iiF) cancel take any material Indebtedness owed action to Pivotal accelerate any rights or benefits under any Company Benefit Plan, (G) terminate the employment of any of its Subsidiariesemployees or other service providers, or (iii) waive, release, grant or transfer any right of material value;
(k) (i) materially modify, materially amend, terminate, cancel, waive any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business, consistent with past practice; provided that, in no event may the Company or any of its Subsidiaries terminate the employment of any individual who is party to an individual change in control, severance or transaction bonus agreement; (H) hire any employee or other service provider, other than field and field support employees and field and field support service providers in the ordinary course of business, consistent with past practice; (I) fund or make any contribution to any Company Benefit Plan or any related trust or other funding vehicle, other than regularly scheduled contributions to trusts funding qualified plans; provided, however, that the foregoing shall not restrict the Company or any of its Subsidiaries from entering into or making available to newly-hired employees or to employees in the context of promotions to positions at or below the level of Manager based on job performance or workplace requirements, in each case, in the ordinary course of business, plans, agreements, benefits and compensation arrangements (excluding the award of any incentive equity grants and any individual severance arrangements) that have a value that is consistent with the past practice of making compensation and benefits available to newly-hired or promoted employees in similar positions;
(xv) other than as required (A) by GAAP (or any interpretation thereof), including pursuant to standards, guidelines and interpretations of the Financial Accounting Standards Board or any similar organization, or (iiB) by Law, including pursuant to SEC rule or policy, make any change in financial accounting methods, principles or practices or any of its methods of reporting income, deductions or other material items for financial accounting purposes affecting the consolidated assets, liabilities or results of operations of the Company where such change would reasonably be expected to be material to the Company and its Subsidiaries, taken as a whole;
(xvi) (A) make any change (or file any such change) in any material method of Tax accounting, except as required by applicable Law, (B) make, change or rescind any material Tax election, (C) settle or compromise any material Tax liability or consent to any claim or assessment relating to a material amount of Taxes, (D) amend any material Tax Return or (E) enter into any closing agreement relating to a material amount of Taxes;
(a) modify, amend, renew, extend, terminate or waive any rights under (1) any Company Specified Contract in a manner that is materially adverse to the Company and its Subsidiaries, taken as a whole, or that could prevent or materially delay the consummation of the Transactions, including the Merger, and (2) to the extent not included in subclause (1), any NGL-related contract or any Energy Products derived therefrom or any agreement involving Chesapeake Energy Corporation or any of its Subsidiaries that involves, or is reasonably expected in the future to involve, annual revenues of $50.0 million in the aggregate; provided, however, that this clause (xvii) shall not apply to extensions and renewals for a time period of 12 months or less that are on terms no less favorable to the Company and its Subsidiaries, or (b) enter into any Contract that if in effect on it had been entered into prior to the date hereof of this Agreement, would be have been a Material Company Specified Contract, other than customer contracts entered into in the ordinary course of business;
(lxviii) commence take any Legal Proceeding (other than a Legal Proceeding action or fail to take any action that would reasonably be expected to cause WPZ to be treated, for U.S. Federal income Tax purposes, as a result of a Legal Proceeding commenced against Pivotal or any of its Subsidiaries), or compromise, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements in the ordinary course of business that involve only the payment of money damages not in excess of $500,000 individually or $2,000,000 in the aggregate, in any case without the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal or any of its Subsidiariescorporation;
(mxix) change its financial or Tax accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law;
(n) settle or compromise any material liability for Taxes or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business business, modify, amend, surrender, terminate, or waive any rights under any Company Permit in a manner that is materially adverse to the Company and on its Subsidiaries, taken as a basis consistent with past practice whole, or that would could prevent or materially and adversely affect its Tax liability; consent to any extension or waiver delay the consummation of the limitation period applicable to any claim Transactions, including the Merger;
(xx) adopt or assessment in respect of a material amount of Taxes; grant any power of attorney with respect to material Taxes; enter into any Tax Sharing Agreement a plan of complete or any closing agreement partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other similar agreementreorganization, other than the Merger and any other mergers, consolidations, restructurings, recapitalizations or other reorganizations solely among the Company and its Subsidiaries or among its Subsidiaries; or
(xxi) authorize any of, or change commit or agree to take any method of, the foregoing actions prohibited pursuant to clauses (i) through (xx) of accounting for Tax purposes;this Section 4.01(a).
Appears in 2 contracts
Samples: Merger Agreement (Energy Transfer Equity, L.P.), Merger Agreement (Energy Transfer Equity, L.P.)
Conduct of Business. During From the period date hereof until the Closing Date, except as set forth on Section 6.02 of the Disclosure Schedule, the Company shall conduct its business and shall cause its Subsidiaries to conduct their respective businesses in, and only in, the ordinary course and shall use, and shall cause its Subsidiaries to use, their best efforts to preserve intact their respective present business organizations, operations, goodwill and relationships with third parties (including customers and vendors) and to keep available the services of the present directors, officers and key employees. Without limiting the generality of the foregoing, from the date hereof until the Closing Date, without the prior written consent of this Agreement to the Effective Time, Investor (except as consented to in writing in advance expressly permitted or required by VMware or as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses this Agreement):
(a) through (r) below) by this Agreement, Pivotal shallthe Company shall not, and shall cause each of its Subsidiaries not to, carry on its business other than in the ordinary coursecourse of business, including its development and sales efforts as currently contemplated, and use commercially reasonable efforts to (i) preserve intact its business organization, assets, rights and properties, (ii) keep available the services of its current officers, employees and consultants and (iii) preserve its goodwill and its relationships with customers, suppliers, licensors, licensees, distributors and others having material business dealings with it. In addition to and without limiting the generality sell any of the foregoing, during the period from the date of this Agreement to the Effective Time, except (x) as set forth in section 5.1 assets of the Pivotal Disclosure LetterCompany or its Subsidiaries (or the securities of entities holding the same) to any Person, other than the Company or a Wholly Owned Subsidiary of the Company, in one transaction or a series of related transactions, in which the fair value of the assets being sold, or the total consideration (yin the form of cash or property and including any contingent consideration and any Indebtedness or other obligations assumed) as specifically required to be received by this Agreement or (z) as specifically required by applicable Law, Pivotal shall not, the Company and shall not permit any of its Subsidiaries, without VMware’s prior written consent (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), to:
(a) (i) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock or other equity interests, except for dividends by a wholly owned Subsidiary of Pivotal to Pivotal or any other wholly owned Subsidiary of Pivotal, (ii) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii) split, combine, reclassify or otherwise amend the terms of any of its capital stock or other equity 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 other equity interestsexceeds $50,000;
(b) issue, deliver, sell, grant, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) any shares of its capital stock or other equity interests or any securities convertible into, exchangeable for or exercisable for any such shares or other equity interests, or any rights, warrants or options to acquire, any such shares or other equity interests, or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive shares of capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof (other than the issuance of Class A Shares upon the exercise of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPP, in each case, that are outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with their terms as in effect on such date);
(c) amend or otherwise change, or authorize or propose to amend or otherwise change, its certificate of incorporation or bylaws (or similar organizational documents);
(d) directly or indirectly acquire or agree to acquire (i) by merging or consolidating with, purchasing a substantial equity interest in or a substantial portion of the assets of, making an investment in or loan or capital contribution to or in any other manner, any corporation, partnership, association or other business organization or division thereof or (ii) any assets that are otherwise material to Pivotal and its Subsidiaries, except, in each case, for (1) capital expenditures which shall be subject to the limitations of clause (i) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes in the ordinary course of business consistent with Pivotal’s investment management policypast practice, the Company shall not, and except shall cause each of its Subsidiaries not to, acquire any assets, in one transaction or series of related transactions, in which the total consideration (in the form of cash or property and including any contingent consideration and any Indebtedness or other obligations assumed) to be paid by the Company and its Subsidiaries exceeds $50,000;
(c) the Company shall not, and shall cause each of its Subsidiaries, as the case may be, not to take any of clause the actions or enter into any of the agreements, commitments or transactions described below:
(i) any change or amendment to the Certificate of Incorporation or By-laws or the certificate or articles of incorporation, bylaws or other organizational documents of any Subsidiaries of the Company;
(ii)) any issuance or sale, acquisitions or any direct or indirect purchase, redemption or other acquisition of inventoryany shares of their respective Equity Interests or Derivative Securities, products other than pursuant to this Agreement or services in transactions contemplated hereby or the ordinary course of business; Table of ContentsOption Plan;
(eiii) directly any dividend or indirectly sellother distribution declared, leaseset aside, license, sell and leaseback, abandon, allow paid or made with respect to lapse, mortgage Equity Interests by the Company or otherwise encumber or subject to any Lien or otherwise dispose in whole or in part of any of its material propertiesSubsidiaries, assets except (x) dividends or rights other distributions made to the Company or to any Subsidiary of the Company and (including y) dividends and distributions declared, set aside, paid or made by any material Pivotal Intellectual Property Registrations) joint venture in which the Company or any interest thereinSubsidiary owns an equity interest, exceptwhich dividends and distributions were declared, set aside, paid or made in each case, accordance with the organizational documents or related service agreements of such joint venture as in effect on the date of such payment;
(iiv) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior to any increase in excess of $50,000 in the Effective Time pursuant to existing Contracts that are not material to Pivotal Indebtedness of the Company and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Outwhole, other than increases due to borrowings under existing lines of credit;
(fv) adopt or enter into a plan any amendment of complete or partial liquidationany mortgage, dissolutionLien, restructuringlease, recapitalization Regulatory Approval, loan agreement, indenture or other reorganizationagreement, instrument or document, which amendment is material to the Company and its Subsidiaries, taken as a whole;
(gvi) fail to maintainany default, event of default or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
breach (h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, other than Pivotal or any direct or indirect wholly owned Subsidiary of Pivotal;
(i) incur or commit to incur any capital expenditure or authorization or commitment event which, with respect thereto that in the aggregate are in excess of $1,000,000;
(j) except as required by any judgment by a court of competent jurisdiction, (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge or satisfaction in the ordinary course of business, (B) as required by their terms as in effect on the date of this Agreement of claims, liabilities or obligations reflected or reserved against in the most recent audited financial statements (notice or the notes theretopassage of time or both, would constitute a default, event of default or breach) of Pivotal included in by the Pivotal SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements in the ordinary course of business, (ii) cancel any material Indebtedness owed to Pivotal Company or any of its Subsidiaries of any credit, financing or other agreement or instrument relating to any Indebtedness, which default, event of default or breach is material to the Company and its Subsidiaries, or (iii) waive, release, grant or transfer any right of material valuetaken as a whole;
(kvii) any commitment, agreement or transaction entered into, amended, or terminated (ior any waiver of any rights or remedies under any of the foregoing) materially modifyby the Company or any of its Subsidiaries (including any agreement with respect to any ongoing or threatened litigation) that is material to the Company and its Subsidiaries, materially amend, terminate, cancel, waive any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (ii) enter into any Contract that if in effect on the date hereof would be taken as a Material Contractwhole, other than customer contracts entered into in the ordinary course of business;
(lviii) commence any Legal Proceeding (other than a Legal Proceeding as a result entry into or amendment of a Legal Proceeding commenced against Pivotal any material employment, severance, compensation, consulting, retention, change of control or similar agreement with, or any material increase in the compensation or benefits payable or to become payable by the Company or any of its Subsidiaries)Subsidiaries to, any employee of the Company or compromise, settle or agree to settle any Legal Proceeding, of its Subsidiaries (other than Transaction Litigation which is subject agreements terminable without penalty or similar payment by the Company or such Subsidiary, as the case may be, on not more than 30 days' notice and increases in compensation payable or to section 5.7), compromises, settlements become payable to employees (other than directors or agreements officers) in the ordinary course of business that involve only the payment of money damages not in excess of $500,000 individually or $2,000,000 in the aggregate, in any case without the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal or any of its Subsidiariesconsistent with past practice);
(mix) any change its in the financial or Tax accounting methods, principles or practicespractices of the Company and its Subsidiaries for financial accounting purposes, except insofar as may have been required by a change in GAAP or applicable Law;
(nx) settle or compromise other than the amalgamation of MEMC Partecipazioni S.r.l with and into the Italian Subsidiary, any material liability for Taxes or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change the entity classification adoption of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liability; consent to any extension agreement or waiver of the limitation period applicable to any claim or assessment in respect of a material amount of Taxes; grant any power of attorney understanding with respect to material Taxes; enter into any Tax Sharing Agreement Change in Control, merger, consolidation or other reorganization with respect to the Company or any closing of its Subsidiaries, or any adoption of any plan, agreement or arrangement with respect to, or resolutions providing for, the liquidation or dissolution of the Company or any of its Subsidiaries; or
(xi) any settlement or compromise of any Proceeding other similar agreementthan those in which the amount paid (to the extent not reimbursed with the proceeds of any insurance policy) does not exceed $50,000.
(d) the Company shall not, and shall cause each of its Subsidiaries not to, take any action that it knows or has reason to believe would cause a representation or warranty of the Company set forth herein to be untrue in any material respect if made at such time, or a covenant of the Company set forth in Article VII to fail to be satisfied as of the Closing Date; and
(e) the Company shall not, and shall cause each of its Subsidiaries not to, commit or change agree to do any method of accounting for Tax purposes;the foregoing.
Appears in 2 contracts
Samples: Restructuring Agreement (Memc Electronic Materials Inc), Restructuring Agreement (Memc Electronic Materials Inc)
Conduct of Business. During (a) Except for matters set forth in Section 5.01(a) of the period Company Disclosure Letter or otherwise contemplated by this Agreement, from the date of this Agreement to the Effective Time, except as consented to in writing in advance by VMware or as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) by this Agreement, Pivotal Company shall, and shall cause each of its Subsidiaries Company Subsidiary to, carry on (i) conduct its business in the usual, regular and ordinary course, including its development and sales efforts course in substantially the same manner as currently contemplated, and use commercially reasonable efforts to (i) preserve intact its business organization, assets, rights and propertiespreviously conducted, (ii) use all reasonable efforts to preserve intact its current business organization, (iii) use all reasonable efforts to keep available the services of its current officers, officers and employees and consultants and (iii) preserve its goodwill and keep its relationships with customers, suppliers, licensors, licensees, distributors and others having material business dealings with it. them, and (iv) comply, in all material respects, with all applicable Laws.
(b) In addition to addition, and without limiting the generality of the foregoing, during except for matters set forth in Section 5.01(b) of the period Company Disclosure Letter or otherwise contemplated by this Agreement, from the date of this Agreement to the Effective Time, except (x) as set forth in section 5.1 of the Pivotal Disclosure Letter, (y) as specifically required by this Agreement or (z) as specifically required by applicable Law, Pivotal Company shall not, and shall not permit any Company Subsidiary to, do any of its Subsidiaries, the following without VMware’s the prior written consent (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), toParent:
(ai) (iA) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock or other equity interests, except for dividends by a wholly owned Subsidiary of Pivotal to Pivotal or any other wholly owned Subsidiary of Pivotal, (ii) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interestsstock, other than (A) cash dividends and distributions by a direct or indirect wholly owned subsidiary of the withholding of Class A Shares Company to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreementits parent, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awardsadjust, in accordance with their terms on the date of this Agreement, or (iii) split, combine, combine or reclassify or otherwise amend the terms of any of its capital stock or other equity 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 stock, or other equity interests;
(bC) issuepurchase, deliver, sell, grant, pledge redeem or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) acquire any shares of its capital stock or other equity interests of the Company or any Company Subsidiary or any other securities convertible into, exchangeable for or exercisable for any such shares or other equity interests, thereof or any rights, warrants or options to acquire, acquire any such shares or other equity interestssecurities;
(ii) issue, deliver, hypothecate, pledge, sell, grant or otherwise encumber (A) any shares of its capital stock, (B) any Voting Company Debt or other voting securities, (C) any securities convertible into or exchangeable for, or any stock appreciation rightsoptions, warrants or rights to acquire, any such shares, Voting Company Debt, voting securities or convertible or exchangeable securities or (D) any “phantom” stock, “phantom” stock rights, stock appreciation rights, restricted stock awards, dividend equivalent awards or stock-based performance units, rights to receive shares of capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof (other than the issuance of Class A Shares Company Common Stock upon the exercise of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPP, in each case, that are Company Options outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with their terms as in effect on such date)present terms;
(ciii) amend the terms of any outstanding debt or otherwise change, equity security (including any Company Option) or authorize the Company Option Plan;
(iv) amend or propose to amend its articles of incorporation, bylaws or otherwise change, its certificate of incorporation other comparable charter or bylaws (or similar organizational documents);
(dv) directly or indirectly acquire or agree to acquire (iA) by merging or consolidating with, or by purchasing a substantial equity interest in or a substantial portion of the assets of, making an investment in or loan or capital contribution to or in by any other manner, any business or any corporation, partnership, joint venture, association or other business organization or division thereof or (iiB) except as permitted by Section 5.01(b)(x), any assets that are otherwise material to Pivotal and its Subsidiariesassets, except, in each case, for (1) capital expenditures which shall be subject to the limitations of clause (i) below and (2) except purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes inventory, equipment and raw materials in the ordinary course of business consistent with Pivotal’s investment management policypast practice;
(vi) (A) grant to any current or former executive officer, and director, employee or consultant of the Company or any Company Subsidiary any increase in compensation, severance, termination pay or fringe or other benefits, except in the case of clause (ii), acquisitions of inventory, products or services in the ordinary course of business; Table business consistent with prior practice or to the extent required under employment agreements in effect as of Contentsthe date of the most recent financial statements including in Filed Company SEC Documents, (B) enter into any new, or amend any existing, employment, consulting, indemnification, change of control, severance or termination agreement with any such current or former executive officer, director, employee or consultant, (C) establish, adopt, enter into or amend any collective bargaining agreement or Company Benefit Plan or (D) take any action to accelerate any rights or benefits, or make any determinations not in the ordinary course of business consistent with prior practice, under any collective bargaining agreement or Company Benefit Plan;
(evii) directly revalue any material assets or indirectly make any change in accounting methods, principles or practices, except insofar as may be required by a change in GAAP;
(viii) sell, leaselease (as lessor), license, sell and leaseback, abandon, allow to lapse, mortgage license or otherwise encumber dispose of or subject to any Lien any properties or otherwise dispose assets, other than (A) sales of inventory in whole the ordinary course of business consistent with past practice and (B) other dispositions in the ordinary course of business consistent with past practice so long as the aggregate value of all assets so disposed does not exceed $250,000;
(ix) (A) assume or in part incur any Indebtedness, issue or sell any debt securities or warrants or other rights to acquire any debt securities of the Company or any Company Subsidiary, guarantee any debt securities of another person, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of its material propertiesthe foregoing, assets or rights (including any material Pivotal Intellectual Property Registrations) or any interest therein, except, except for short-term borrowings incurred in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirationsthe ordinary course of business consistent with past practice which in the aggregate do not exceed $100,000, or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Out;
(f) adopt or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (iiB) make any loans, advances or capital contributions to, or investments in, any other Personperson, other than Pivotal loans or advances to, or investments in, any direct or indirect wholly owned Subsidiary subsidiary of Pivotalthe Company existing on the date of this Agreement in the ordinary course of business consistent with past practice;
(ix) incur make or commit agree to incur make any capital expenditure or authorization or commitment with respect thereto that in the aggregate are individually is in excess of $1,000,0001,500,000 or, collectively, with all other capital expenditures made during the period, is in excess of $5,000,000 in the aggregate;
(jxi) except as required by authorize, recommend, propose or announce an intention to adopt a plan of complete or partial liquidation or dissolution;
(xii) (A) make or rescind any judgment by a court of competent jurisdictiontax election, (iB) take any tax position or settle or compromise any claim, action, suit, arbitration, investigation, audit, examination, litigation, proceeding (whether judicial or administrative) or matter in controversy relating to taxes, or (C) make any change to its method of reporting income, deductions or other tax items for tax purposes;
(xiii) enter into any material license with respect to Intellectual Property Rights owned by the Company or any Company Subsidiary unless such license is non-exclusive and entered into in the ordinary course of business consistent with past practice;
(xiv) enter into any new line of business outside the medical laboratory business;
(xv) settle or compromise any pending or threatened claims, litigations, arbitrations or other proceedings (A) involving potential payments by or to the Company or any Company Subsidiary of more than $250,000 in the aggregate, (B) that admit liability or consent to non-monetary relief, or (C) that otherwise are or could reasonably be expected to be material to the Company and the Company Subsidiaries, taken as a whole;
(xvi) (A) pay, discharge, settle discharge or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge or satisfaction satisfaction, in the ordinary course of businessbusiness consistent with past practice or in accordance with their terms, (B) as required by their terms as in effect on the date of this Agreement of claims, liabilities or obligations reflected or reserved against in the most recent audited consolidated financial statements (or the notes thereto) of Pivotal the Company included in the Pivotal SEC Documents filed 2004 10-K, (B) cancel any Indebtedness, (C) waive or assign any claims or rights of substantial value, or (D) waive any benefits of, or agree to modify any respect, or fail to enforce, or consent to any matter with respect to which consent is required under, any confidentiality, standstill or similar agreement to which the Company or any Company Subsidiary is a party;
(xvii) enter into, amend in any material respect or terminate any Company Material Contract or any Contract that would be a Company Material Contract if entered into prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements in the ordinary course of business, (ii) cancel any material Indebtedness owed to Pivotal or any of its Subsidiaries, or (iii) waive, release, grant or transfer any right of material valuethis Agreement;
(k) (i) materially modify, materially amend, terminate, cancel, waive any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (iixviii) enter into any Contract that if to the extent consummation of the Transactions or compliance by the Company with the provisions of this Agreement could reasonably be expected to result in effect on the date hereof would be a Material Contractviolation of such contract, other than customer contracts entered into in the ordinary course of businessagreement or arrangement;
(lxix) commence enter into, modify, amend, cancel or terminate any Legal Proceeding Contract which if so entered into, modified, amended or terminated could reasonably be expected to (other than A) have a Legal Proceeding as a result Company Material Adverse Effect, (B) impair in any material respect the ability of a Legal Proceeding commenced against Pivotal the Company to perform its obligations under this Agreement or (C) prevent or materially delay the consummation of the Transactions;
(xx) alter (through merger, liquidation, reorganization, restructuring or any other fashion) the corporate structure or ownership of its Subsidiaries)the Company or any Company Subsidiary;
(xxi) knowingly or intentionally take any action that results or is reasonably likely to result in any of the representations or warranties of the Company hereunder being untrue in any material respect; or
(xxii) authorize any of, or compromise, settle commit or agree to settle take any Legal Proceedingof, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements the foregoing actions.
(c) The Company shall promptly advise Parent orally and in the ordinary course of business that involve only the payment of money damages not in excess of $500,000 individually or $2,000,000 in the aggregate, in any case without the imposition writing of any equitable relief on, change or the admission of wrongdoing by, Pivotal event that has or any of its Subsidiaries;
(m) change its financial or Tax accounting methods, principles or practices, except insofar as may could reasonably be expected to have been required by a change in GAAP or applicable Law;
(n) settle or compromise any material liability for Taxes or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liability; consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of a material amount of Taxes; grant any power of attorney with respect to material Taxes; enter into any Tax Sharing Agreement or any closing agreement or other similar agreement; or change any method of accounting for Tax purposes;Company Material Adverse Effect.
Appears in 2 contracts
Samples: Merger Agreement (Specialty Laboratories Inc), Merger Agreement (Ameripath Inc)
Conduct of Business. During (a) Conduct of Business by the period -------------------- -------------------------- Company. Except for matters set forth in the Company Disclosure Letter or -------- otherwise contemplated by this Agreement, from the date of this Agreement to the Effective Time or earlier termination of this Agreement, the Company shall, and shall cause each Company Subsidiary to, conduct its business in the usual and ordinary course consistent with past practice, except as required to comply with changes in Applicable Law occurring after the date hereof, and, to the extent consistent therewith, use all reasonable efforts to preserve intact its current business organization and keep available the services of its current officers and employees to maintain its goodwill and ongoing business. In addition, and without limiting the generality of the foregoing, except for matters set forth in the Company Disclosure Letter or otherwise contemplated by this Agreement, from the date of this Agreement to the Effective Time, except as consented to in writing in advance by VMware or as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) by this Agreement, Pivotal shall, and shall cause each of its Subsidiaries to, carry on its business in the ordinary course, including its development and sales efforts as currently contemplated, and use commercially reasonable efforts to (i) preserve intact its business organization, assets, rights and properties, (ii) keep available the services of its current officers, employees and consultants and (iii) preserve its goodwill and its relationships with customers, suppliers, licensors, licensees, distributors and others having material business dealings with it. In addition to and without limiting the generality of the foregoing, during the period from the date of this Agreement to the Effective Time, except (x) as set forth in section 5.1 of the Pivotal Disclosure Letter, (y) as specifically required by this Agreement or (z) as specifically required by applicable Law, Pivotal Company shall not, and shall not permit any Company Subsidiary to, do any of its Subsidiaries, the following without VMware’s the prior written consent (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), toParent:
(ai) (iA) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock or other equity interests, except for dividends by a wholly owned Subsidiary of Pivotal to Pivotal or any other wholly owned Subsidiary of Pivotal, (ii) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interestsstock, other than (A1) dividends and distributions by a direct or indirect wholly owned subsidiary of the withholding of Class A Shares Company to satisfy tax obligations its parent, (2) regular quarterly cash dividends with respect to awards granted pursuant to the Pivotal Stock Plans Company Common Stock, not in excess of $0.055 per share, with usual declaration, record and outstanding on the date of this Agreement or as permitted by this Agreement, payment dates and in accordance with their the Company's past dividend policy, (3) regular annual cash dividends, not in excess of $1.065 per share, payable on outstanding Company Preferred Stock in accordance with the current terms on thereof and (4) any dividend or distribution permitted by the date terms of this the Partnership Agreement and (as defined in Section 6.12(a)) or previously approved by the Board of Directors of the Partnership, (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii) split, combine, combine or reclassify or otherwise amend the terms of any of its capital stock or other equity 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 stock, or other equity interests;
(bC) issueexcept for the redemption of Company Preferred Stock as required by paragraph (C) of Section 8 of the Company Preferred Certificate of Designation by reason of this Agreement or pursuant to a request by Parent under Section 6.14, deliverpurchase, sell, grant, pledge redeem or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) acquire any shares of its capital stock or other equity interests of the Company or any Company Subsidiary or any other securities convertible into, exchangeable for or exercisable for any such shares or other equity interests, thereof or any rights, warrants or options to acquire, acquire any such shares or other equity interestssecurities;
(ii) issue, deliver, sell or grant (A) any shares of its capital stock, (B) any Voting Company Debt or other voting securities, (C) any securities convertible into or exchangeable for, or any stock appreciation rightsoptions, “warrants or rights to acquire, any such shares, Voting Company Debt, voting securities or convertible or exchangeable securities or (D) any "phantom” " stock, "phantom" stock rights, stock appreciation rights or stock-based performance units, rights to receive shares of capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof (other than (1) the issuance of Class A Shares Company Common Stock (and associated Company Rights) upon the exercise of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPP, in each case, that are Company Employee Stock Options outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with their present terms, (2) the issuance of up to an additional 2,500 Company Employee Stock Options, each of which shall have an exercise price not less than the fair market value of Company Common Stock on the date of grant, pursuant to the Company Stock Plans in accordance with their present terms as in effect on and the issuance of Company Common Stock (and associated Company Rights) upon the exercise of such date)Company Employee Stock Options and (3) the issuance of Junior Preferred Stock upon the exercise of Company Rights;
(ciii) amend or otherwise change, or authorize or propose to amend or otherwise change, its certificate of incorporation incorporation, by-laws or bylaws (other comparable charter or similar organizational documents);
(div) directly or indirectly except in the ordinary course consistent with past practice, acquire or agree to acquire (iA) by merging or consolidating with, or by purchasing a substantial equity interest in or a substantial portion of the assets of, making an investment in or loan or capital contribution to or in by any other manner, any equity interest in or business or any corporation, partnership, joint venture, association or other business organization or division thereof or (iiB) any assets that are otherwise material material, individually or in the aggregate, to Pivotal the Company and its the Company Subsidiaries, excepttaken as a whole;
(v) (A) grant to any officer or director of the Company or any Company Subsidiary any increase in compensation, in each case, for (1) capital expenditures which shall be subject to the limitations of clause (i) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes except in the ordinary course of business consistent with Pivotal’s investment management policyprior practice or to the extent required under employment agreements in effect as of the date hereof, and (B) grant to any employee, officer or director of the Company or any Company Subsidiary any increase in severance or termination pay, except to the extent required under any agreement in effect as of the case date hereof, (C) enter into any employment, consulting, indemnification, severance or termination agreement with any officer or director of clause the Company or any Company Subsidiary, (ii)D) establish, acquisitions adopt, enter into or amend in any material respect any collective bargaining agreement or Company Benefit Plan, except as may be required by Applicable Law in effect as of inventorythe date hereof, products (E) take any action to accelerate any rights or services benefits, or make any material determinations not in the ordinary course consistent with prior practice, under any collective bargaining agreement or Company Benefit Plan or (F) enter into any agreement described in clause (C) hereof with (1) any other employee of businessthe Company or any Company Subsidiary employed in the United States or Canada or (2) any such employee employed outside the United States and Canada except for agreements required by Applicable Law in the relevant jurisdiction; Table of Contentsprovided, however, that the Company shall be -------- ------- permitted to adopt the amendment to its Severance Pay Plan set forth in the Company Disclosure Letter;
(evi) directly make any change in financial accounting methods, principles or indirectly practices materially affecting the reported consolidated assets, liabilities or results of operations of the Company, except insofar as may have been required by a change in GAAP or by operation of Applicable Law;
(vii) sell, leaselease (as lessor), license, sell and leaseback, abandon, allow to lapse, mortgage license or otherwise encumber dispose of or subject to any Lien any properties or otherwise dispose assets, except sales of inventory and excess or obsolete assets or real property in whole the ordinary course consistent with past practice;
(viii) (A) incur any indebtedness for borrowed money or in part guarantee any such indebtedness of another person, issue or sell any debt securities or warrants or other rights to acquire any debt securities of the Company or any Company Subsidiary, guarantee any debt securities of another person, enter into any "keep well" or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of its material propertiesthe foregoing, assets or rights (including any material Pivotal Intellectual Property Registrations) or any interest therein, except, except for short-term borrowings incurred in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirationsthe ordinary course consistent with past practice, or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Out;
(f) adopt or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (iiB) make any loans, advances or capital contributions to, or investments in, any other Personperson, other than Pivotal to or in the Company or any direct or indirect wholly owned Subsidiary subsidiary of Pivotalthe Company or to or in the Partnership;
(iix) incur make or commit agree to incur make any new capital expenditure or authorization or commitment with respect thereto that expenditures (other than expenditures in the aggregate existing capital expenditure budget, a copy of which is attached to the Company Disclosure Letter) that, individually, is in excess of $5,000,000 or, in the aggregate, are in excess of $1,000,0009,000,000;
(jx) make any material Tax election, except in the ordinary course consistent with past practice or as required by to comply with changes in Applicable Law occurring after the date of this Agreement, or settle or compromise any judgment by a court of competent jurisdiction, material Tax liability or refund;
(ixi) (A) pay, discharge, settle discharge or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge or satisfaction satisfaction, in the ordinary course of business, (B) as required by consistent with past practice or in accordance with their terms as in effect on or the date terms of this Agreement Agreement, of claims, liabilities or obligations reflected or reserved against in in, or contemplated by, the most recent audited consolidated financial statements (or the notes thereto) of Pivotal the Company included in the Pivotal Filed Company SEC Documents filed prior to or incurred in the date hereof ordinary course consistent with past practice, (for amounts not B) cancel any material indebtedness (individually or in excess the aggregate) or waive any claims or rights of such reserves) substantial value or (C) incurred since waive the date of such financial statements benefits of, or agree to modify in any manner, any confidentiality, standstill or similar agreement to which the Company or any Company Subsidiary is a party, except, in the ordinary course case of businessthis clause (C), (ii) cancel any material Indebtedness owed to Pivotal or any the extent necessary to comply with the fiduciary obligations of its Subsidiariesthe Company Board, or (iii) waive, release, grant or transfer any right of material valueas determined in good faith by it after consultation with outside counsel;
(kxii) exercise any rights (ithe "Buy Rights") materially modify, materially amend, terminate, cancel, waive any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (ii) enter into any Contract that if in effect on the date hereof would be a Material Contract, other than customer contracts entered into in the ordinary course of business;
(l) commence any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal or any of its Subsidiaries), or compromise, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements in the ordinary course of business that involve only the payment of money damages not in excess of $500,000 individually or $2,000,000 in the aggregate, in any case without the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal or any of its Subsidiaries;
(m) change its financial or Tax accounting methods, principles or practices, except insofar as it may have been required by a change in GAAP or applicable Law;
(n) settle or compromise any material liability for Taxes or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liability; consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of a material amount of Taxes; grant any power of attorney with respect to material Taxes; enter into any Tax Sharing Agreement or any closing agreement or other similar agreement; or change any method of accounting for Tax purposes;under ---------- Section
Appears in 2 contracts
Samples: Agreement and Plan of Merger (Tj International Inc), Agreement and Plan of Merger (Weyerhaeuser Co)
Conduct of Business. (a) During the period from the date term of this Agreement to the Effective TimeAgreement, except as consented to in writing in advance by VMware or as otherwise expressly specifically required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) by this AgreementAgreement or permitted under subsection (b) of this Section 6.01, Pivotal shall, Target shall and shall cause each of its Subsidiaries to, to carry on its business their respective businesses in the ordinary course, including its development and sales efforts as currently contemplated, Ordinary Course of Business and use commercially all reasonable efforts to (i) preserve intact its their current business organizationorganizations, assets, rights and properties, (ii) keep available the services of its their current officers, officers and employees and consultants and (iii) preserve its goodwill and its their relationships consistent with past practice with desirable customers, suppliers, licensors, licensees, distributors and others having material business dealings with itthem to the end that their goodwill and ongoing businesses shall be unimpaired in all material respects at the Effective Time. In addition to and Except as expressly permitted or contemplated by the terms of this Agreement, without limiting the generality of the foregoing, during the period from the date of this Agreement to the Effective Time, except (x) as set forth in section 5.1 of the Pivotal Disclosure Letter, (y) as specifically required by this Agreement or (z) as specifically required by applicable Law, Pivotal Target shall not, and shall not permit any of its Subsidiaries, Subsidiaries to (without VMware’s Acq Corp's prior written consent (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall which consent may not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), to:):
(ai) (iA) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock stock, other than dividends and distributions by any direct or other equity interests, except for dividends by a indirect wholly owned Subsidiary of Pivotal Target to Pivotal or any other wholly owned Subsidiary of Pivotal, (ii) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, Parent and other than (A) the withholding declaration and payment of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding regular quarterly dividends on the date Common Stock in an amount not to exceed $.05 per share for each of this Agreement or as permitted by this AgreementTarget's fiscal quarters, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii) split, combine, combine or reclassify or otherwise amend the terms of any of its capital stock or other equity 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 (C) except as shall be required under currently existing terms of any stock-based benefit plan, purchase, redeem or otherwise acquire or amend any shares of capital stock of Target or any of its Subsidiaries or any other equity interestssecurities thereof or any rights, warrants, options to acquire or any securities convertible into or exchangeable for any such shares or other securities (other than (x) redemptions, purchases or other acquisitions required by applicable provisions under Gaming Laws and (y) issuances or redemptions of capital stock of wholly owned Subsidiaries occurring between Target and any of its wholly owned Subsidiaries or occurring between wholly owned Subsidiaries of Target);
(bii) issue, deliver, sell, grant, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) amend any shares of its capital stock or stock, any other equity interests voting securities or any securities convertible or exchangeable into, exchangeable for or exercisable for any such shares or other equity interests, or any rights, warrants or options to acquire, any such shares shares, voting securities or other equity interests, convertible or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive shares of capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof exchangeable securities (other than the issuance of Class A Shares Common Stock upon the exercise of Pivotal Options, the settlement employee stock options and contingent incentive plans (including with respect to contingent shares of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPP, in each case, that are Common Stock) outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with their terms as in effect on such datepresent terms);
(ciii) amend its Restated Articles of Incorporation, By-laws or otherwise change, other comparable charter or authorize or propose to amend or otherwise change, its certificate of incorporation or bylaws (or similar organizational documents);
(div) directly or indirectly take any action that would result in the failure to maintain the listing of Common Stock on the NYSE;
(v) develop, acquire or agree to develop or acquire (i) any projects, assets or lines of business, including without limitation by merging or consolidating with, or by purchasing a substantial equity interest in all or a substantial portion of the assets of, making an investment in or loan or capital contribution to or in by any other manner, any business or any corporation, partnership, joint venture, association or other business organization or division thereof thereof, or (ii) any assets that are otherwise material material, individually or in the aggregate, to Pivotal Target and its SubsidiariesSubsidiaries taken as a whole, except, in each case, for except (1) capital expenditures which shall be subject to the limitations of clause (i) below and (2x) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes inventory, furnishings and equipment in the ordinary course Ordinary Course of business Business or (y) expenditures consistent with Pivotal’s investment management policyTarget's current capital budget, and except as set forth in Schedule 6.01(a)(v) (the case of clause (ii"BUDGET"), acquisitions of inventory, products or services in the ordinary course of business; Table of Contents;
(evi) directly or indirectly sell, lease, license, sell and leasebackswap, abandon, allow to lapsebarter, mortgage or otherwise encumber or subject to any Lien or otherwise dispose of or prevent from becoming subject to a Lien any of its properties or assets, except transactions in whole the Ordinary Course of Business;
(vii) (A) other than (1) working capital borrowings in the Ordinary Course of Business, (2) projects approved prior to the date of this Agreement by the Board of Directors of Target as set forth in Schedule 6.01(a)(vii), to the extent permitted by Section 6.01(b), (3) specific projects at existing, operational facilities referred to in the Budget and (4) other incurrences of indebtedness which, in the aggregate, do not exceed $10.0 million, incur any indebtedness, forgive any debt obligations of any Person to Target or in part its Subsidiaries, issue or sell any debt securities or warrants or other rights to acquire any debt securities of Target or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any "keep well" or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of its material properties, assets the foregoing or rights (including any material Pivotal Intellectual Property RegistrationsB) other than (1) to Target or any interest therein, except, in each casedirect or indirect wholly owned Subsidiary of Target, (i2) salesadvances to employees, pledgessuppliers or customers in the Ordinary Course of Business, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected (3) projects approved prior to the Effective Time pursuant date of this Agreement by the Board of Directors of Target as set forth in Schedule 6.01(a)(vii), to existing Contracts that are not material to Pivotal and its Subsidiariesthe extent permitted by Section 6.01(b), taken as a whole and (ii4) Ordinary Course Licenses Out;
(f) adopt or enter into a plan of complete or partial liquidationspecific projects referred to in the Budget, dissolution, restructuring, recapitalization or other reorganization;
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, other than Pivotal or any direct or indirect wholly owned Subsidiary of Pivotal;
(iviii) incur settle any claim, action, or commit lawsuit relating to incur material Taxes pending as of the date hereof or arising on or after the date hereof, make any capital expenditure material Tax election, or authorization or commitment with respect thereto that amend any material Tax Return in the aggregate are in excess of $1,000,000any respect;
(j) except as required by any judgment by a court of competent jurisdiction, (iix) pay, discharge, settle or satisfy any material claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge discharge, settlement or satisfaction in the ordinary course Ordinary Course of business, (B) as required by Business or in accordance with their terms as in effect on the date of this Agreement of claims, liabilities or obligations reflected or reserved against in the most recent audited financial statements (Base Balance Sheet or the notes thereto) of Pivotal included incurred in the Pivotal SEC Documents filed prior to the date hereof (for amounts not in excess Ordinary Course of such reserves) or (C) incurred since the date of such financial statements Business, or, except in the ordinary course Ordinary Course of businessBusiness, (ii) cancel waive the benefits of, or agree to modify in any material Indebtedness owed manner, any confidentiality, standstill or similar agreement to Pivotal which Target or any of its Subsidiaries, or (iii) waive, release, grant or transfer any right of material valueSubsidiaries is a party;
(kx) make any change in the compensation payable or to become payable to any of its officers, directors, employees, agents or consultants (other than (i) materially modifygeneral increases in wages to employees who are not officers, materially amenddirectors or Affiliates in the Ordinary Course of Business and (ii) salary increases for officers other than Target's President pursuant to regular annual reviews in the Ordinary Course of Business and approved by Target's President pursuant to previously granted Board authority, terminatePROVIDED that no compensation described in the clause (ii) shall be in the form of capital stock of Target or any securities convertible or exchangeable into, cancelor any rights, waive warrants or options to acquire, such capital stock), or to Persons providing management services, enter into or amend any employment, severance, consulting, termination or other agreement or employee benefit plan or make any loans to any of its officers, directors, employees, Affiliates, agents or consultants or make any change in its existing borrowing or lending arrangements for or on behalf of any of such Persons pursuant to an employee benefit plan or otherwise;
(xi) pay or make any accrual or arrangement for payment of any pension, retirement allowance or other employee benefit pursuant to any existing plan, agreement or arrangement to any officer, director, employee or Affiliate or pay or agree to pay or make any accrual or arrangement for payment to any officers, directors, employees or Affiliates of Target of any amount relating to unused vacation days, except payments and accruals made in the Ordinary Course of Business; adopt or pay, grant, issue, accelerate or accrue salary or other payments or benefits pursuant to any pension, profit-sharing, bonus, extra compensation, incentive, deferred compensation, stock purchase, stock option, stock appreciation right, group insurance, severance pay, retirement or other employee benefit plan, agreement or arrangement, or any employment or consulting agreement with or for the benefit of any director, officer, employee, agent or consultant, whether past or present, other than as required under applicable law or the current terms of any plan or agreement identified in Schedule 4.10(a); or amend in any material right under respect any such existing plan, agreement or extend any Material Contract arrangement in a manner inconsistent with the foregoing;
(other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (iixii) enter into any Contract that if in effect on the date hereof would be a Material Contract, other than customer contracts entered into in the ordinary course of businesscollective bargaining agreement;
(lxiii) commence make any Legal Proceeding payments (other than a Legal Proceeding as a result regular compensation payable to officers and employees of a Legal Proceeding commenced against Pivotal Target in the Ordinary Course of Business), loans, advances or other distributions to, or enter into any transaction, agreement or arrangement with, any of its Subsidiaries)Target's Affiliates, officers, directors, stockholders or compromisetheir Affiliates, settle associates or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements family members or agreements in the ordinary course of business that involve only the payment of money damages not in excess of $500,000 individually do or $2,000,000 in the aggregate, in any case without the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal or enter into any of its Subsidiaries;
(m) change its financial the foregoing with respect to employees, agents or Tax accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law;
(n) settle or compromise any material liability for Taxes or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return consultants other than in the ordinary course Ordinary Course of business Business;
(xiv) except in the Ordinary Course of Business and on a basis consistent with past practice that would materially and adversely affect its Tax liability; consent except as otherwise permitted by this Agreement, modify, amend or terminate any contract or agreement set forth in the 1997 SEC Documents to any extension or waiver of the limitation period applicable to any claim or assessment in respect of a material amount of Taxes; grant any power of attorney with respect to material Taxes; enter into any Tax Sharing Agreement which Target or any closing agreement Subsidiary is a party or other similar agreementwaive, release or assign any material rights or claims; or
(xv) authorize any of, or change commit or agree to take any method of accounting for Tax purposes;of, the foregoing actions except as otherwise permitted by this Agreement.
Appears in 2 contracts
Samples: Merger Agreement (Harveys Acquisition Corp), Merger Agreement (Harveys Casino Resorts)
Conduct of Business. During the period from From the date hereof to the earlier of the Closing Date or the termination of this Agreement to the Effective TimeAgreement, except as consented to in writing in advance by VMware or as otherwise expressly contemplated, required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) permitted by this Agreement, Pivotal and except for matters set forth on Section 6.1 of the Company Disclosure Schedules, the Company shall, and shall cause each of its Subsidiaries to, carry on conduct its business and their respective businesses in the ordinary course, including its development and sales efforts as currently contemplated, Ordinary Course of Business in all material respects and use commercially reasonable efforts to (i) preserve intact the goodwill and organization of its business organization, assets, rights and properties, (ii) keep available the services of its current officers, employees and consultants and (iii) preserve its goodwill and its relationships with its customers, suppliers, licensorsemployees and other Persons having business relations with the Company and its Subsidiaries, licenseesexcept (i) as required by Law or a Governmental Authority of competent jurisdiction, distributors and others having material business dealings with itor (ii) to the extent Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld, delayed or conditioned). In addition to and without Without limiting the generality of the foregoing, during the period from the date of this Agreement to the Effective Time, foregoing and except (x) as set forth in section 5.1 of the Pivotal Disclosure Letterotherwise expressly contemplated or required by this Agreement, and (y) as specifically required by this Agreement or (z) as specifically required by applicable Lawfor matters set forth on Section 6.1 of the Company Disclosure Schedules, Pivotal the Company shall not, and shall not permit any of its Subsidiaries, without VMware’s prior written consent (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), Subsidiaries to:
(a) (i) declareenter into any contract out of the Ordinary Course of Business or restricting in any material respect the conduct of its business or amend, set aside or pay modify in any dividends onmaterial respect, waive any material rights under, or terminate any Major Contract;
(b) amend its articles of incorporation, bylaws or other organizational documents;
(c) make any loans to or investments in any Person;
(d) merge or consolidate with any Person;
(e) sell, purchase, lease or dispose of any property or assets (other distributions than in the Ordinary Course of Business);
(whether in cashf) (i)(A) issue, stock sell, or property) in respect of, any of its capital stock or other equity interests, except for dividends by a wholly owned Subsidiary of Pivotal to Pivotal or any other wholly owned Subsidiary of Pivotaltransfer, (iiB) purchaseredeem, redeem purchase or otherwise acquire shares of capital stock acquire, or other equity interests of Pivotal or its Subsidiaries or (C) grant any options, warrants, purchase rights, subscription rights, conversion rights, exchange rights, or other agreements or rights to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii) split, combine, reclassify purchase or otherwise amend the terms of any of its capital stock or other equity interests or issue or authorize the issuance of any other securities in respect ofacquire, in lieu of or in substitution for shares of its capital stock or other equity interests;
(b) issue, deliver, sell, grant, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) any shares of its capital stock or other equity interests or any securities convertible into, exchangeable (except for or exercisable for any such shares or other equity interests, or any rights, warrants or options to acquire, any such shares or other equity interests, or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive shares issuances of capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including Common Stock pursuant to Contracts exercises of Options outstanding as in effect on of the date hereof (other than the issuance of Class A Shares upon the exercise of Pivotal Optionshereof), the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPP, in each case, that are outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with their terms as in effect on such date);
(c) amend or otherwise change, or authorize or propose to amend or otherwise change, its certificate of incorporation or bylaws (or similar organizational documents);
(d) directly or indirectly acquire or agree to acquire (i) by merging or consolidating with, purchasing a substantial equity interest in or a substantial portion of the assets of, making an investment in or loan or capital contribution to or in any other manner, any corporation, partnership, association or other business organization or division thereof or (ii) grant any assets that are otherwise material to Pivotal and its Subsidiariesstock appreciation, exceptphantom stock, in each case, for (1) capital expenditures which shall be subject to the limitations of clause (i) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes in the ordinary course of business consistent with Pivotal’s investment management policy, and except in the case of clause (ii), acquisitions of inventory, products or services in the ordinary course of business; Table of Contents
(e) directly or indirectly sell, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien or otherwise dispose in whole or in part of any of its material properties, assets or rights (including any material Pivotal Intellectual Property Registrations) or any interest therein, except, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirationsprofit participation, or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Out;
(f) adopt or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganizationsimilar equity-based rights;
(g) fail to maintaineffect any recapitalization, reclassification, stock split or allow to lapse, or abandon, including by failure to pay the required fees like change in any jurisdiction, any material Pivotal Intellectual Property Registrationsits capitalization;
(h) declare or pay any dividends on or make other distributions in respect of any of its capital stock, except for (i) incurdividends or other distributions from a Subsidiary of the Company to the Company, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or and (ii) make dividends and other distributions not to exceed Three Million Five Hundred Thousand Dollars ($3,500,000), plus the amount of cash, if any, paid to the Company (or payable to the Company at any loanstime prior to the Effective Time) pursuant to exercises of Options after the date hereof and prior to the Effective Time, advances or capital contributions to, or investments in, any other Person, other than Pivotal or any direct or indirect wholly owned Subsidiary of Pivotalin the aggregate;
(i) incur pay any bonus or commit other similar payment (other than the Closing Bonuses) to incur any capital expenditure employee, consultant or authorization independent contractor of the Company or commitment with respect thereto that in the aggregate are in excess any of $1,000,000its Subsidiaries or to any Company Shareholder or holder of Options;
(j) except as required by execute any judgment by a court of competent jurisdictionguaranty, issue any debt, borrow any money or otherwise incur or create any Indebtedness (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge or satisfaction trade payables in the ordinary course Ordinary Course of businessBusiness);
(k) directly or indirectly engage in any transaction or contract with any officer, (B) as required by their terms as in effect on director, shareholder, trustee or beneficiary of any Company Shareholder, holder of Options, or Affiliate of the date of this Agreement of claims, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements in the ordinary course of business, (ii) cancel any material Indebtedness owed to Pivotal Company or any of its Subsidiaries, or (iii) waive, release, grant or transfer any right of material value;
(k) (i) materially modify, materially amend, terminate, cancel, waive any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products except in the ordinary course Ordinary Course of business) or (ii) enter into any Contract that if in effect on the date hereof would be a Material Contract, other than customer contracts entered into in the ordinary course of businessBusiness;
(l) commence create or permit any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal or Lien on any of its Subsidiaries)material assets, or compromise, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements in the ordinary course of business that involve only the payment of money damages not in excess of $500,000 individually or $2,000,000 in the aggregate, in any case without the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal or any of its Subsidiariesexcept for Permitted Exceptions;
(m) change its financial except as required under the terms of any Employee Benefit Plan or Tax accounting methodsother Major Contract existing as of the date hereof, principles increase the compensation, incentive arrangements or practicesother benefits of the Employees or enter into, except insofar as may have been required by a change in GAAP terminate or applicable Lawamend any Employee Benefit Plan;
(n) settle take or compromise omit to take any action that has or would reasonably be expected to have the effect of accelerating to pre-Closing periods sales to the trade or other customers that would in the Ordinary Course of Business occur after the Closing;
(o) delay or postpone the payment of any accounts payable or accelerate the collection of or discount any accounts receivable in a manner outside the Ordinary Course of Business;
(p) make any material liability for Taxes or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liability; consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of a material amount of Taxes; grant any power of attorney with respect to material Taxes; enter into any Tax Sharing Agreement or any closing agreement or other similar agreement; or change any method of accounting for Tax purposes;financial reporting, except for any such change after the date hereof required by reason of a change in or interpretation of GAAP; or
(q) commit, authorize, or agree to do any of the foregoing.
Appears in 2 contracts
Samples: Merger Agreement (Blackline, Inc.), Merger Agreement (Blackline, Inc.)
Conduct of Business. During the period from From the date of this Agreement to through the Effective Timeearlier of the Closing and the termination of this Agreement in accordance with its terms (the “Interim Period”), the Company shall, and shall cause its Subsidiaries to, except (i) as required by, or otherwise expressly permitted by, this Agreement, (ii) as required by applicable Law, (iii) as set forth on Section 7.01 of the Company Disclosure Letter, (iv) as consented to in writing in advance by VMware Acquiror (which consent shall not be unreasonably conditioned, withheld, delayed or as otherwise expressly denied) or (v) for actions that are reasonably required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) by this Agreementto comply with COVID-19 Measures, Pivotal shall, and shall cause each of its Subsidiaries to, carry on use reasonable best efforts to operate its business only in the ordinary course, including its development and sales efforts as currently contemplated, and use commercially reasonable efforts to (i) preserve intact its business organization, assets, rights and properties, (ii) keep available the services course of its current officers, employees and consultants and (iii) preserve its goodwill and its relationships with customers, suppliers, licensors, licensees, distributors and others having material business dealings with itbusiness. In addition to and without Without limiting the generality of the foregoing, during the period from the date of this Agreement to the Effective Time, except (xA) as set forth in section 5.1 of the Pivotal Disclosure Letter, (y) as specifically required by this Agreement or Agreement, (zB) as specifically required by applicable Law, Pivotal (C) as set forth on Section 7.01 of the Company Disclosure Letter or (D) as consented to in writing by Acquiror (which consent shall not be unreasonably conditioned, withheld, delayed or denied), the Company shall not, and the Company shall cause its Subsidiaries not permit any of its Subsidiariesto, without VMware’s prior written consent (which consent, in during the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), toInterim Period:
(a) change, waive or amend the Governing Documents of the Company;
(ib) make, declare, set aside aside, establish a record date for or pay any dividend or distribution, other than any dividends on, or make distributions from any other distributions (whether in cash, stock or property) in respect of, any of its capital stock or other equity interests, except for dividends by a wholly owned Subsidiary of Pivotal the Company to Pivotal the Company or any other wholly owned Subsidiary Subsidiaries of Pivotal, (ii) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii) split, combine, reclassify or otherwise amend the terms of any of its capital stock or other equity 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 other equity interestsCompany;
(bc) (i) issue, deliver, sell, granttransfer, pledge pledge, dispose of or otherwise encumber or subject to place any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Lawsa Permitted Lien) any shares of its capital stock or other equity interests or any securities convertible into, exchangeable for or exercisable for any such shares or other equity interestson, or enter into any rights, warrants or options Contract with respect to acquirethe voting of, any such shares or other equity interests, or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive shares of capital stock of VMware on a deferred basis or any other rights linked to the value of Class A Shares Equity Securities or Class B Shares, including pursuant to Contracts as in effect on the date hereof (other than the issuance of Class A Shares upon the exercise of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPP, in each case, that are outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with their terms as in effect on such date);
(c) amend or otherwise change, or authorize or propose to amend or otherwise change, its certificate of incorporation or bylaws (or similar organizational documents);
(d) directly or indirectly acquire or agree to acquire (i) by merging or consolidating with, purchasing a substantial equity interest in or a substantial portion voting securities of the assets of, making an investment in Company or loan or capital contribution to or in any other manner, any corporation, partnership, association or other business organization or division thereof of its Subsidiaries or (ii) issue, grant or agree to provide any assets that are otherwise material options, warrants or other rights to Pivotal and its Subsidiariespurchase or obtain any shares of capital stock or any other equity or equity-based or voting securities of the Company, except, in each any case, for (1A) capital expenditures which shall be subject the issuance of shares of Company Stock in connection with the exercise of Company Options or Company Warrants outstanding and exercisable as of the date hereof or otherwise issued in compliance with this Agreement, (B) the issue of any Company Options or Company Restricted Stock Unit Awards to any Company Employee hired after the limitations of clause (i) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes date hereof in the ordinary course of business consistent with Pivotal’s investment management policypast practice; provided that the total number of shares of Company Stock underlying such grants shall not exceed the amount set forth on Section 7.01(c)(ii)(B) of the Company Disclosure Letter, (C) the issue of promissory notes that convert into shares of Domesticated Acquiror Class A Common Stock upon the consummation of the Closing (“Company Convertible Notes”) having the terms and except subject to the maximum aggregate purchase price set forth on Section 7.01(c)(ii)(C) of the Company Disclosure Letter, (D) the entry by the Company into any joinder necessary to reflect any disposition, transfer or sale of shares of Company Stock solely by and among any holder of Company Stock, Company Options or Company Warrants as of the date hereof or any of their respective Affiliates and (E) any Permitted Repurchases, subject to the terms of the Company Holders Support Agreement and so long as such transfers would not result in, together with the Transactions, a change of control in respect of the case of Company or delay, impair or prevent the Transactions (any such financing referred to in clause (iiA) through (E), acquisitions of inventory, products or services in the ordinary course of business; Table of Contentsa “Permitted Interim Equity Financing”);
(ed) directly or indirectly sell, assign, transfer, convey, lease, exclusively license, sell and leaseback, abandon, allow to lapselapse or expire, mortgage or otherwise encumber or subject to or grant any Lien (other than Permitted Liens) on, or otherwise dispose in whole or in part of of, any of its material properties, assets or rights (including any material Pivotal Intellectual Property Registrations) or any interest therein, except, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior to properties of the Effective Time pursuant to existing Contracts that are not material to Pivotal Company and its Subsidiaries, taken as a whole whole, other than (i) the sale of goods and services to customers, or the sale or other disposition of assets or equipment deemed by the Company in its good faith reasonable business judgment to be obsolete or no longer material to the business of the Company and its Subsidiaries, taken as a whole, in each such case, in the ordinary course of business and (ii) Ordinary Course Licenses Outtransactions between the Company and any wholly owned Subsidiary of the Company or between wholly owned Subsidiaries of the Company;
(e) settle any pending or threatened Action (A) if such settlement would require payment by the Company and/or its Subsidiaries in an amount greater than $500,000 or (B) to the extent such settlement is adverse to the Company and/or its Subsidiaries and involves an Action brought by a Governmental Authority or alleged criminal wrongdoing;
(f) except as required by applicable Law or the terms of any existing Company Benefit Plans as in effect on the date hereof and set forth on Section 5.13(a) of the Company Disclosure Letter, (i) materially increase the compensation or benefits of any Company Employee except for increases in salary or hourly wage rates made in the ordinary course of business to Company Employees with annual base salary less than $250,000 or for ordinary course annual salary increases (and corresponding bonus opportunity increases) for 2021 for all employees that do not exceed, in the aggregate, 4% of the aggregate salary paid by the Company and its Subsidiaries in calendar year 2020, (ii) make any grant or promise of any severance, retention, incentive, bonus or termination payment to any Person, except (A) severance or termination payments in connection with the termination of any employee with an annual base salary less than $250,000 in the ordinary course of business or (B) bonus payments that do not exceed $100,000 for any individual, (iii) make any change in the key management structure of the Company or any of its Subsidiaries, including the hiring of additional officers or the termination (other than for “cause” or due to death or disability) of existing officers, (iv) hire any employee of the Company or its Subsidiaries or any other individual who is providing or will provide services to the Company or its Subsidiaries other than any employee with an annual base salary of less than $250,000 in the ordinary course of business that would not otherwise violate subsection (iii) or (v) except in the ordinary course of business and as would not otherwise violate subsections (i)-(iv), establish, adopt, enter into, amend in any material respect or terminate any Company Benefit Plan or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Benefit Plan if it were in existence as of the date of this Agreement;
(g) split, combine, subdivide, reclassify, redeem, purchase or otherwise acquire any shares of capital stock (or other equity interests) of the Company or any of its Subsidiaries or any securities or obligations convertible (whether currently convertible or convertible only after the passage of time or the occurrence of certain events) into or exchangeable for any shares of capital stock (or other equity interests) of the Company or any of its Subsidiaries, except for (i) acquisitions of shares of capital stock of the Company in connection with the “net-settlement” exercise of Company Options, (ii) the acquisition by the Company or any of its Subsidiaries of any shares of restricted stock (other than pursuant to subsection (i)) of the Company or its Subsidiaries in connection with the forfeiture or cancellation thereof, (iii) acquisitions of Company Stock in connection with the termination of the employment of any service provider of the Company or its Subsidiaries and (iv) transactions between the Company and any wholly owned Subsidiary of the Company or between wholly owned Subsidiaries of the Company (clauses (i)-(iv), “Permitted Repurchases”);
(h) make any change in its accounting principles or methods of accounting materially affecting the reported consolidated assets, liabilities or results of operations of the Company and its Subsidiaries, other than as may be required by applicable Law or GAAP;
(i) adopt or enter into a plan of of, or otherwise effect, a complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization;
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, other than Pivotal or any direct or indirect wholly owned Subsidiary of Pivotal;
(i) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto that in the aggregate are in excess of $1,000,000;
(j) except as required by any judgment by a court of competent jurisdiction, (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge or satisfaction in the ordinary course of business, (B) as required by their terms as in effect on the date of this Agreement of claims, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements in the ordinary course of business, (ii) cancel any material Indebtedness owed to Pivotal or any of its Subsidiaries, or (iii) waive, release, grant or transfer any right of material value;
(k) (i) materially modify, materially amend, terminate, cancel, waive any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (ii) enter into any Contract that if in effect on the date hereof would be a Material Contract, other than customer contracts entered into in the ordinary course of business;
(l) commence any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal or any of its Subsidiaries), or compromise, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements in the ordinary course of business that involve only the payment consistent with past practice, make, change or revoke any material Tax election, adopt or change (or request any Governmental Authority to change) any material accounting method or accounting period with respect to Taxes, file any amended material Tax Return, settle or compromise any material Tax liability or claim for a refund of money damages a material amount of Taxes, enter into any closing agreement or other binding written agreement with respect to any material Tax, or enter into any Tax sharing or Tax indemnification agreement or similar agreement (excluding commercial Contracts not in excess of $500,000 individually or $2,000,000 in the aggregateprimarily relating to Taxes), in any case without each case, to the imposition of any equitable relief onextent such action could reasonably be expected to have an adverse impact on Acquiror, or the admission of wrongdoing by, Pivotal Company or any of its Subsidiaries;
(mk) change its financial issue any debt securities or Tax accounting methodsotherwise incur any Indebtedness or assume, principles guarantee or practicesendorse or otherwise become responsible for the obligations of any other Person for Indebtedness (other than any Person that is a wholly owned subsidiary of the Company as of the date hereof or becomes a wholly owned Subsidiary after the date hereof in accordance with the terms of this Agreement), except insofar as may have been required by a change in GAAP or applicable Law;
(nx) settle or compromise any material liability for Taxes or surrender any material claim for a refund the issue of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change Company Convertible Notes having the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in terms and subject to the ordinary course of business and maximum aggregate purchase price set forth on a basis consistent with past practice that would materially and adversely affect its Tax liability; consent to any extension or waiver Section 7.01(c)(ii)(C) of the limitation period applicable Company Disclosure Letter and (y) any equipment financing entered into by the Company or its Subsidiaries so long as (A) the amount financed is equal to any claim the lesser of the fair market value or assessment in respect cost of a material the relevant equipment being financed and (B) the aggregate amount of Taxes; grant equipment financed under all such equipment financing does not exceed the amount set forth on Item 3 of Section 7.01(k)(y) of the Company Disclosure Letter (any power of attorney such financing referred to in clause (x) through (y), a “Permitted Interim Debt Financing” and together with respect to material Taxes; enter into any Tax Sharing Agreement or any closing agreement or other similar agreement; or change any method of accounting for Tax purposesPermitted Interim Equity Financing, a “Permitted Interim Financing”);
Appears in 2 contracts
Samples: Merger Agreement (Supernova Partners Acquisition Co II, Ltd.), Merger Agreement (Supernova Partners Acquisition Co II, Ltd.)
Conduct of Business. During the period from From the date of this Agreement to until the Effective TimeClosing Date (the “Interim Period”), except as consented to in writing in advance by VMware or as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) by this Agreement, Pivotal Company shall, and shall cause each of its Subsidiaries to, carry on its business in the ordinary course, including its development and sales efforts except as currently contemplated, and use commercially reasonable efforts to (i) preserve intact its business organization, assets, rights and properties, (ii) keep available the services of its current officers, employees and consultants and (iii) preserve its goodwill and its relationships with customers, suppliers, licensors, licensees, distributors and others having material business dealings with it. In addition to and without limiting the generality of the foregoing, during the period from the date of this Agreement to the Effective Time, except (x) as set forth in section 5.1 of the Pivotal Disclosure Letter, (y) as specifically expressly required by this Agreement or (z) Agreement, as specifically required consented to by applicable Law, Pivotal shall not, and shall not permit any of its Subsidiaries, without VMware’s prior written consent Tuatara in writing (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below consent shall not be unreasonably withheld, conditioned or delayed) or as required by Law, use commercially reasonable efforts to operate its business only in the Ordinary Course of Business, including using reasonable best efforts to (i) preserve the business of the Company, (ii) maintain the services of its officers and key employees, (iii) make payments of accounts payable and conduct collection of accounts receivable in the Ordinary Course of Business, (iv) timely pay all material Taxes that become due and payable and (v) maintain the existing business relationships of the Company. Without limiting the generality of the foregoing, except as set forth on Section 7.01 of the Company Disclosure Schedule, as required by Law (including any COVID-19 Measures) or as consented to by Tuatara in writing, during the Interim Period, the Company shall not, and in all other cases the Company shall be in VMware’s sole discretion), cause its Subsidiaries not to:
(a) (i) declarechange, set aside amend or pay any dividends onpropose to amend the certificate of incorporation, bylaws or make any other distributions (whether in cash, stock organizational documents of the Company or property) in respect of, any of its capital stock or other equity interests, except for dividends by a wholly owned Subsidiary of Pivotal to Pivotal or any other wholly owned Subsidiary of Pivotal, Subsidiaries (ii) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii) split, combine, reclassify or otherwise amend the terms of any of its capital stock or other equity 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 other equity interests);
(b) directly or indirectly adjust, split, combine, subdivide, issue, pledge, deliver, sellaward, grant, pledge redeem, purchase or otherwise encumber acquire or subject to sell, or authorize or propose the issuance, pledge, delivery, award, grant or sale (including the grant of any Lien (other than transfer restrictions encumbrances) of, any equity interests of general applicability as may be provided under the Securities Act Company or other applicable securities Laws) the equity interests of any shares of its capital stock or other equity interests or Subsidiaries, any securities convertible into, exchangeable for into or exercisable or exchangeable for any such shares or other equity interests, or any rights, warrants or options to acquire, any such shares or other equity interests, interests or any stock appreciation rightsphantom stock, “phantom” phantom stock rights, stock appreciation rights or stock-based performance units, rights to receive shares of capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof (units other than (i) grants of stock options or restricted stock units under the issuance Company Equity Plan, in the Ordinary Course of Class A Shares Business, to newly hired employees and (ii) issuances of Company Common Stock upon the exercise of Pivotal Company Options, the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPP, in each case, that are outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with their terms as in effect on such date)Agreement;
(c) amend make or otherwise change, declare any dividend or authorize distribution (whether in the form of cash or propose other property) that would cause the Company to amend or otherwise change, its certificate of incorporation or bylaws (or similar organizational documents)incur any Indebtedness;
(d) directly or indirectly acquire or agree to acquire other than in the Ordinary Course of Business, (i) modify, voluntarily terminate, permit to lapse, waive, or fail to enforce any material right or remedy under any Significant Contract, (ii) materially amend, extend or renew any Significant Contract or (iii) enter into any Significant Contract;
(e) except as required by merging the terms of the Company Benefit Plans in effect on the date hereof and as made available to the Tuatara Parties, (i) grant any severance, retention or consolidating termination pay to, or enter into or amend any severance, retention, termination, employment, consulting, bonus, change in control or severance agreement with, purchasing any current or former Service Provider other than severance granted in the Ordinary Course of Business to Service Providers, (ii) increase the compensation or benefits provided to any current or former Service Provider (other than increases in base compensation of not more than 25% to any individual employee in the Ordinary Course of Business (and any corresponding increases to bonus compensation to the extent such bonus compensation reflected as a substantial percentage of base compensation)), (iii) grant any equity interest or equity-based awards to, or discretionarily accelerate the vesting or payment of any such awards held by, any current or former Service Provider other than grants of stock options or restricted stock units, in the Ordinary Course of Business, to newly hired employees or as expressly contemplated by this Agreement and the transactions contemplated hereby, (iv) establish, adopt, enter into, amend, or terminate any Company Benefit Plan or Labor Contract or (v) (x) hire any employees with an annual base compensation of over $200,000 other than to (A) fill vacancies arising due to terminations of employment of employees following the date hereof or (B) fill an open position listed on Section 7.01(e) of the Company Disclosure Schedule or (y) terminate the employment of any employees other than for cause or in the Ordinary Course of Business in accordance with past practices;
(f) acquire (whether by merger or consolidation or the purchase of a substantial portion of the assets of, making an investment equity in or loan assets of or capital contribution to or in otherwise) any other manner, any corporation, partnership, association or other business organization or division thereof or (ii) any assets that are otherwise material to Pivotal and its Subsidiaries, except, in each case, for (1) capital expenditures which shall be subject to the limitations of clause (i) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes in the ordinary course of business consistent with Pivotal’s investment management policy, and except in the case of clause (ii), acquisitions of inventory, products or services in the ordinary course of business; Table of Contents
(e) directly or indirectly sell, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien or otherwise dispose in whole or in part of any of its material properties, assets or rights (including any material Pivotal Intellectual Property Registrations) or any interest therein, except, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Out;
(f) adopt or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganizationPerson;
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) repurchase, prepay, redeem or incur, create, assume or otherwise become liable forfor Indebtedness of over $1,000,000 in the aggregate, including by way of a guarantee or an issuance or sale of debt securities, or repayissue or sell options, cancelwarrants, forgive calls or prepayother rights to acquire any debt securities of the Company or any of its Subsidiaries, enter into any Indebtedness“keep well” or other Contract to maintain any financial statement or similar condition of another Person, or amendenter into any arrangement having the economic effect of any of the foregoing, modify or refinance any Indebtedness or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, Person other than Pivotal or any another direct or indirect wholly owned Subsidiary of Pivotalthe Company, (iii) cancel or forgive any debts or other amounts owed to the Company or any of its Subsidiaries or (iv) commit to do any of the foregoing;
(h) make any payment to a Related Party, other than (i) compensation to employees and service providers of the Company or any of its Subsidiaries in the Ordinary Course of Business in accordance with Section 7.01(e) or (ii) distributions and dividends allowed pursuant to Section 7.01(c);
(i) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto that in the aggregate are in excess of $1,000,000;
make (j) except as required by any judgment by a court of competent jurisdiction, (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge routine or satisfaction recurring income Tax elections made in the ordinary course of business, (B) as required by their terms as in effect on the date of this Agreement of claims, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof (for amounts not in excess of such reservesconsistent with past practice) or (C) incurred since the date of such financial statements in the ordinary course of businesschange any material Tax election, (ii) cancel take any material Indebtedness owed action that would reasonably be expected to Pivotal impair or any of its Subsidiariesimpede the Intended Tax Treatment, or (iii) waive, release, grant adopt or transfer any right of material value;
(k) (i) materially modify, materially amend, terminate, cancel, waive change any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (ii) enter into any Contract that if in effect on the date hereof would be a Material Contract, other than customer contracts entered into in the ordinary course of business;
(l) commence any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal or any of its Subsidiaries), or compromise, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements in the ordinary course of business that involve only the payment of money damages not in excess of $500,000 individually or $2,000,000 in the aggregate, in any case without the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal or any of its Subsidiaries;
(m) change its financial or Tax accounting methodsmethod, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law;
(niv) settle or compromise any material liability for Taxes Tax liability, (v) enter into any closing agreement within the meaning of Section 7121 of the Code (or surrender any material claim for a refund corresponding or similar provision of Taxes; state, local or foreign Tax Law), (vi) file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax electionReturn, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liability; (vii) consent to any extension or waiver of the limitation period applicable statute of limitations regarding any material amount of Taxes or (viii) settle or consent to any claim or assessment in respect of a relating to any material amount of Taxes; grant any power of attorney with respect to material Taxes; enter into any Tax Sharing Agreement or any closing agreement or other similar agreement; or change any method of accounting for Tax purposes;
Appears in 2 contracts
Samples: Agreement and Plan of Merger (Tuatara Capital Acquisition Corp), Agreement and Plan of Merger (Tuatara Capital Acquisition Corp)
Conduct of Business. (a) Conduct of Business by the Company. During the period from the date of this Agreement September 22, 1995, to the Effective TimeTime of the Mergers, except as consented to in writing in advance by VMware or as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) by this Agreement, Pivotal Company shall, and shall cause each of its the Company Subsidiaries to, carry on its business their respective businesses in the usual, regular and ordinary coursecourse in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations (including the Communications Act and the FCC's rules and regulations) and, including its development and sales efforts as currently contemplatedto the extent consistent therewith, and use commercially reasonable efforts to (i) preserve intact its their current business organizationorganizations, assets, rights and properties, (ii) keep available the services of its their current officers, officers and employees and consultants and (iii) preserve its goodwill and its their relationships with customers, suppliers, licensors, licensees, distributors and others having material business dealings with itthem. In addition to and without Without limiting the generality of the foregoing, during the period from the date of this Agreement September 22, 1995, to the Effective TimeTime of the Mergers, except for Approved Matters (xas defined below) as set forth in section 5.1 of the Pivotal Disclosure Letter, (y) as specifically required by this Agreement or (z) as specifically required by applicable Law, Pivotal Company shall not, and shall not permit any of its Subsidiaries, without VMware’s prior written consent (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), Company Subsidiaries to:
(ai) (ix) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock or other equity interests, except for dividends by a wholly owned Subsidiary of Pivotal to Pivotal or any other wholly owned Subsidiary of Pivotal, (ii) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interestsstock, other than (A) the withholding of Class A Shares dividends and distributions by a direct or indirect wholly owned Company Subsidiary to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans its parent and outstanding regular quarterly cash dividends on the date Company Capital Stock in an amount per share per quarter for each class of this Agreement or as permitted by this AgreementCompany Capital Stock not in excess of the amount paid for the quarter immediately preceding September 22, in accordance with their terms on the date of this Agreement and 1995, (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iiiy) split, combine, combine or reclassify or otherwise amend the terms of any of its capital stock or other equity 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 (z) purchase, redeem or otherwise acquire any shares of capital stock of the Company or any of the Company Subsidiaries or any other securities thereof or any rights, warrants or options to acquire any such shares or other equity interestssecurities (other than, in the case of this clause (z), for the redemption of New Line Debentures following a call by the Company for redemption of all the New Line Debentures);
(bii) issue, deliver, sell, grant, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) any shares of its capital stock or stock, any other equity interests voting securities or any securities convertible into, exchangeable for or exercisable for any such shares or other equity interests, or any rights, warrants or options to acquire, any such shares shares, voting securities or other equity interests, or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive shares of capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof convertible securities (other than (x) the issuance of shares of Class A Shares B Common Stock upon the exercise of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPP, in each case, that are Company Stock Options outstanding on the date of this Agreement September 22, 1995, and Made Available to VMware and otherwise in accordance with their terms then terms, (y) the issuance of shares of Class B Common Stock reserved for issuance as described in effect on such dateclauses (B)(I) and (B)(III) of Section 3.01(c) and (z) the grant of Company Stock Options permitted under Section 3.01(c)(i) and the issuance of shares of Class B Common Stock upon the exercise thereof);
(ciii) amend its articles of incorporation, by-laws or otherwise change, or authorize or propose to amend or otherwise change, its certificate of incorporation or bylaws (or similar other comparable organizational documents);
(div) directly or indirectly acquire or agree to acquire (ix) by merging or consolidating with, or by purchasing a substantial equity interest in or a substantial portion of the assets of, making an investment in or loan or capital contribution to or in by any other manner, any business or any corporation, partnership, limited liability company, joint venture, association or other business organization or division thereof or (iiy) any assets that are otherwise material to Pivotal and its Subsidiariesmaterial, exceptindividually or in the aggregate, in each case, for (1) capital expenditures which shall be subject to the limitations of clause (i) below Company and (2) purchases of marketable securities by or on behalf of Pivotal or its the Company Subsidiaries for cash management purposes in the ordinary course of business consistent with Pivotal’s investment management policy, and except in the case of clause (ii), acquisitions of inventory, products or services in the ordinary course of business; Table of Contentstaken as a whole;
(ev) directly or indirectly sell, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien or otherwise dispose in whole or in part of any of its material propertiesproperties or assets, assets or rights (including any material Pivotal Intellectual Property Registrations) or any interest therein, except, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or other than encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts and Liens that are not material to Pivotal and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Outincurred in the ordinary course of business;
(fvi) adopt (y) incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or warrants or other rights to acquire any debt securities of the Company or any of the Company Subsidiaries, guarantee any debt securities of another person, enter into any "keep well" or other agreement to maintain any financial statement condition of another person or enter into a plan any arrangement having the economic effect of complete or partial liquidationany of the foregoing, dissolution, restructuring, recapitalization or other reorganization;
(g) fail to maintainexcept for short-term borrowings incurred in the ordinary course of business consistent with past practice, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (iiz) make any loans, advances (other than advances to employees in the ordinary course of business consistent with prior practice) or capital contributions to, or investments in, any other Personperson, other than Pivotal to the Company or any direct or indirect wholly owned Subsidiary of PivotalCompany Subsidiary;
(ivii) incur make or commit agree to incur make any new capital expenditure or authorization or commitment with respect thereto that in the aggregate are in excess of $1,000,000expenditures;
(jviii) make any material Tax election or settle or compromise any material Tax liability or refund;
(ix) except as required by any judgment by a court of competent jurisdiction, (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge or satisfaction in the ordinary course of businessbusiness pursuant to employment agreements or Benefit Plans existing on September 22, (B) 1995, or as required by their terms as applicable laws, (A) increase the compensation payable or to become payable to its executive officers or
(x) whose current employment agreement is expiring, (y) contemporaneously with the hiring of such employee or (z) contemporaneously with the promotion of such employee, if, in effect on the date of this Agreement of claimseach case, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof (such employment agreement does not provide for amounts not salary in excess of such reserves) or (C) incurred since the date $200,000 in any year, does not have a term in excess of such financial statements in the ordinary course of business, (ii) cancel any material Indebtedness owed to Pivotal or any of its Subsidiaries, or (iii) waive, release, grant or transfer any right of material value;
(k) (i) materially modify, materially amend, terminate, cancel, waive any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (ii) enter into any Contract that if in effect on the date hereof would be a Material Contract, other than customer contracts five years and is entered into in the ordinary course of business;
business consistent with prior practice, in the case of clause (lx) commence any Legal Proceeding above, such new employment agreement is substantially similar to the expiring agreement and, in the case of clause (other than a Legal Proceeding as a result y) or (z) above, such employment agreement is substantially similar to current employment agreements for employees of a Legal Proceeding commenced against Pivotal or any of its Subsidiaries)the Company and the Company Subsidiaries at the applicable level, or compromise, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or (2) entering into talent agreements in the ordinary course of business that involve only its film production operations consistent with prior practice, or (3) making any severance payment, including any payment in settlement of litigation arising out of or resulting from the payment cessation of money damages not employment, to any employee or former employee (other than any executive officer or former executive officer of the Company) in excess of $500,000 individually or $2,000,000 in the aggregateamounts otherwise permitted under this clause (ix) if the excess amount of such payment does not, in any case without the imposition of any equitable relief oncase, or the admission of wrongdoing by, Pivotal or any of its Subsidiariesexceed $50,000;
(m) change its financial or Tax accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law;
(n) settle or compromise any material liability for Taxes or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liability; consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of a material amount of Taxes; grant any power of attorney with respect to material Taxes; enter into any Tax Sharing Agreement or any closing agreement or other similar agreement; or change any method of accounting for Tax purposes;
Appears in 2 contracts
Samples: Agreement and Plan of Merger (Time Warner Inc), Agreement and Plan of Merger (Turner Broadcasting System Inc)
Conduct of Business. (a) Conduct of Business by the Company. During the period from the date of this Agreement to the Effective Time, except as set forth in Section 4.01(a) of the Company Disclosure Schedule or as consented to in writing in advance by VMware Parent or as otherwise expressly permitted or required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) by this Agreement, Pivotal the Company shall, and shall cause each of its Subsidiaries to, carry on its business in the ordinary coursecourse consistent with past practice prior to the Closing and, including its development and sales efforts as currently contemplatedto the extent consistent therewith, and use all commercially reasonable efforts to (i) preserve intact its current business organizationorganizations, assets, rights and properties, (ii) keep available the services of its current officers, employees and consultants and (iii) preserve its goodwill and its relationships with customers, suppliers, licensors, licensees, distributors and others having material business dealings with it. In addition to and without limiting the generality of the foregoing, during the period from the date of this Agreement to the Effective Time, except (x) as otherwise set forth in section 5.1 Section 4.01(a) of the Pivotal Company Disclosure LetterSchedule or as otherwise permitted or required pursuant to this Agreement, (y) as specifically required by this Agreement or (z) as specifically required by applicable Law, Pivotal the Company shall not, and shall not permit any of its SubsidiariesSubsidiaries to, without VMware’s Parent's prior written consent (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), to:
(ai) (ix) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock stock, other than (1) cash dividends payable by the Company in respect of shares of Company Common Stock consistent with past practice and not exceeding $0.10 per share of Company Common Stock per fiscal quarter, (2) dividends and distributions in connection with the Rights Agreement and (3) dividends or other equity interests, except for dividends distributions by a direct or indirect wholly owned Subsidiary of Pivotal the Company to Pivotal or any other wholly owned Subsidiary of Pivotalits shareholders, (ii) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iiiy) split, combine, combine or reclassify or otherwise amend the terms of any of its capital stock or other equity 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 (z) purchase, redeem or otherwise acquire any shares of its capital stock or any other equity interestssecurities thereof or any rights, warrants or options to acquire any such shares or other securities, except for purchases, redemptions or other acquisitions of capital stock or other securities (1) required by the terms of the Company Stock Plans or the ESPP or (2) required by the terms of any plans, arrangements or Contracts existing on the date hereof between the Company or any of its Subsidiaries and any director or employee of the Company or any of its Subsidiaries (to the extent complete and accurate copies of which have been heretofore delivered to Parent);
(bii) issue, deliver, sell, grant, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) any shares of its capital stock or stock, any other equity interests voting securities or any securities convertible into, exchangeable for or exercisable for any such shares or other equity interests, or any rights, warrants or options to acquire, any such shares shares, voting securities or other equity interestsconvertible securities, or any stock appreciation rights"phantom" stock, “"phantom” " stock rights, stock appreciation rights or stock based performance units, rights to receive shares of capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof (other than (x) the issuance of Class A Shares shares of Company Common Stock upon the exercise of Pivotal Options, the settlement of Pivotal RSUs Company Stock Options or the exercise of purchase rights under the Pivotal ESPPin connection with Company Stock Based Awards, in each case, that are outstanding on the date of this Agreement and Made Available to VMware and otherwise case in accordance with their terms as in effect on such datethe date hereof, and (y) the issuance of Company Rights and shares of the Company's capital stock pursuant to the Company Rights or the Rights Agreement);
(ciii) amend (x) the Company Articles or otherwise changethe Company By-laws or other comparable charter or organizational documents of any of the Company's Subsidiaries or (y) the Indenture dated as of January 18, 1996 between the Company and Citibank, N.A., with respect to the 6.15% Senior Unsecured Notes due February 15, 2006 of the Company (the "Company Notes"), in each case except as may be required by applicable Law or authorize the rules and regulations of the SEC or propose to amend or otherwise change, its certificate of incorporation or bylaws (or similar organizational documents)the NYSE;
(div) directly or indirectly acquire or agree to acquire (ix) by merging or consolidating with, by purchasing a substantial equity interest in or a substantial portion of the assets of, by making an investment in or loan or capital contribution to to, or in by any other manner, any corporationperson or division, partnership, association business or other business organization or division thereof equity interest of any person or (iiy) any assets that are otherwise material to Pivotal and its Subsidiariesasset or assets, except, in each case, except for (1) capital expenditures expenditures, which shall be subject to the limitations of clause (ivii) below and below, (2) purchases of marketable securities by components, raw materials or on behalf of Pivotal or its Subsidiaries for cash management purposes supplies in the ordinary course of business consistent with Pivotal’s investment management policypast practice and (3) acquisitions of material intellectual property rights in respect of cross-licenses permitted in connection with the discharge, settlement or satisfaction of claims and except in the case of litigation under clause (ii), acquisitions of inventory, products or services in the ordinary course of business; Table of Contentsviii) below;
(ev) directly or indirectly (x) sell, lease, license, mortgage, sell and leaseback, abandon, allow to lapse, mortgage leaseback or otherwise encumber or subject to any Lien or otherwise dispose in whole or in part of any of its material properties, properties or other material assets or rights any interests therein (including any material Pivotal securitizations), except for (1) sales of inventory and used equipment in the ordinary course of business consistent with past practice and (2) licenses of Intellectual Property RegistrationsRights permitted in connection with the discharge, settlement or satisfaction of claims and litigation under clause (viii) or any interest therein, except, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirationsbelow, or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts (y) enter into, modify or amend any lease of material property, except for modifications or amendments that are not material materially adverse to Pivotal the Company and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Outwhole;
(fvi) adopt (x) incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, 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, guarantee any debt securities of another person, enter into any "keep well" or other Contract to maintain any financial statement condition of another person or enter into a plan any arrangement having the economic effect of complete any of the foregoing (other than short-term borrowings in the ordinary course of business consistent with past practice under the Company's commercial paper program, in an aggregate amount not to exceed $800,000,000 at any time outstanding) or partial liquidation(y) make any loans or advances to any other person, dissolutionother than to employees in respect of travel expenses in the ordinary course of business consistent with past practice, restructuring, recapitalization or other reorganizationwhich would result in the aggregate principal amount of all of the outstanding foregoing loans and advances of the Company and its Subsidiaries exceeding $25,000,000;
(gvii) fail to maintain, make any new capital expenditure or allow to lapse, or abandon, including by failure to pay expenditures exceeding the required fees amounts set forth in any jurisdiction, any material Pivotal Intellectual Property RegistrationsSection 4.01(a)(vii) of the Company Disclosure Schedule;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, other than Pivotal or any direct or indirect wholly owned Subsidiary of Pivotal;
(i) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto that in the aggregate are in excess of $1,000,000;
(jviii) except as required by Law or any judgment by a court of competent jurisdiction, (iv) pay, discharge, settle or satisfy any material claims, liabilities liabilities, obligations or obligations litigation (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge discharge, settlement or satisfaction in the ordinary course of businessbusiness consistent with past practice or in accordance with their terms, (B) as required by their terms as in effect on the date of this Agreement of claimsliabilities disclosed, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of Pivotal the Company included in the Pivotal Filed Company SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements in the ordinary course of businessbusiness consistent with past practice, (iiw) cancel any material Indebtedness owed indebtedness, (x) waive or assign any claims or rights of material value, (y) waive any benefits of, or agree to Pivotal modify in any respect, or, subject to the terms hereof, knowingly fail to enforce, or consent to any matter with respect to which consent is required under, any standstill or similar Contract to which the Company or any of its SubsidiariesSubsidiaries is a party or (z) waive any material benefits of, or (iii) waiveagree to modify in any material respect, releaseor, grant subject to the terms hereof, knowingly fail to enforce in any material respect, or transfer consent to any right matter with respect to which consent is required under, any material confidentiality or similar Contract to which the Company or any of material valueits Subsidiaries is a party;
(kix) enter into (i1) materially modify, materially amend, terminate, cancel, waive any material right under or extend any Material Contract (other than renewals that would be of Contracts with customers of Pivotal Products a type referred to in the ordinary course of businessSection 3.01(i)(2)(A) or (ii2) any other material Contract that would be of a type referred to in Section 3.01(i)(2)(B) or (C) and, in the case of this clause (2), that (A) would reasonably be expected to impair in any material respect the ability of the Company and its Subsidiaries to conduct their business as currently conducted or (B) would reasonably be expected to have a material adverse effect on the reasonably expected benefits of the Merger to Parent;
(x) enter into, modify, amend or terminate any Contract or waive, release or assign any material rights or claims thereunder, which if so entered into, modified, amended, terminated, waived, released or assigned would reasonably be expected to (A) have a Material Adverse Effect, (B) impair in any material respect the ability of the Company to perform its obligations under this Agreement or (C) prevent or materially impede, interfere with, hinder or delay the consummation of the transactions contemplated by this Agreement;
(xi) enter into any material Contract that if to the extent consummation of the transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement could reasonably be expected to conflict with, or result in effect on a violation or breach of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of, or result in, termination, cancelation or acceleration of any obligation or to the date hereof would be loss of a Material Contractbenefit under, other than customer contracts entered into or result in the ordinary course creation of business;
(l) commence any Legal Proceeding (Lien in or upon any of the properties or other than a Legal Proceeding as a result assets of a Legal Proceeding commenced against Pivotal the Company or any of its SubsidiariesSubsidiaries under, or require Parent to license or transfer any of its Intellectual Property Rights or other material assets under, or give rise to any increased, additional, accelerated, or guaranteed right or entitlements of any third party under, or result in any material alteration of, any provision of such Contract;
(xii) except as required to ensure that any Company Benefit Plan or Company Benefit Agreement is not then out of compliance with applicable Law or to comply with any Company Benefit Plan, Company Benefit Agreement or other Contract entered into prior to the date hereof (to the extent complete and accurate copies of which have been heretofore delivered to Parent), (A) adopt, enter into, terminate or compromiseamend (I) any collective bargaining Contract or Company Benefit Plan or (II) any Company Benefit Agreement or other Contract, settle plan or agree to settle policy involving the Company or any Legal Proceedingof its Subsidiaries and Key Personnel, (B) increase in any manner the compensation, bonus or fringe or other than Transaction Litigation which is subject to section 5.7)benefits of, compromisesor pay any discretionary bonus of any kind or amount whatsoever to, settlements any current or agreements former director, officer, employee or consultant, except in the ordinary course of business that involve only consistent with past practice to employees of the payment of money damages not in excess of $500,000 individually Company or $2,000,000 its Subsidiaries other than Key Personnel, (C) grant or pay any severance or termination pay, except for severance or termination pay granted or paid in the aggregateordinary course of business consistent with past practice, to, or increase in any case without material manner the imposition severance or termination pay of, any current or former director, officer, employee or consultant of any equitable relief on, or the admission of wrongdoing by, Pivotal Company or any of its SubsidiariesSubsidiaries other than Key Personnel, (D) remove any existing restrictions in any Company Benefit Agreements, Company Benefit Plans or awards made thereunder, (E) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan or Company Benefit Agreement, (F) take any action to accelerate the vesting or payment of any compensation or benefit under any Company Benefit Plan or Company Benefit Agreement or awards made thereunder or (G) materially change any actuarial or other assumption used to calculate funding obligations with respect to any Company Pension Plan or change the manner in which contributions to any Company Pension Plan are made or the basis on which such contributions are determined;
(mxiii) except as required by GAAP, revalue any material assets of the Company or any of its Subsidiaries or make any change its financial or Tax in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law;; or
(nxiv) settle or compromise authorize any material liability for Taxes or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax electionof, or change commit, resolve, propose or agree to take any of, the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liability; consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of a material amount of Taxes; grant any power of attorney with respect to material Taxes; enter into any Tax Sharing Agreement or any closing agreement or other similar agreement; or change any method of accounting for Tax purposes;foregoing actions.
Appears in 2 contracts
Samples: Agreement and Plan of Merger (Guidant Corp), Merger Agreement (Guidant Corp)
Conduct of Business. During (a) Except as set forth in Section 6.01 of the period from the date of Company Disclosure Letter, as expressly provided by this Agreement to the Effective TimeAgreement, except as required by Law or consented to in writing in advance by VMware Parent (such consent not to be unreasonably withheld, conditioned or as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) by this Agreement, Pivotal shall, and shall cause each of its Subsidiaries to, carry on its business in the ordinary course, including its development and sales efforts as currently contemplated, and use commercially reasonable efforts to (i) preserve intact its business organization, assets, rights and properties, (ii) keep available the services of its current officers, employees and consultants and (iii) preserve its goodwill and its relationships with customers, suppliers, licensors, licensees, distributors and others having material business dealings with it. In addition to and without limiting the generality of the foregoingdelayed), during the period from the date of this Agreement to the Effective Time, except the Company shall, and shall cause each of its Subsidiaries to, (x) carry on its business in the Ordinary Course of Business, (y) use reasonable best efforts to preserve substantially intact its current business organization and to preserve its relationships with significant Franchisees, key employees, customers, suppliers, licensors, licensees, distributors, wholesalers, lessors and others having significant business dealings with the Company or any of its Subsidiaries and (z) comply in all material respects with applicable Law, in each case in a manner consistent with past practice. Without limiting the generality of the foregoing, except as set forth in section 5.1 Section 6.01 of the Pivotal Company Disclosure Letter, (y) as specifically expressly required by (or expressly permitted under Section 6.02 and Article IX of) this Agreement, required by Law or consented to in writing by Parent (such consent not to be unreasonably withheld, conditioned or delayed), during the period from the date of this Agreement or (z) as specifically required by applicable Lawto the Effective Time, Pivotal the Company shall not, and shall not permit any of its Subsidiaries, without VMware’s prior written consent (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), Subsidiaries to:
(a) (i) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock or set any record date therefor, other equity interests, except for than dividends or distributions by a direct or indirect wholly owned Subsidiary of Pivotal the Company to Pivotal or any other wholly owned Subsidiary of Pivotal, its parent;
(ii) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii) split, combine, combine or reclassify or otherwise amend the terms of any of its capital stock or other equity 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 other equity interestsstock;
(biii) repurchase, redeem or otherwise acquire any shares of its capital stock or any options, warrants or other rights to acquire any such shares, other than (A) the acquisition by the Company of shares of Company Common Stock in connection with the surrender of shares of Company Common Stock by holders of Company Stock Options in order to pay the exercise price of the Company Stock Options, (B) the withholding of shares of Company Common Stock to satisfy Tax obligations with respect to awards granted pursuant to the Company Stock Plans, (C) the acquisition by the Company of Company Stock Options, Company RSUs, Company DSUs, Company PSUs and Company Restricted Stock Awards in connection with the forfeiture of such awards, and (D) the acquisition by the trustee of the Company 401(k) Plan of shares of Company Common Stock in order to satisfy participant elections under the Company 401(k) Plan;
(iv) issue, deliver, sell, grant, pledge deliver or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) sell any shares of its capital stock or other voting securities or equity interests, any securities convertible or exchangeable into any such shares, voting securities or equity interests, any options, warrants or other rights to acquire any such shares, voting securities, equity interests or any securities convertible into, or exchangeable for or exercisable for any such shares or other equity interests, or any rights, warrants or options to acquiresecurities, any such shares or other equity interests, or any stock appreciation rights, “phantom” stock rights, stock-based performance units, any Voting Company Debt or any other rights that give any person the right to receive shares any economic interest of capital stock of VMware on a deferred basis or other rights linked nature accruing to the value holders of Class A Shares or Class B SharesCompany Common Stock, including pursuant to Contracts as in effect on the date hereof (other than the issuance of Class A Shares (A) upon the exercise of Pivotal Options, the or settlement of Pivotal RSUs or the exercise of purchase rights awards under the Pivotal ESPP, in each case, that are Company Stock Plans outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with their terms present terms, and (B) as required to comply with any Company Benefit Plan or Company Benefit Agreement as in effect on such date)the date of this Agreement;
(cv) amend the Company Articles of Incorporation or otherwise change, the Company By-Laws or authorize or propose to amend or otherwise change, its certificate the comparable organizational documents of incorporation or bylaws (or similar organizational documents);
(d) directly or indirectly acquire or agree to acquire (i) by merging or consolidating with, purchasing a substantial equity interest in or a substantial portion any Subsidiary of the assets of, making an investment in or loan or capital contribution to or in any other manner, any corporation, partnership, association or other business organization or division thereof or (ii) any assets that are otherwise material to Pivotal and its Subsidiaries, exceptCompany, in each case, for whether by merger, consolidation or otherwise;
(1vi) capital expenditures which shall be subject acquire, directly or indirectly, whether by purchase, merger, consolidation or acquisition of stock or assets or otherwise, any assets, real property, securities, properties, interests, or businesses or make any investment (whether by purchase of stock or securities, contributions to the limitations capital, loans to, or property transfers), in each case, other than acquisitions of clause (i) below raw materials, supplies, equipment, inventory and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes third party software in the ordinary course Ordinary Course of business consistent with Pivotal’s investment management policy, Business (it being understood and except agreed that the acquisition of all or substantially all of the assets of any person is not in the case Ordinary Course of clause (iiBusiness), acquisitions of inventory, products or services in the ordinary course of business; Table of Contents;
(evii) directly or indirectly sell, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien abandon or otherwise dispose of any of, or omit to take any action necessary to maintain or renew, its properties or assets (including capital stock of any Subsidiary of the Company), other than (A) sales or other dispositions of (x) inventory in whole the Ordinary Course of Business or (y) equipment or Intellectual Property that is no longer used or useful in part the operations of the Company or any of its material propertiesSubsidiaries and (B) the non-exclusive licensing or sublicensing (excluding Specified Franchise Agreements and Contracts containing Company Noncompete Restrictions or granting Exclusive Rights) of Intellectual Property in the Ordinary Course of Business;
(viii) (A) incur any indebtedness for borrowed money, assets issue or sell any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any such indebtedness or any debt securities of another person or enter into any “keep well” or other agreement to maintain any financial statement condition of another person (collectively, “Indebtedness”), other than (1) Indebtedness incurred, assumed or otherwise entered into in the Ordinary Course of Business (including any material Pivotal Intellectual Property Registrationsborrowings under the Company’s existing credit facilities and in respect of letters of credit) and in no event in excess of $1,000,000 in the aggregate and (2) intercompany Indebtedness or (B) make any interest thereinloans or capital contributions to, exceptor investments in, any other person, other than to any Subsidiary of the Company;
(ix) except (A) as reasonably required by applicable Law, (B) as required pursuant to the terms of any Company Benefit Plan or Company Benefit Agreement or other written agreement disclosed to Parent in the Company Disclosure Letter, in each casecase in effect on the date of this Agreement or (C) as otherwise expressly permitted by this Agreement, (i1) salesincrease the compensation, pledgesseverance or other benefits payable or that could become payable by the Company or any of its Subsidiaries to directors, dispositionsofficers or employees, transfers(2) establish, abandonmentsadopt, leasesenter into, licensesamend or modify in any way any collective bargaining agreement or Company Benefit Plan or Company Benefit Agreement, lapses(3) take any action to accelerate any rights or benefits under any Company Benefit Plan or Company Benefit Agreement, expirations(4) grant, amend or modify any equity or equity-based awards, or encumbrances required (5) hire any officer, employee, independent contractor or consultant, other than in the Ordinary Course of Business with respect to be effected prior to any such person who (x) has annual base compensation of less than $200,000 and (y) is not a vice president or more senior employee of the Effective Time pursuant to existing Contracts that are not material to Pivotal and Company or any of its Subsidiaries;
(x) settle any claim or Litigation, in each case made or pending against the Company or any of its Subsidiaries, taken as a whole other than (A) the settlement of claims or Litigation in the Ordinary Course of Business that require payments by the Company or any of its Subsidiaries (net of insurance proceeds) in an amount not to exceed, individually or in the aggregate, $1,000,000 and (iiB) Ordinary Course Licenses Outthe settlement of claims or Litigation disclosed, reflected or reserved against in the most recent financial statements (or the notes thereto) of the Company included in the Filed SEC Documents for an amount not materially in excess of the amount so disclosed, reflected or reserved; provided, however, that the foregoing clauses (A) and (B) shall not permit the Company or any of its Subsidiaries to settle any claim or Litigation (x) that would involve injunctive or equitable relief, impose any restrictions or changes on the business or operations of the Company or any of its Subsidiaries, involve any admission of any wrongdoing by the Company or any of its Subsidiaries, or involve any license, cross license or similar arrangement with respect to material Intellectual Property owned by the Company or any of its Subsidiaries or (y) for which such settlement is not permitted pursuant to Section 7.03(f).
(xi) make any material change in accounting methods, principles or practices by the Company or any of its Subsidiaries materially affecting the consolidated assets, liabilities or results of operations of the Company, except as required (A) by GAAP, including pursuant to standards, guidelines and interpretations of the Financial Accounting Standards Board or any similar organization, or (B) by Law, including Regulation S-X under the Securities Act;
(fxii) adopt or enter into a plan of merger, consolidation, complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganizationreorganization of the Company or any of its Subsidiaries (other than reorganizations solely among wholly owned Subsidiaries of the Company);
(gxiii) fail make, change, revoke or rescind any material election relating to maintainTaxes (including any “check-the-box” election pursuant to Treasury Regulations Section 301.7701-3), make any material amendment with respect to any material Tax Return, settle or compromise any material Tax liability for an amount that exceeds the amount disclosed, reflected or reserved against in the financial statements contained in the Filed SEC Documents, request any rulings from or the execution of any closing agreement with any Governmental Authority (except in connection with a settlement of a Tax liability for an amount that does not exceed the amount disclosed, reflected or reserved against in the financial statements contained in the Filed SEC Documents), surrender any right to claim a material Tax refund, change an annual accounting period for Tax purposes, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, change any material Pivotal Intellectual Property Registrationsaccounting method for Tax purposes, except, in each case, for actions taken in the Ordinary Course of Business;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (iixiv) make any loans, advances or capital contributions to, or investments in, any other Person, other than Pivotal or any direct or indirect wholly owned Subsidiary of Pivotal;
(i) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto that in the aggregate are in excess of $1,000,000;
(j) except as required by any judgment by a court of competent jurisdiction, (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise)expenditures, other than (A) the payment, discharge or satisfaction maintenance capital expenditures made in the ordinary course Ordinary Course of business, Business and in accordance with the budget provided prior to the date hereof by the Company to Parent and (B) as required by their terms as any other capital expenditures in effect an amount not to exceed, individually or in the aggregate, $1,000,000;
(xv) (A) terminate, amend, modify or waive rights or claims under any Specified Contract or any Contract entered into on or after the date of this Agreement of claims, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed that would have been considered a Specified Contract if it had been entered into prior to the date hereof of this Agreement (for amounts not in excess of such reserves“New Specified Contracts”) or (C) incurred since the date of such financial statements in the ordinary course of business, (ii) cancel any material Indebtedness owed to Pivotal or any of its Subsidiaries, or (iii) waive, release, grant or transfer any right of material value;
(k) (i) materially modify, materially amend, terminate, cancel, waive any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (iiB) enter into (x) any New Specified Contract other than New Specified Contracts of the type described in Sections 4.09(a)(iii) and 4.09(a)(vii) (provided that in no event shall the Company or its Subsidiaries enter into any Contracts containing Company Noncompete Restrictions or granting Exclusivity Rights or any Specified Franchise Agreements) in the Ordinary Course of Business, (y) any Contract that if provides for the lease, sublease or purchase of real property or (z) any Contract that contains a change in effect on control or similar provision in favor of the date hereof other party or parties thereto that would be require a Material Contract, material payment to or would give rise to any material rights (including termination rights) of such other than customer contracts entered into party or parties in connection with the ordinary course consummation of business;
the Offer or the Merger (lincluding in combination with any other event or circumstance) commence any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal or any subsequent change in control of its Subsidiaries), or compromise, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements in the ordinary course of business that involve only the payment of money damages not in excess of $500,000 individually or $2,000,000 in the aggregate, in any case without the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal Company or any of its Subsidiaries;
(mxvi) make any change to the terms of the Company’s or any of its financial Subsidiaries’ policies or Tax accounting methodsprocedures with respect to its relationships with any of its Franchisees, principles including (A) any change to the terms of policies relating to Franchisee rent, royalty or practicesadvertising funds, except insofar as may have been required (B) any new program or plan, or any modification to any existing program or plan providing any franchisee incentives or franchisee economic assistance, (C) any commitment to provide assistance with any single restaurant remodel to be completed later than one (1) year following the date of the applicable commitment letter or in the aggregate for such single restaurant resulting in expenditures by the Company and its Subsidiaries in excess of fifty percent (50%) of the “total expenditure” for any such single remodel (and for this purpose “total expenditure” shall mean the average total expenditure for a change in GAAP remodel of the type of restaurant subject to the commitment for the 12 months prior to the date, increased by 10%) or applicable Law(D) requiring, issuing or suggesting any system-wide or regional mandates relating to equipment, hardware or software;
(nxvii) settle open any restaurant in a country where the Company or compromise any material liability for Taxes Subsidiary does not currently have an owned or surrender franchised restaurant or otherwise engage in any material claim for a refund other operations in any country in which the Company or any Subsidiary does not currently conduct other operations;
(xviii) commence any new line of Taxesbusiness; file or
(xix) authorize any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax electionof, or change commit or agree to take any of, the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than foregoing actions in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liability; consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of a material amount of Taxes; grant any power of attorney with respect to material Taxes; enter into any Tax Sharing Agreement or any closing agreement or other similar agreement; or change any method of accounting for Tax purposes;preceding clause (i) – (xviii).
Appears in 2 contracts
Samples: Merger Agreement (Restaurant Brands International Inc.), Merger Agreement (Popeyes Louisiana Kitchen, Inc.)
Conduct of Business. During (a) Except as expressly contemplated by this Agreement, during the period from the date of this Agreement to the Effective Time, except as consented to in writing in advance by VMware or as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) by this Agreement, Pivotal LIN shall, and shall cause each of its Subsidiaries subsidiaries to, act and carry on its business their respective businesses in the ordinary coursecourse of business and, including its development and sales efforts as currently contemplatedto the extent consistent therewith, and use commercially reasonable efforts to (i) preserve intact its their current business organizationorganizations, assets, rights and properties, (ii) keep available the services of its their current officers, officers and employees and consultants and (iii) preserve its the goodwill and its of those engaged in material business relationships with customers, suppliers, licensors, licensees, distributors and others having material business dealings with itthem. In addition to and without Without limiting the generality of the foregoing, during the period from the date of this Agreement to the Effective Time, Time and except (x) as set forth in section 5.1 of the Pivotal LIN SEC Document or the LIN Disclosure Letter, (y) as specifically required by this Agreement or (z) as specifically required by applicable Law, Pivotal LIN shall not, and shall not permit any of its Subsidiariessubsidiaries to, without VMware’s the prior written consent of Chancellor (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall not be unreasonably delayed or withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), to:):
(ai) (iw) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its or its subsidiaries' outstanding capital stock or other equity interests, (except for dividends and distributions by a direct or indirect wholly owned Subsidiary subsidiary of Pivotal LIN to Pivotal or any other wholly owned Subsidiary of Pivotalits parent), (ii) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iiix) split, combine, combine or reclassify or otherwise amend the terms of any of its outstanding capital stock or other equity interests or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its outstanding capital stock, (y) except in connection with the termination of the employment of any employees, purchase, redeem or otherwise acquire any shares of outstanding capital stock or other equity interests;
any rights, warrants or options to acquire any such shares, or (bz) issue, deliver, sell, grant, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) any shares of its capital stock or stock, any other equity interests securities or any securities convertible into, exchangeable for or exercisable for any such shares or other equity interests, or any rights, warrants or options to acquire, any such shares shares, equity securities or other equity interests, or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive shares of capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof convertible securities (other than the issuance of Class A Shares (A) upon the exercise of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPP, in each case, that are LIN Stock Options outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with their terms as in effect on such date);
(c) amend or otherwise change, or authorize or propose to amend or otherwise change, its certificate of incorporation or bylaws (or similar organizational documents);
(d) directly or indirectly acquire or agree to acquire (i) by merging or consolidating with, purchasing a substantial equity interest in or a substantial portion of the assets of, making an investment in or loan or capital contribution to or in any other manner, any corporation, partnership, association or other business organization or division thereof or (ii) any assets that are otherwise material to Pivotal and its Subsidiaries, except, in each case, for (1) capital expenditures which shall be subject to the limitations of issued under clause (iC) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes in the ordinary course of business consistent with Pivotal’s investment management policy, and except in the case of clause (ii), acquisitions of inventory, products or services in the ordinary course of business; Table of Contents
(e) directly or indirectly sell, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien or otherwise dispose in whole or in part of any of its material properties, assets or rights (including any material Pivotal Intellectual Property Registrations) or any interest therein, except, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Out;
(f) adopt or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, other than Pivotal or any direct or indirect wholly owned Subsidiary of Pivotal;
(i) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto that in the aggregate are in excess of $1,000,000;
(j) except as required by any judgment by a court of competent jurisdiction, (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge or satisfaction in the ordinary course of businessbelow, (B) as required by their terms as pursuant to employment agreements or other contractual arrangements in effect on the date of this Agreement of claimsAgreement, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since LIN Stock Options granted after the date of such financial statements in the ordinary course of business, (ii) cancel any material Indebtedness owed this Agreement to Pivotal or any of its Subsidiaries, or (iii) waive, release, grant or transfer any right of material value;
(k) (i) materially modify, materially amend, terminate, cancel, waive any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (ii) enter into any Contract that if in effect on the date hereof would be a Material Contract, other than customer contracts entered into in the ordinary course of business;
(l) commence any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal or any of its Subsidiaries), or compromise, settle or agree purchase up to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements in the ordinary course of business that involve only the payment of money damages not in excess of $500,000 individually or $2,000,000 in the an aggregate, in any case without the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal or any of its Subsidiaries;
(m) change its financial or Tax accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law;
(n) settle or compromise any material liability for Taxes or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liability; consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of a material amount of Taxes; grant any power of attorney with respect to material Taxes; enter into any Tax Sharing Agreement or any closing agreement or other similar agreement; or change any method of accounting for Tax purposes;
Appears in 2 contracts
Samples: Merger Agreement (WTNH Broadcasting Inc), Merger Agreement (Chancellor Media Corp of Los Angeles)
Conduct of Business. During (a) Except as required by applicable Law or expressly contemplated or permitted by this Agreement or as contemplated by Section 5.1(a) of the Company Disclosure Schedule, during the period from the date of this Agreement to until the Effective TimeTime (or such earlier date on which this Agreement may be terminated), except as consented to unless the Parent otherwise consents in writing in advance by VMware (which consent shall not be unreasonably withheld, delayed or as otherwise expressly required or prohibited (including by conditioned), the restrictions set forth in subclauses (a) through (r) below) by this Agreement, Pivotal Company shall, and shall cause each of its Subsidiaries to, carry on its business in all material respects in the ordinary course, including course of business and shall use its development and sales efforts as currently contemplated, and use commercially reasonable best efforts to (i) preserve its and its Subsidiaries’ business organizations intact and maintain existing relations with key customers, distributors, suppliers, Franchisees, employees and other persons with whom the Company or its Subsidiaries have business organizationrelationships, assets, rights and properties, (ii) keep available the services of its current officers, employees and consultants and (iii) preserve its goodwill and its relationships with customers, suppliers, licensors, licensees, distributors and others having material business dealings with it. In addition to and without Without limiting the generality of the foregoing, during the period from the date of this Agreement to the Effective Time, and except (x) as set forth in section 5.1 of the Pivotal Disclosure Letter, (y) as specifically required by applicable Law or any Governmental Authority or expressly contemplated or permitted by this Agreement or (zas contemplated by Section 5.1(a) as specifically required by applicable Lawof the Company Disclosure Schedule, Pivotal during such period, the Company shall not, and shall not permit any of its SubsidiariesSubsidiaries to, without VMware’s prior written consent unless Parent otherwise consents (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), to:or conditioned):
(a) (i) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock or other equity interests, except for dividends by a wholly owned Subsidiary of Pivotal to Pivotal or any other wholly owned Subsidiary of Pivotal, (ii) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii) split, combine, reclassify or otherwise amend the terms of any of its capital stock or other equity 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 other equity interests;
(b) issue, deliver, sell, grant, pledge sell or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) grant any shares of its capital stock or other equity interests stock, or any securities or rights convertible into, exchangeable for or exercisable for, or evidencing the right to subscribe for any such shares or other equity interestsof its capital stock, or any rights, warrants or options to acquirepurchase any shares of its capital stock, or any securities or rights convertible into, exchangeable or exercisable for, or evidencing the right to subscribe for, any such shares of its capital stock, provided that the Company may issue shares of Company Common Stock as required to be issued upon exercise or settlement of Options or other equity interests, rights or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive shares obligations under the Company Stock Plans or Company Plans outstanding on the date hereof in accordance with the terms of capital stock of VMware on a deferred basis the applicable Company Stock Plan or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as Company Plan in effect on the date hereof; (B) redeem, purchase or otherwise acquire any of its outstanding shares of capital stock, or any rights, warrants or options to acquire any shares of its capital stock, except (x) pursuant to written commitments in effect as of the date hereof only from former employees or directors in connection with any termination of services to the Company or any of its Subsidiaries or (other than y) in connection with withholding to satisfy tax obligations with respect to Options, acquisitions in connection with the issuance forfeiture of Class A Shares upon equity awards, or acquisitions in connection with the net exercise of Pivotal Options; (C) establish a record date for, the settlement declare, set aside for payment or pay any dividend on, or make any other distribution in respect of, any shares of Pivotal RSUs its capital stock; or the exercise (D) split, combine, subdivide or reclassify any shares of purchase rights under the Pivotal ESPP, in each case, that are outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with their terms as in effect on such date)its capital stock;
(cii) amend enter into any collective bargaining agreement or otherwise change, other agreement with a labor union or authorize or propose to amend or otherwise change, its certificate of incorporation or bylaws (or similar organizational documents)works council;
(diii) directly (A) incur, issue, modify, renew, syndicate or indirectly acquire or agree to acquire refinance any Indebtedness (i) by merging or consolidating with, purchasing a substantial equity interest in or a substantial portion excluding any letters of the assets of, making an investment in or loan or capital contribution to or in any other manner, any corporation, partnership, association or other business organization or division thereof or (ii) any assets that are otherwise material to Pivotal and its Subsidiaries, except, in each case, for (1) capital expenditures which shall be subject to the limitations of clause (i) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes credit issued in the ordinary course of business consistent with Pivotal’s investment management policy, and except in the case of clause (iibusiness), acquisitions attempt to do any of inventorythe foregoing, products announce or services authorize the announcement of any of the foregoing or engage in any discussions concerning any of the foregoing except for Indebtedness incurred under the Company’s existing credit facility listed on Schedule 3.17(a) of the Company Disclosure Schedule, (B) enter into any swap or hedging transaction or other derivative agreements other than in the ordinary course of business; Table provided, that the Company shall consult in good faith with Parent prior to entering into, amending or otherwise modifying or agreeing in principle to any Contract relating to or reflecting any material hedging arrangement, or (C) make any loans, capital contributions or advances to any Person (other than the Company and any wholly-owned Subsidiary of Contentsthe Company);
(eiv) directly adopt or indirectly sell, implement any stockholder rights plan;
(v) sell or lease, licensein a single transaction or series of related transactions, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien or otherwise dispose in whole or in part of any of its material propertiesproperties or assets whose value or purchase price, individually or in the aggregate, exceeds $2,500,000, except (A) dispositions of obsolete or worthless assets or rights (B) in the ordinary course of business;
(vi) make or authorize any capital expenditures except as set forth in the capital budget set forth in Section 5.1(a)(vi) of the Company Disclosure Schedule;
(vii) make any acquisition (including by merger) of the capital stock or (except in the ordinary course of business or as otherwise permitted by this Agreement) a material portion of the assets of any other Person for consideration in excess of $2,000,000;
(viii) (A) increase the compensation, or benefits in respect of, any of its officers, directors or employees, other than as required by the terms of any applicable agreement or benefit plan on the date of execution of this Agreement or as required by applicable Law, (B) provide increases in salaries, wages and benefits of employees who are not officers or directors of the Company other than in the ordinary course of business, or (C) enter into any severance, change-in-control, retention or other agreement with any employee or independent contractor;
(ix) (A) make any material Pivotal Intellectual Property Registrationschanges in financial or tax accounting methods, principles or practices (or change an annual accounting or period), except insofar as may be required by applicable Law, including without limitation a change in GAAP or (B) accelerate the collection of receivables or delay the payment of accounts payables;
(x) grant any interest thereinmaterial refunds, exceptcredits, rebates or other allowances by the Company or its Subsidiaries to any Franchisee, supplier, vendor or distributor, in each case, other than in the ordinary course of business;
(ixi) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, amend the Company Charter Documents or encumbrances required to be effected prior organizational documents of any Subsidiary;
(xii) enter into any new line of business material to the Effective Time pursuant to existing Contracts that are not material to Pivotal Company and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Outwhole;
(fxiii) adopt fail to make any material filing, pay any fee, or take another action necessary to maintain in full force and effect any Intellectual Property right owned by the Company or any Subsidiary that is material to the conduct of the business of the Company or any Subsidiary, or enter into any license or transfer agreement granting or transferring to a third party an exclusive right to use any such Intellectual Property, other than licenses providing territorial exclusivity to Franchisees entered into in the ordinary course of business;
(xiv) adopt a plan or agreement of complete or partial liquidationliquidation or dissolution, dissolutionmerger, consolidation, restructuring, recapitalization or other reorganizationreorganization of the Company or any of its Subsidiaries;
(gxv) (A) grant any Lien (other than Permitted Liens) in any of its material assets other than to secure Indebtedness permitted under Section 5.1(a)(iii) or (B) secure, directly or indirectly, obligations other than Indebtedness in the ordinary course of business;
(xvi) fail to maintainuse its reasonable best efforts to maintain in full force and effect the existing insurance policies or to replace such insurance policies with comparable insurance policies covering the Company, its Subsidiaries and their respective properties, assets and businesses or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrationssubstantially equivalent policies;
(hA) (i) incurmodify, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify terminate or refinance waive any Indebtedness or (ii) make rights under any loans, advances or capital contributions to, or investments in, any other Person, Material Contract other than Pivotal or any direct or indirect wholly owned Subsidiary of Pivotal;
(i) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto that in the aggregate are in excess of $1,000,000;
(j) except as required by any judgment by a court of competent jurisdiction, (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge or satisfaction in the ordinary course of business, (B) as required by their terms as in effect on the date of this Agreement of claimsenter into any Contract, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed which if entered into prior to the date hereof (for amounts not in excess of such reserves) would have been a Material Contract or (C) incurred since enter into any new Contract that contains a change in control provision in favor of the date other party or parties thereto or would otherwise require a payment to or give rise to any rights to such other party or parties in connection with the transactions contemplated hereby;
(xviii) enter into any distribution Contract or renew, modify, amend, terminate or waive any existing distribution Contract (including the MBM Contract and the SYGMA Contract) providing for the distribution of goods to any restaurant operated by the Company, any Subsidiary or any Franchisee;
(xix) enter into any Contract or modify, amend, terminate or waive any existing Contract covering the development of ten or more restaurants;
(xx) terminate any Franchise Agreement to which a Material Franchisee is a party;
(xxi) pay, discharge, settle or compromise any pending or threatened suit, action or claim which (A) requires payment to or by the Company or any Subsidiary (exclusive of attorney’s fees) in excess of $250,000 in any single instance or in excess of $1,000,000 in the aggregate, (B) involves injunctive or equitable relief or restrictions on the business activities of the Company or any of its Subsidiaries, (C) would involve the issuance of Company Securities or (D) relates to the transactions contemplated by this Agreement or by the Prior Merger Agreement;
(xxii) except as required by Law or as otherwise is in the ordinary course of business (a) make any material change (or file any such financial statements change) in any method of Tax accounting or any annual Tax accounting period; (b) make, change or rescind any material Tax election; (c) settle or compromise any material Tax liability, audit claim or assessment; (d) surrender any right to claim for a material Tax refund; (e) file any amended Tax Return involving a material amount of additional Taxes; (f) enter into any closing agreement; or (g) waive or extend the statute of limitations in respect of any Income or other material Taxes other than pursuant to extensions of time to file Tax Returns obtained in the ordinary course of business, ;
(ii) cancel any material Indebtedness owed to Pivotal or any of its Subsidiaries, or (iiixxiii) waive, release, grant or transfer any right of material value;
(k) (i) materially modify, materially amend, terminate, cancel, waive any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (ii) enter into any Contract that if in effect on the date hereof would be a Material Contract, other than customer contracts entered into in the ordinary course of business;
(l) commence any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal or any of its Subsidiaries), or compromise, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements in the ordinary course of business that involve only the payment of money damages not in excess of $500,000 individually or $2,000,000 in the aggregate, in any case without the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal or any of its Subsidiaries;
(m) change its financial or Tax accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law;
(n) settle or compromise any material liability for Taxes or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liability; or waive any material benefits of, or agree to modify in any material adverse respect, or, subject to the terms hereof, fail to enforce, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of a material amount of Taxes; grant any power of attorney matter with respect to which its consent is required under, any material Taxes; enter into any Tax Sharing Agreement confidentiality, standstill or similar agreement to which the Company or any closing agreement of its Subsidiaries is a party;
(xxiv) amend or other similar agreementterminate any Company Plan or establish or adopt any plan, program or arrangement that if in existence at the date hereof would be a Company Plan, except as required by applicable Law;
(xxv) enter into, amend, waive or terminate any Company Related Party Transaction;
(xxvi) permit any of its Subsidiaries or Affiliates or any of its or their respective directors, officers, managers, employees, independent contractors, representatives or agents to promise, authorize or make any payment to, or otherwise contribute any item of value to, directly or indirectly, any non-U.S. official, in each case, in violation of the Foreign Corrupt Practices Act of 1977, as amended, and any rules or regulations promulgated thereunder (“FCPA”); or
(xxvii) authorize any of, or change commit or agree, in writing or otherwise, to take any method of accounting for Tax purposes;of, the foregoing actions.
Appears in 2 contracts
Samples: Merger Agreement (Aeroways, LLC), Merger Agreement (Cke Restaurants Inc)
Conduct of Business. During the period from the date of this Agreement to the Effective Time, except as consented to in writing in advance by VMware or as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) Except as contemplated by this Agreement, Pivotal shall, and shall cause each of its Subsidiaries to, carry on its business in the ordinary course, including its development and sales efforts as currently contemplated, and use commercially reasonable efforts to (ior Schedule 6.2(a) preserve intact its business organization, assets, rights and properties, (ii) keep available the services of its current officers, employees and consultants and (iii) preserve its goodwill and its relationships with customers, suppliers, licensors, licensees, distributors and others having material business dealings with it. In addition to and without limiting the generality of the foregoingCompany Disclosure Schedule, or required by applicable Law, during the period from the date of this Agreement to until the Effective Time, except (x) as set forth in section 5.1 of the Pivotal Disclosure Letter, (y) as specifically required by this Agreement or (z) as specifically required by applicable Law, Pivotal shall not, and shall not permit any of its Subsidiaries, without VMware’s prior written consent unless Parent otherwise consents (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below consent shall not be unreasonably withheld, conditioned withheld or delayed), the Company shall, and shall cause its Subsidiaries to, conduct its business in all other cases shall be material respects in VMware’s sole discretion)the ordinary course consistent with past practice and use commercially reasonable efforts consistent with past practice to preserve intact its present business organizations, to:
(a) (i) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any keep available the services of its capital stock present executive officers and key employees and preserve its relationships with Persons having significant business dealings with it and take no action which would adversely affect or other equity interests, except for dividends by a wholly owned Subsidiary delay in any material respect the ability of Pivotal either Parent or the Company to Pivotal or obtain any other wholly owned Subsidiary of Pivotal, (ii) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii) split, combine, reclassify or otherwise amend the terms necessary approvals of any of its capital stock or other equity interests or issue or authorize Governmental Authority required for the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or other equity interests;Transactions.
(b) Neither the Company nor its Subsidiaries shall, unless Parent otherwise consents (which consent shall not be unreasonably withheld or delayed):
(i) (A) issue, deliver, sell, grant, pledge sell or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) grant any shares of its capital stock or other equity interests stock, or any securities or rights convertible into, exchangeable for or exercisable for, or evidencing the right to subscribe for any such shares or other equity interestsof its capital stock, or any rights, warrants or options to acquire, purchase any such shares or other equity interestsof its capital stock, or any stock appreciation rightssecurities or rights convertible into, “phantom” stock rightsexchangeable or exercisable for, performance unitsor evidencing the right to subscribe for, rights to receive any shares of its capital stock; (B) redeem, purchase or otherwise acquire any of its outstanding shares of capital stock stock, or any rights, warrants or options to acquire any shares of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Sharesits capital stock, including except pursuant to Contracts as commitments in effect on as of the date hereof hereof; (C) declare, set aside for payment or pay any dividend on, or make any other than distribution in respect of, any shares of its capital stock; or (D) adjust, split, combine, subdivide or reclassify any shares of its capital stock or otherwise amend the issuance terms of Class A Shares upon the exercise of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPP, in each case, that are outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with their terms as in effect on such date)its capital stock;
(cii) amend incur any indebtedness for borrowed money or otherwise changeguarantee any such indebtedness, or authorize or propose to amend or otherwise change, its certificate other than changes in indebtedness under the Company’s existing revolving credit agreement incurred in the ordinary course of incorporation or bylaws (or similar organizational documents)business;
(diii) directly sell, lease, dispose of or indirectly acquire grant, create or agree to acquire incur any Lien on (ix) by merging any Owned Real Property or consolidating with, purchasing a substantial equity interest in or a substantial portion of the assets of, making an investment in or loan or capital contribution to or in any other manner, any corporation, partnership, association or other business organization or division thereof Leased Real Property or (iiy) any of its properties or assets that are otherwise material to Pivotal with a fair market value in excess of $100,000 in the aggregate, except (A) sales, leases, rentals and its Subsidiaries, except, in each case, for (1) capital expenditures which shall be subject to the limitations licenses of clause (i) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes inventory in the ordinary course of business consistent with Pivotal’s investment management policypast practice or (B) transfers among the Company and its wholly owned Subsidiaries;
(iv) except with respect to leases or acquisitions of real property, and except which are intended to be covered in Section 6.2(b)(xi) below (it being understood that any business combination transaction with another Person, even if such transaction includes the case acquisition of the real property of such Person, shall be covered by this clause (iiiv) and not by clause (xi)), acquisitions make any acquisition (including by merger) of inventoryanother Person or business, products including capital stock, or services purchase or lease (except for purchases of inventory in the ordinary course of business; Table business consistent with past practice) the assets or properties, of Contentsany other Person, in each case for consideration that, when taken together with the consideration in all other such transactions not prohibited by this clause (iv), is not in excess of $250,000 in the aggregate;
(ev) directly (A) amend or indirectly sellterminate any Company Plan, lease, license, sell and leaseback, abandon, allow fail to lapse, mortgage or otherwise encumber or subject make any required contribution to any Lien Company Plan or otherwise dispose establish, adopt or enter into any plan, agreement or policy that would be a Company Plan if it were in whole existence on the date of this Agreement or in part of (B) increase the compensation or other benefits payable or to become payable to any of its material propertiescurrent or former directors, assets officers, or rights (including any material Pivotal Intellectual Property Registrations) or any interest thereinemployees, except, in each case, other than (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances as required to be effected prior to the Effective Time pursuant to existing applicable Law or the terms of Contracts that are not material to Pivotal and its Subsidiaries, taken as a whole in effect on the date of this Agreement and (ii) Ordinary Course Licenses Outincreases in salaries, wages and benefits of employees other than the Company Senior Executives made in the ordinary course of business consistent with past practice;
(fvi) adopt make any changes in financial or Tax accounting methods, principles or practices (or change an annual accounting period), except insofar as may be required by a change in GAAP or applicable Law;
(vii) amend the Company Charter Documents;
(viii) amend in a material way or waive any material rights under or enter into a plan Contract that would be required to be listed in the Company Disclosure Schedules if the value at issue in any such amendment, waiver or entrance (or any group of complete related amendments, waivers or partial liquidation, dissolution, restructuring, recapitalization or other reorganizationentrances) exceeds $100,000;
(gix) fail enter into any transaction that would be required to maintain, or allow be reported pursuant to lapse, or abandon, including by failure to pay the required fees Item 404 of Regulation S-K in any jurisdiction, any material Pivotal Intellectual Property Registrationsa future SEC report;
(hx) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, other than Pivotal (A) loans or any direct advances in immaterial amounts in the ordinary course of business consistent with past practice or indirect (B) to wholly owned Subsidiary Subsidiaries of Pivotalthe Company;
(ixi) incur except for renewals of existing leases, make any lease or commit to incur acquisition of real property or any commitment for any other capital expenditure or authorization or commitment with respect thereto that in the aggregate are in excess of $1,000,000250,000 in the aggregate (it being understood that (A) the total present value of all future lease payments shall be taken into account for purposes of determining whether the $250,000 basket has been filled and (B) leases, acquisitions and commitments that would be covered by clause (iv) shall not be included in the $250,000 basket in this clause (xi));
(jxii) except as required by enter into, amend, or extend any judgment by a court of competent jurisdictioncollective bargaining or other labor agreement;
(xiii) settle or agree to settle any material suit, action, claim, proceeding or investigation (iincluding any suit, action, claim, proceeding or investigation relating to this Agreement or the Transactions) or pay, dischargedischarge or satisfy or agree to pay, settle discharge or satisfy any claimsmaterial claim, liabilities liability or obligations obligation (whether absolute, absolute or accrued, asserted or unasserted, contingent or otherwise), ) other than (A) the payment, discharge or satisfaction in the ordinary course of business, (B) as required by their terms as in effect on the date of this Agreement of claims, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of Pivotal included full in the Pivotal SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) Financial Statements or (C) incurred since the date of such financial statements in the ordinary course of business, (ii) cancel any material Indebtedness owed to Pivotal or any of its Subsidiaries, or (iii) waive, release, grant or transfer any right of material value;
(k) (i) materially modify, materially amend, terminate, cancel, waive any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (ii) enter into any Contract that if in effect on the date hereof would be a Material Contract, other than customer contracts entered into in the ordinary course of business;
(l) commence any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal or any of its Subsidiaries), or compromise, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements in the ordinary course of business that involve only the payment of money damages not in excess of $500,000 individually or $2,000,000 in the aggregate, in any case without the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal or any of its Subsidiaries;
(m) change its financial or Tax accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law;
(n) settle or compromise any material liability for Taxes or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liability; consent subsequent to February 28, 2007;
(xiv) adopt a plan or agreement of complete or partial liquidation or dissolution;
(xv) unless requested or directed by a Governmental Authority, convene any extension regular or waiver special meeting (or any adjournment thereof) of the limitation Shareholders of the Company other than the Company Shareholders Meeting; and
(xvi) agree to take any of the foregoing actions.
(c) The Company and Parent agree that, during the period from the date of this Agreement until the Effective Time, the Company and Parent shall not, and shall not permit any of their respective Subsidiaries to, take, or agree or commit to take, any action that could reasonably be expected to (i) impose any material delay in the obtaining of, or significantly increase the risk of not obtaining, any authorizations, consents, orders, declarations or approvals of any Governmental Authority necessary to consummate the Transactions or the expiration or termination of any applicable waiting period, (ii) significantly increase the risk of any Governmental Authority entering an order or Restraint prohibiting or impeding the consummation of the Transactions or (iii) otherwise materially delay the consummation of the Transactions (each, a “Delay”). Without limiting the generality of the foregoing, Parent agrees that, during the period from the date of this Agreement until the Effective Time, Parent shall not, and shall not permit any of its Subsidiaries to, acquire or agree to acquire by merging or consolidating with, or by purchasing a substantial portion of the assets of or equity in, or by any claim other manner, any Person or assessment in respect portion thereof, or otherwise acquire or agree to acquire any assets or rights, if the entering into of a material amount definitive agreement relating to or the consummation of Taxes; grant any power of attorney with respect such acquisition, merger or consolidation would reasonably be expected to material Taxes; enter into any Tax Sharing Agreement or any closing agreement or other similar agreement; or change any method of accounting for Tax purposes;result in a Delay.
Appears in 2 contracts
Samples: Merger Agreement (Acr Group Inc), Merger Agreement (Watsco Inc)
Conduct of Business. During the period from the date of this Agreement to the Effective Time, except as consented to in writing in advance by VMware or as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) by this Agreement, Pivotal shall, The Company covenants and shall cause each of its Subsidiaries to, carry on its business in the ordinary course, including its development and sales efforts as currently contemplated, and use commercially reasonable efforts to (i) preserve intact its business organization, assets, rights and properties, (ii) keep available the services of its current officers, employees and consultants and (iii) preserve its goodwill and its relationships with customers, suppliers, licensors, licensees, distributors and others having material business dealings with it. In addition to and without limiting the generality of the foregoingagrees that, during the period from the date of this Agreement to the Effective TimeTime (unless Acquiror shall otherwise agree in writing, except (x) as set forth in section 5.1 of the Pivotal Disclosure Letter, (y) as specifically required by this Agreement or (z) as specifically required by applicable Law, Pivotal shall not, and shall not permit any of its Subsidiaries, without VMware’s prior written consent (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below agreement shall not be unreasonably withheld, conditioned or delayedand except as otherwise contemplated by this Agreement), the Company will, and will cause each of its subsidiaries to, conduct its operations according to its ordinary and usual course of business consistent with past practice and, to the extent consistent therewith, with no less diligence and effort than would be applied in all other cases the absence of this Agreement, seek to preserve intact its current business organizations, keep available the service of its current officers and employees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that goodwill and ongoing businesses shall be unimpaired at the Effective Time. Without limiting the generality of the foregoing, and except as otherwise permitted in VMware’s sole discretion)this Agreement or disclosed in Section 6.1 of the Company Disclosure Schedule, toprior to the Effective Time, neither the Company nor any of its subsidiaries will, without the prior written consent of Acquiror, which consent shall not be unreasonably withheld:
(ai) (iA) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock or other equity interests, except for dividends by a wholly owned Subsidiary of Pivotal to Pivotal or any other wholly owned Subsidiary of Pivotal, (ii) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interestsstock, other than (A) dividends and distributions by any direct or indirect wholly owned subsidiary of the withholding of Class A Shares Company to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreementits parent, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii) split, combine, combine or reclassify or otherwise amend the terms of any of its capital stock or or, except pursuant to the exercise of options, warrants, conversion rights, exchange rights and other equity interests or contractual rights existing on the date hereof, issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or other equity interestsinterests or (C) purchase, redeem or otherwise acquire or amend any shares of capital stock or other equity interests of the Company or any of its subsidiaries or any other securities thereof or any rights, warrants or options to acquire any such shares, interests or other securities;
(bii) issue, deliver, sell, grant, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) amend any shares of its capital stock or stock, any other equity interests voting securities or any securities convertible into, exchangeable for or exercisable for any such shares or other equity interests, or any rights, warrants or options to acquire, any such shares or other equity shares, interests, voting securities or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive shares of capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Sharesconvertible securities, including pursuant to Contracts as in effect on the date hereof (Option Plans, other than (A) the issuance of Class A Shares upon the exercise conversion of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPP, in each case, that are Convertible Notes outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with their present terms, (B) the issuance of Shares upon the exercise of Options outstanding on the date of this Agreement in accordance with their present terms as and (C) the issuance of Shares upon the exchange of the Warrants outstanding on the date of this Agreement in effect on such date)accordance with their present terms;
(ciii) amend its Articles of Incorporation, By-Laws or otherwise change, other comparable charter or authorize or propose to amend or otherwise change, its certificate of incorporation or bylaws (or similar organizational documents);
(div) directly or indirectly acquire or agree to acquire (iA) by merging or consolidating with, or by purchasing a substantial equity interest in or a substantial portion of the assets of, making an investment in or loan or capital contribution to or in by any other manner, any business or any corporation, partnership, joint venture, association or other business organization or division thereof or (iiB) any assets asset requiring or involving an expenditure or purchase price in excess of $100,000, except (x) mergers and consolidations between or among one or more wholly owned subsidiaries of the Company that are otherwise material to Pivotal and its Subsidiaries, except, in each case, for (1) capital expenditures which shall be subject will not create adverse tax consequences to the limitations of clause (i) below Company or its subsidiaries, and (2y) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes inventory in the ordinary course of business consistent with Pivotal’s investment management policy, and except in the case of clause (ii), acquisitions of inventory, products or services in the ordinary course of business; Table of Contentspast practice;
(ev) directly or indirectly sell, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien lien or otherwise dispose in whole or in part of any of its material propertiesproperties or assets, assets or rights (including any material Pivotal Intellectual Property Registrations) or any interest therein, except, except in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Outordinary course of business consistent with past practice;
(fA) adopt other than incurrences of indebtedness (which term shall be deemed not to include trade payables incurred in the ordinary course of business) in the ordinary course of business which, in the aggregate, do not exceed $50,000, incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its subsidiaries, guarantee any debt securities of another person, enter into any "keep well" or other agreement to maintain any financial statement condition of another person or enter into a plan any arrangement having the economic effect of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay any of the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness foregoing or (iiB) make any loans, advances or capital contributions to, or investments in, any other Person, person other than Pivotal to the Company or any direct or indirect wholly owned Subsidiary subsidiary of Pivotalthe Company;
(i) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto that in the aggregate are in excess of $1,000,000;
(j) except as required by any judgment by a court of competent jurisdiction, (ivii) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge discharge, settlement or satisfaction satisfaction, in the ordinary course of business, (B) as required by accordance with their terms as in effect on the date of this Agreement of claims, liabilities or obligations reflected or reserved against in the most recent audited consolidated financial statements (or the notes thereto) of Pivotal the Company included in the Pivotal Company SEC Documents Reports filed and publicly available prior to the date hereof (for amounts not of this Agreement or incurred in excess the ordinary course of such reserves) or (C) incurred business consistent with past practice since the date of such financial statements statements, or waive the benefits of, or agree to modify in any manner, any confidentiality, standstill or similar agreement to which the ordinary course of business, (ii) cancel any material Indebtedness owed to Pivotal Company or any of its Subsidiaries, or (iii) waive, release, grant or transfer any right of material valuesubsidiaries is a party;
(kviii) (iA) materially modifyadopt, materially amendenter into, terminateterminate or amend any Company Benefit Plan or other arrangement for the benefit or welfare of any director, cancel, waive any material right under officer or extend any Material Contract (other than renewals current or former employee of Contracts with customers of Pivotal Products in the ordinary course of business) or (ii) enter into any Contract that if in effect on the date hereof would be a Material Contract, other than customer contracts entered into in the ordinary course of business;
(l) commence any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal Company or any of its Subsidiaries)subsidiaries, (B) increase in any manner the compensation or fringe benefits of, or compromisepay any bonus to, settle any such director, officer or agree employee (except for normal increases or bonuses as contractually required pursuant to settle any Legal Proceeding, other than Transaction Litigation which is subject agreements disclosed in the Company SEC Reports filed and publicly available prior to section 5.7), compromises, settlements the date of this Agreement or agreements in the ordinary course of business that involve only consistent with past practice to employees other than directors and executive officers of the payment of money damages not in excess of $500,000 individually or $2,000,000 Company and that, in the aggregate, do not result in any case without material increase in benefits or compensation expense to the imposition Company and its subsidiaries relative to the level in effect prior to such action (but in no event shall the aggregate amount of the increases granted to any equitable relief onsuch director, officer or employee exceed 5% of the aggregate annualized compensation of such director, officer or employee and in no event shall the aggregate amount of all such increases exceed 1% of the aggregate annualized compensation expense of the Company and its subsidiaries reported in the most recent consolidated financial statements of the Company included in the Company SEC Reports filed and publicly available prior to the date of this Agreement) and except as contractually required pursuant to agreements included as part of a Company SEC Reports filed and publicly available prior to the date of this Agreement), (C) pay any benefit not provided for under any Company Benefit Plan, (D) except for payments or awards in cash permitted by clause (B), grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or Company Benefit Plan (including the grant of stock options, stock appreciation rights, stock-based or stock-related awards, performance units or restricted stock, or the admission removal of wrongdoing byexisting restrictions in any Company Benefit Plans or agreements or awards made thereunder) or (E) take any action to fund or in any other way secure the payment of compensation or benefits under any employee plan, Pivotal agreement, contract or arrangement or Company Benefit Plan;
(ix) make or agree to make any capital expenditure or expenditures other than for maintenance purposes;
(x) modify, amend or terminate any contract or agreement set forth in the Company SEC Reports or any real property lease to which the Company or any of its Subsidiariessubsidiaries is a party, or waive, release or assign any material rights or claims thereunder;
(mxi) change its financial take or Tax accounting methods, principles or practices, except insofar as may have been required by agree to take any action that would prevent the Merger from constituting a change in GAAP or applicable Lawreorganization qualifying under the provisions of Section 368(a)(1) of the Code;
(nxii) settle conduct its business in a manner or compromise any material liability for Taxes or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax electiontake, or change the entity classification of cause to be taken, any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis consistent with past practice action that would or might reasonably be expected to prevent or materially and adversely affect its Tax liability; consent to delay the Company or Acquiror from consummating the transactions contemplated hereby in accordance with the terms of this Agreement (regardless of whether such action would otherwise be permitted or not prohibited hereunder), including, without limitation, any extension or waiver action which may materially limit the ability of the limitation Company or Acquiror to consummate the transactions contemplated hereby as a result of antitrust or other regulatory concerns; or
(xiii) authorize any of, or commit or agree to take any of, the foregoing actions.
(b) Acquiror covenants and agrees that, during the period applicable from the date of this Agreement to any claim or assessment in respect of a material amount of Taxes; grant any power of attorney with respect to material Taxes; enter into any Tax Sharing Agreement the Effective Time, neither Acquiror or any closing agreement of its subsidiaries will, without the prior written consent of the Company, which consent shall not be unreasonably withheld:
(i) take or agree to take any action that would prevent the Merger from constituting a reorganization qualifying under the provisions of Section 368(a)(1) of the Code;
(ii) conduct its business in a manner or take, or cause to be taken, any other action that would or might reasonably be expected to prevent or materially delay Acquiror or the Company from consummating the transactions contemplated hereby in accordance with the terms of this Agreement (regardless of whether such action would otherwise be permitted or not prohibited hereunder), including, without limitation, any action which may materially limit the ability of Acquiror or the Company to consummate the transactions contemplated hereby as a result of antitrust or other similar agreementregulatory concerns; or
(iii) authorize any of, or change commit or agree to take any method of accounting for Tax purposes;of, the foregoing actions.
Appears in 2 contracts
Samples: Merger Agreement (Toys R Us Inc), Merger Agreement (Toys R Us Inc)
Conduct of Business. During the period from From the date of this Agreement to until the Effective Timeearlier of the Closing Date or the termination of this Agreement in accordance with its terms (the “Interim Period”), except as consented to in writing in advance by VMware or as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) by this Agreement, Pivotal Company shall, and shall cause each of its Subsidiaries to, carry except as set forth on Schedule 6.01, as expressly contemplated by this Agreement or as consented to by Acquiror in writing (which consent shall not be unreasonably conditioned, withheld or delayed), or as may be required by Law, (i) use reasonable best efforts to conduct and operate its business in the ordinary course, including its development and sales efforts as currently contemplatedcourse consistent with past practice, and use commercially reasonable efforts to (i) preserve intact its the current business organization, assets, rights organization and properties, (ii) keep available ongoing businesses of the services of its current officers, employees and consultants and (iii) preserve its goodwill Company and its relationships Subsidiaries, and maintain the existing relations and goodwill of the Company and its Subsidiaries with customers, suppliers, licensors, licenseesjoint venture partners, distributors and others having material business dealings with itcreditors of the Company and its Subsidiaries and (ii) use reasonable best efforts to maintain all insurance policies of the Company and its Subsidiaries or substitutes therefor. In addition to and without Without limiting the generality of the foregoing, during the period from the date of this Agreement to the Effective Time, except (x) as set forth in section 5.1 of the Pivotal Disclosure Letteron Schedule 6.01, (y) as specifically required expressly contemplated by this Agreement or as consented to by Acquiror in writing (z) which consent shall not be unreasonably conditioned, withheld or delayed), or as specifically may be required by applicable Law, Pivotal the Company shall not, and the Company shall cause its Subsidiaries not permit any of its Subsidiariesto, without VMware’s prior written consent (which consentduring the Interim Period, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), toexcept as otherwise contemplated by this Agreement:
(a) change or amend the certificate of incorporation, bylaws or other organizational documents of the Company or its Subsidiaries;
(b) (i) declaremake, set aside declare or pay any dividends on, dividend or make any other distributions distribution (whether in cash, stock or property) to the stockholders of the Company in respect oftheir capacities as stockholders, (ii) effect any recapitalization, reclassification, split or other change in its capitalization, (iii) except in connection with the exercise or settlement of any Company Group Equity Award or for grants of Company Group Equity Awards in the ordinary course of business consistent with past practice, authorize for issuance, issue, sell, transfer, pledge, encumber, dispose of or deliver any additional shares of its capital stock or other equity interests, except securities convertible into or exchangeable for dividends by a wholly owned Subsidiary of Pivotal to Pivotal or any other wholly owned Subsidiary of Pivotal, (ii) purchase, redeem or otherwise acquire shares of its capital stock stock, or issue, sell, transfer, pledge, encumber or grant any right, option, Company Group RSU, Company Group SAR or other equity interests commitment for the issuance of Pivotal or shares of its Subsidiaries or any options, warrantscapital stock, or rights to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii) split, combine, combine or reclassify or otherwise amend the terms of any shares of its capital stock or other equity interests (iv) except pursuant to the Company Group Stock Plans or issue as set forth on Exhibit E, repurchase, redeem or authorize the issuance of otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any other securities in respect of, in lieu of or in substitution for shares of its capital stock or other equity interests;
(bc) issueenter into, deliveror amend or modify any material term of (in a manner adverse to the Company or any of its Subsidiaries), terminate (excluding any expiration in accordance with its terms), or waive or release any material rights, claims or benefits under, any Contract of a type required to be listed on Schedule 4.12(a) (or any Contract, that if existing on the date hereof, would have been required to be listed on Schedule 4.12(a)), any lease related to the Leased Real Property or any collective bargaining or similar agreement (including agreements with works councils and trade unions and side letters) to which the Company or its Subsidiaries is a party or by which it is bound, other than entry into, amendments of, modifications of, terminations of, or waivers or releases under, such agreements in the ordinary course of business consistent with past practice;
(d) sell, granttransfer, lease, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions Lien, abandon, cancel, let lapse or convey or dispose of general applicability as may be provided under the Securities Act any assets, properties or other applicable securities Laws) any shares of its capital stock or other equity interests or any securities convertible into, exchangeable for or exercisable for any such shares or other equity interests, or any rights, warrants or options to acquire, any such shares or other equity interests, or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive shares of capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof (other than the issuance of Class A Shares upon the exercise of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPP, in each case, that are outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with their terms as in effect on such date);
(c) amend or otherwise change, or authorize or propose to amend or otherwise change, its certificate of incorporation or bylaws (or similar organizational documents);
(d) directly or indirectly acquire or agree to acquire (i) by merging or consolidating with, purchasing a substantial equity interest in or a substantial portion business of the assets of, making an investment in or loan or capital contribution to or in any other manner, any corporation, partnership, association or other business organization or division thereof or (ii) any assets that are otherwise material to Pivotal Company and its Subsidiaries, excepttaken as a whole (including Owned Intellectual Property and Owned Company Software), in each case, except for (1x) capital expenditures which shall be subject to the limitations dispositions of clause obsolete or worthless assets, (iy) below and (2) purchases sales of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes inventory in the ordinary course of business consistent with Pivotal’s investment management policypast practice and (z) sales, and except abandonment, lapses of assets or items or materials in an amount not in excess of $25,000,000 in the case of clause aggregate, other than (iiA) as set forth on Schedule 6.01(d), acquisitions of inventory(B) Permitted Liens or (C) pledges, products or services non-exclusive licenses and encumbrances on property and assets in the ordinary course of business; Table of Contentsbusiness consistent with past practice and that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect;
(e) directly except as set forth on Exhibit E or indirectly sell, lease, license, sell and leaseback, abandon, allow as otherwise required pursuant to lapse, mortgage or otherwise encumber or subject to any Lien or otherwise dispose in whole or in part of any of its material properties, assets or rights (including any material Pivotal Intellectual Property Registrations) or any interest therein, exceptCompany Benefit Plans, in each caseeffect on the date of this Agreement, applicable Law, or policies or Contracts of the Company or its Subsidiaries in effect on the date of this Agreement, (i) salesgrant any material increase in compensation, pledgesbenefits or severance to any employee of the Company or its Subsidiaries other than any employee with an annual base salary of less than $300,000, dispositions(ii) except the Company Group Stock Plan and awards thereunder, transfersadopt, abandonmentsenter into or materially amend any Company Benefit Plan or any collective bargaining or similar agreement (including agreements with works councils and trade unions and side letters) to which the Company or its Subsidiaries is a party or by which it is bound, leases, licenses, lapses, expirations, (iii) grant or encumbrances required provide any severance or termination payments or benefits to be effected prior to any employee of the Effective Time pursuant to existing Contracts that are not material to Pivotal and Company or its Subsidiaries, taken as a whole and except in connection with the promotion, hiring (iito the extent permitted by clause (iv) Ordinary Course Licenses Outof this paragraph) or firing of any employee in the ordinary course of business consistent with past practice or (iv) hire any employee of the Company or its Subsidiaries or any other individual who is providing or will provide services to the Company or its Subsidiaries other than any employee with an annual base salary of less than $300,000 (except to replace terminated employees) in the ordinary course of business consistent with past practice;
(f) (i) fail to maintain its existence or acquire by merger or consolidation with, or merge or consolidate with, or purchase a material portion of the assets or equity of, any corporation, partnership, limited liability company, association, joint venture or other business organization or division thereof; or (ii) adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganizationreorganization of the Company or its Subsidiaries (other than the transactions contemplated by this Agreement);
(g) fail make any capital expenditures (or commitment to maintainmake any capital expenditures) that in the aggregate exceed $25,000,000, other than any capital expenditure (or allow series of related capital expenditures) consistent in all material respects with the Company’s annual capital expenditure budget for periods following the date hereof, made available to lapse, Acquiror or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrationscapitalized Contract costs associated with new or existing customers;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, other than Pivotal or any direct or indirect wholly owned Subsidiary of Pivotal;
Person (i) incur or commit including to incur any capital expenditure or authorization or commitment with respect thereto that in the aggregate are in excess of $1,000,000;
(j) except as required by any judgment by a court of competent jurisdiction, (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge or satisfaction in the ordinary course of business, (B) as required by their terms as in effect on the date of this Agreement of claims, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements in the ordinary course of business, (ii) cancel any material Indebtedness owed to Pivotal or any of its Subsidiariesofficers, directors, agents or consultants), make any material change in its existing borrowing or lending arrangements for or on behalf of such Persons, or (iii) waive, release, grant or transfer any right of material value;
(k) (i) materially modify, materially amend, terminate, cancel, waive any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (ii) enter into any Contract that if in effect on “keep well” or similar agreement to maintain the date hereof would be a Material Contractfinancial condition of any other Person, other than customer contracts entered into in except advances to employees or officers of the ordinary course of business;
(l) commence any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal Company or any of its Subsidiaries), or compromise, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements Subsidiaries in the ordinary course of business that involve only consistent with past practice;
(i) make, revoke or change any material Tax election, adopt or change any material Tax accounting method or period, file any amendment to a material Tax Return, enter into any agreement with a Governmental Authority with respect to a material amount of Taxes, settle or compromise any examination, audit or other Action with a Governmental Authority of or relating to any material Taxes or settle or compromise any claim or assessment by a Governmental Authority in respect of material Taxes, consent to any extension or waiver of the payment statutory period of money damages limitations applicable to any claim or assessment in respect of Taxes, or enter into any Tax sharing or similar agreement (excluding any commercial contract not primarily related to Taxes);
(j) take any action, or knowingly fail to take any action, which action or failure to act would reasonably be expected to prevent or impede the Transactions from qualifying for the Intended Tax Treatment;
(k) acquire any fee interest in excess of $500,000 individually real property;
(l) enter into, renew or $2,000,000 in the aggregate, amend in any case without the imposition of material respect any equitable relief on, or the admission of wrongdoing by, Pivotal or any of its SubsidiariesCompany Affiliate Agreement;
(m) waive, release, compromise, settle or satisfy any pending or threatened material claim (which shall include, but not be limited to, any pending or threatened Action) or compromise or settle any liability, other than in the ordinary course of business consistent with past practice or that otherwise do not exceed $20,000,000 in the aggregate;
(n) incur, create, assume, refinance, guarantee or otherwise become liable for (whether directly, contingently or otherwise) any Indebtedness in excess of $25,000,000, other than in connection with borrowings, extensions of credit and other financial accommodations under the Company’s and Subsidiaries’ existing credit facilities, notes and other existing Indebtedness and, in each case, any refinancings thereof, provided, that, in no event shall any such borrowing, extension of credit or other financial accommodation be subject to any prepayment fee or penalty or similar arrangement or amend, restate or modify in a manner materially adverse to the Company any terms of or any agreement with respect to any such outstanding Indebtedness (when taken as a whole); provided, further, that any action permitted under this Section 6.01(n) shall be deemed not to violate Section 6.01(b) or Section 6.01(c);
(o) enter into any material new line of business outside of the business currently conducted by the Company and its Subsidiaries as of the date of this Agreement;
(p) make any material change its in financial or Tax accounting methods, principles or practices, except insofar as may have been required by a change in GAAP (including pursuant to standards, guidelines and interpretations of the Financial Accounting Standards Board or any similar organization) or applicable Law;
(nq) settle voluntarily fail to maintain, cancel or compromise materially change coverage under any insurance policy in form and amount equivalent in all material liability for Taxes or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change respects to the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liability; consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of a material amount of Taxes; grant any power of attorney insurance coverage currently maintained with respect to material Taxesthe Company and its Subsidiaries and their assets and properties; and
(r) enter into any Tax Sharing Agreement or agreement to do any closing agreement or other similar agreement; or change any method of accounting for Tax purposes;action prohibited under this Section 6.01.
Appears in 2 contracts
Samples: Merger Agreement (APX Group Holdings, Inc.), Merger Agreement (Mosaic Acquisition Corp.)
Conduct of Business. (a) During the period from the date of this Agreement to the Effective TimeInterim Period, each HTP Party shall, except as consented to in writing in advance by VMware or as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) by this Agreement, Pivotal shall, and shall cause each of its Subsidiaries to, carry on its business as consented to by the Company in the ordinary course, including its development and sales efforts as currently contemplated, and use commercially reasonable efforts to (i) preserve intact its business organization, assets, rights and properties, (ii) keep available the services of its current officers, employees and consultants and (iii) preserve its goodwill and its relationships with customers, suppliers, licensors, licensees, distributors and others having material business dealings with it. In addition to and without limiting the generality of the foregoing, during the period from the date of this Agreement to the Effective Time, except (x) as set forth in section 5.1 of the Pivotal Disclosure Letter, (y) as specifically required by this Agreement or (z) as specifically required by applicable Law, Pivotal shall not, and shall not permit any of its Subsidiaries, without VMware’s prior written consent writing (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below consent shall not be unreasonably withheld, conditioned or delayed) or as required by Law, use commercially reasonable efforts to operate its business only in the Ordinary Course of Business, including using reasonable best efforts to (i) continue the operation of the HTP Parties, (ii) maintain the services of its officers and (iii) maintain the existing business relationships of the HTP Parties.
(b) During the Interim Period, except as set forth on Section 8.01 of the HTP Disclosure Schedule, as contemplated by this Agreement, as required by Law or as consented to by the Company in writing (which consent shall not be unreasonably withheld, conditioned or delayed), HTP shall not, and in all HTP shall cause the other cases shall be in VMware’s sole discretion), HTP Parties not to:
(a) (i) change, amend or propose to amend (x) the HTP Governing Document or the certificate of incorporation, bylaws, memorandum and articles of association or other organizational documents of any HTP Party or (y) the Trust Agreement or any other agreement related to the Trust Agreement;
(ii) withdraw any of the funds held in the Trust Account, other than as permitted by the HTP Governing Documents or the Trust Agreement;
(iii) other than any redemption made in connection with the HTP Shareholder Redemption Right, declare, set aside or pay any dividends on, dividend or make any other distributions distribution or return of capital (whether in cash, stock cash or propertyin kind) in respect of, any of its capital stock or other equity interests, except for dividends by a wholly owned Subsidiary of Pivotal to Pivotal or any other wholly owned Subsidiary of Pivotal, (ii) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date equityholders of this Agreement or as permitted by this AgreementHTP;
(iv) adjust, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii) split, combine, reclassify subdivide, issue, pledge, deliver, award, grant redeem, purchase or otherwise amend the terms of any of its capital stock acquire or other equity interests or issue sell, or authorize the issuance issuance, pledge, delivery, award, grant or sale (including the grant of any other securities in respect encumbrances) of, in lieu of or in substitution for shares of its capital stock or other equity interests;
(b) issue, deliver, sell, grant, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) any shares of its capital stock or other equity interests or any securities convertible into, exchangeable for or exercisable for any such shares or other equity interests, or any rights, warrants or options to acquire, any such shares or other equity interests, or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive shares of capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Sharesany HTP Party, including pursuant to Contracts as in effect on the date hereof (other than the issuance of Class A Shares upon (w) in connection with the exercise of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPP, in each case, that are any HTP Warrants outstanding on the date hereof, (x) any redemption made in connection with the HTP Shareholder Redemption Right, (y) in connection with any private placement of this Agreement and Made Available securities conducted by HTP after the date hereof, or (z) as otherwise required by the HTP Governing Document in order to VMware and otherwise in accordance with their terms as in effect on such date)consummate the Transactions;
(cv) amend merge or otherwise changeconsolidate itself with any Person, restructure, reorganize or completely or partially liquidate or dissolve, or authorize or propose to amend or otherwise change, its certificate of incorporation or bylaws (or similar organizational documents);
(d) directly or indirectly acquire or agree to acquire (i) by merging or consolidating with, purchasing a substantial equity interest in or a substantial portion of the assets of, making an investment in or loan or capital contribution to or in any other manner, any corporation, partnership, association or other business organization or division thereof or (ii) any assets that are otherwise material to Pivotal and its Subsidiaries, except, in each case, for (1) capital expenditures which shall be subject to the limitations of clause (i) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes in the ordinary course of business consistent with Pivotal’s investment management policy, and except in the case of clause (ii), acquisitions of inventory, products or services in the ordinary course of business; Table of Contents
(e) directly or indirectly sell, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien or otherwise dispose in whole or in part of any of its material properties, assets or rights (including any material Pivotal Intellectual Property Registrations) or any interest therein, except, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Out;
(f) adopt or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganizationreorganization of HTP (other than the Merger);
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(hvi) (ix) incur, createassume, assume guarantee or otherwise become liable foror responsible for (whether directly, contingently or repay, cancel, forgive or prepay, otherwise) any Indebtedness, or amendother than Indebtedness incurred in order to finance working capital needs (including to pay amounts which would be treated as a HTP Transaction Expense if unpaid as of the Closing Date and any ordinary course operating expenses), modify or refinance any which Indebtedness or may be repaid in cash, (iiy) make any loans, advances or capital contributions to, or investments in, any other Person, other than Pivotal Person or (z) amend or modify any direct or indirect wholly owned Subsidiary of PivotalIndebtedness;
(ivii) incur or commit to making or make or incur any capital commitment or capital expenditure (or authorization series of capital commitments or commitment capital expenditures);
(viii) enter into any transaction or Contract with the Sponsor or any of its Affiliates for the payment of finder’s fees, consulting fees, monies in respect of any payment of a loan or other compensation paid by HTP, Surviving Pubco, the Surviving Company or any of their respective Subsidiaries to the Sponsor, HTP’s officers or directors, or any Affiliate of the Sponsor or HTP’s officers, for services rendered prior to, or for any services rendered in connection with, the consummation of the transactions contemplated hereby;
(ix) commence, discharge, settle, compromise, satisfy or consent to any entry of any judgment with respect thereto to any pending or threatened Action that would reasonably be expected to (x) result in any material restriction on HTP, Surviving Pubco, the Surviving Company or any of their respective Subsidiaries, (y) result in a payment of greater than $400,000 individually or $1,000,000 in the aggregate are or (z) involve any equitable remedies or admission of wrongdoing,
(x) other than in excess the Ordinary Course of $1,000,000Business, waive, release or assign any claims or rights of any HTP Party;
(jxi) except as required buy, purchase or otherwise acquire (by any judgment by a court merger, consolidation, acquisition of competent jurisdiction, (i) pay, discharge, settle stock or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent assets or otherwise), other than (A) the paymentdirectly or indirectly, discharge or satisfaction in the ordinary course of business, (B) as required by their terms as in effect on the date of this Agreement of claims, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements in the ordinary course of business, (ii) cancel any material Indebtedness owed to Pivotal portion of assets, securities, properties, interests or businesses of any of its Subsidiaries, or (iii) waive, release, grant or transfer any right of material valuePerson;
(k) (i) materially modify, materially amend, terminate, cancel, waive any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (iixii) enter into any Contract that if in effect on the date hereof would be a Material Contract, other than customer contracts entered into in the ordinary course new line of business;
(lxiii) commence enter into any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal or agreement to do any of its Subsidiaries), or compromise, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements in the ordinary course of business that involve only the payment of money damages not in excess of $500,000 individually or $2,000,000 in the aggregate, in any case without the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal or any of its Subsidiaries;action prohibited under this Section 9.01; or
(mxiv) (r) make or change its financial any material Tax election, (s) take or fail to take any action that would reasonably be expected to prevent, impair or impede the Intended Tax Treatment, (t) adopt or change any material Tax accounting methodsmethod, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law;
(nu) settle or compromise any material liability for Taxes Tax liability, (v) enter into any closing agreement within the meaning of Section 7121 of the Code (or surrender any material claim for a refund corresponding or similar provision of Taxes; state, local or foreign Tax Law), (w) file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax electionReturn, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liability; (x) consent to any extension or waiver of the limitation period applicable statute of limitations regarding any material amount of Taxes, (y) settle or consent to any claim or assessment relating to Taxes or (z) consent to any extension or waiver of the statute of limitations for any such claim or assessment (other than pursuant to an extension of time to file a Tax Return of not more than seven months obtained in respect the ordinary course of a material amount of Taxes; grant any power of attorney with respect to material Taxes; enter into any Tax Sharing Agreement or any closing agreement or other similar agreement; or change any method of accounting for Tax purposes;business).
Appears in 2 contracts
Samples: Merger Agreement (Highland Transcend Partners I Corp.), Merger Agreement (Highland Transcend Partners I Corp.)
Conduct of Business. During Except as expressly contemplated or permitted by this Agreement, consented to by the Purchaser in writing, set forth on Section 5.1 to the Company Disclosure Letter or as required by applicable Law, during the period from the date of this Agreement to until the Effective Time, except as consented to in writing in advance by VMware or as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) by this Agreement, Pivotal Company shall, and shall cause each of its Subsidiaries to, carry on (a) conduct its business in the ordinary coursecourse consistent with past practice, including its development (b) comply in all material respects with all applicable Laws and sales efforts as currently contemplatedthe requirements of all Material Contracts, and (c) use commercially reasonable efforts to (i) maintain and preserve intact its business organization, assets, rights organization and properties, (ii) keep available the goodwill of those having business relationships with it and retain the services of its current officerspresent officers and key employees, employees and consultants and (iii) preserve in each case, to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time, and (d) keep in full force and effect all material insurance policies maintained by the Company and its relationships with customersSubsidiaries, suppliers, licensors, licensees, distributors and others having material business dealings with itother than changes to such policies made in the ordinary course of business. In addition to and without Without limiting the generality of the foregoing, except as expressly permitted by this Agreement or as required by applicable Law, during the period from the date of this Agreement to the Effective Time, except (x) as set forth in section 5.1 of the Pivotal Disclosure Letter, (y) as specifically required by this Agreement or (z) as specifically required by applicable Law, Pivotal Company shall not, and shall not permit any of its Subsidiaries, without VMware’s prior written consent (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), Subsidiaries to:
(a) (i) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock or other equity interests, except for dividends by a wholly owned Subsidiary of Pivotal to Pivotal or any other wholly owned Subsidiary of Pivotal, (ii) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii) split, combine, reclassify or otherwise amend the terms of any of its capital stock or other equity 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 other equity interests;
(b) issue, deliver, sell, grant, dispose of, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) any shares of its capital stock stock, voting securities or other equity interests interests, or any securities or rights convertible into, exchangeable for or exercisable for, or evidencing the right to subscribe for any such shares of its capital stock, voting securities or other equity interests, or any rights, warrants warrants, options, calls, commitments or options any other agreements of any character to acquirepurchase or acquire any shares of its capital stock, voting securities or equity interests or any securities or rights convertible into, exchangeable or exercisable for, or evidencing the right to subscribe for, any such shares of its capital stock, voting securities or other equity interests; provided, or any stock appreciation rightshowever, “phantom” stock rights, performance units, rights to receive that (x) the Company may issue shares of capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof Company Common Stock upon (other than the issuance of Class A Shares upon 1) the exercise of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights Options granted under the Pivotal ESPPCompany Stock Plans and (2) the conversion of Convertible Securities, in each case, that are outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with their the terms as in effect on such date);
thereof and (cy) amend capital stock, voting securities or otherwise change, or authorize or propose to amend or otherwise change, its certificate of incorporation or bylaws (or similar organizational documents);
(d) directly or indirectly acquire or agree to acquire (i) by merging or consolidating with, purchasing a substantial equity interest in or a substantial portion interests of the assets of, making an investment in or loan or capital contribution to or in any other manner, any corporation, partnership, association or other business organization or division thereof or (ii) any assets that are otherwise material to Pivotal and its Subsidiaries, except, in each case, for Company’s Subsidiaries may be (1) capital expenditures which shall be subject issued to the limitations Company or a direct or indirect wholly owned Subsidiary of clause (i) below the Company and (2) purchases pledged to the extent required under the Company’s existing credit agreement listed on Section 3.13(a) of marketable the Company Disclosure Letter; (B) redeem, purchase or otherwise acquire any of its outstanding shares of capital stock, voting securities or equity interests, or any rights, warrants, options, calls, commitments or any other agreements of any character to acquire any shares of its capital stock, voting securities or equity interests; (C) declare, set aside for payment or pay any dividend on, or make any other distribution in respect of, any shares of its capital stock or otherwise make any payments to its stockholders in their capacity as such (other than dividends by a direct or indirect wholly owned Subsidiary of the Company to its parent); or (D) split, combine, subdivide or reclassify any shares of its capital stock;
(ii) incur or assume any indebtedness for borrowed money or guarantee any indebtedness (or enter into a “keep well” or similar agreement) or issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, other than (A) borrowings by the Company in the ordinary course of business under the Company’s existing credit agreement listed on behalf Section 3.13(a) of Pivotal the Company Disclosure Letter and guarantees of such borrowings issued by the Company’s Subsidiaries to the extent required under the terms of such credit facility, and (B) borrowings from the Company by a direct or its Subsidiaries for cash management purposes indirect wholly owned Subsidiary of the Company in the ordinary course of business consistent with Pivotal’s investment management policypast practice;
(iii) sell, transfer, lease, mortgage, encumber or otherwise dispose of or subject to any Lien (including pursuant to a sale-leaseback transaction or an asset securitization transaction) any of its properties or assets (including securities of Subsidiaries) with a fair market value in excess of $50,000 individually or $100,000 in the aggregate to any Person, except (A) sales of inventory in the ordinary course of business consistent with past practice, (B) pursuant to Contracts in force at the date of this Agreement and listed on Section 5.1(iii) of the Company Disclosure Letter, correct and complete copies of which have been made available to Parent, or (C) dispositions of obsolete or worthless assets;
(iv) make any capital expenditure or expenditures which (A) involves the purchase of real property or (B) is in excess of $100,000 individually or $400,000 in the aggregate;
(v) directly or indirectly acquire (A) by merging or consolidating with, or by purchasing all of or a substantial equity interest in, or by any other manner, any Person or division, business or equity interest of any Person or, (B) except in the case ordinary course of clause business consistent with past practice, any assets that, individually, have a purchase price in excess of $50,000 or, in the aggregate, have a purchase price in excess of $100,000;
(ii)vi) make any investment (by contribution to capital, acquisitions property transfers, purchase of inventorysecurities or otherwise) in, products or services loan or advance (other than travel and similar advances to its employees in the ordinary course of business consistent with past practice) to, any Person other than a direct or indirect wholly owned Subsidiary of the Company in the ordinary course of business; Table of Contents;
(evii) directly (A) enter into, terminate or indirectly sellamend any Material Contract, leaseor, licenseother than in the ordinary course of business consistent with past practice, sell any other Contract that is material to the Company and leasebackits Subsidiaries taken as a whole, abandon(B) enter into or extend the term or scope of any Contract that purports to restrict the Company, allow to lapseor any existing or future Subsidiary or Affiliate of the Company, mortgage or otherwise encumber or subject to from engaging in any Lien or otherwise dispose in whole line of business or in part any geographic area, (C) amend or modify the Engagement Letter, (D) enter into any Contract that would be breached by, or require the consent of any third party in order to continue in full force following, consummation of the Transactions, or (E) release any Person from, or modify or waive any provision of, any confidentiality, standstill or similar agreement;
(viii) increase in any manner the compensation or benefits of any of its material propertiescurrent or former directors, assets officers, consultants or rights (including any material Pivotal Intellectual Property Registrations) employees of the Company or any interest thereinof its Subsidiaries or enter into, exceptestablish, amend or terminate any employment, consulting, retention, change in each casecontrol, collective bargaining, bonus or other incentive compensation, profit sharing, health or other welfare, stock option or other equity (i) salesor equity-based), pledgespension, dispositionsretirement, transfersvacation, abandonmentsseverance, leasesdeferred compensation or other compensation or benefit plan, licensespolicy, lapsesagreement, expirationstrust, fund or arrangement with, for or in respect of, any stockholder or current or former director, officer, employee, or encumbrances consultant of the Company or any of its Subsidiaries, other than (A) as required pursuant to be effected applicable Law or the terms of the agreements set forth on Section 5.1(viii) of the Company Disclosure Letter (correct and complete copies of which have been made available to Parent prior to the Effective Time pursuant date of this Agreement) or with respect to existing Contracts that are not material to Pivotal (B) increases in salaries, wages and its Subsidiaries, taken as benefits of employees (other than officers) made in the ordinary course of business and in amounts and in a whole and (ii) Ordinary Course Licenses Outmanner consistent with past practice;
(fix) make, change or revoke any material election concerning Taxes or Tax Returns, file any amended Tax Return, file any Tax Return not prepared in accordance with past practice, enter into any closing agreement with respect to Taxes, settle any material Tax claim or assessment or surrender any right to claim a refund of Taxes or obtain any Tax ruling;
(x) make any changes in financial or Tax accounting methods, principles or practices (or change an annual accounting period), except insofar as may be required by a change in GAAP or applicable Law;
(xi) amend the Company Charter Documents or the Subsidiary Documents;
(xii) adopt or enter into a plan or agreement of complete or partial liquidation, dissolution, restructuring, recapitalization recapitalization, merger, consolidation or other reorganizationreorganization (other than transactions exclusively between wholly owned Subsidiaries of the Company);
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, other than Pivotal or any direct or indirect wholly owned Subsidiary of Pivotal;
(i) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto that in the aggregate are in excess of $1,000,000;
(j) except as required by any judgment by a court of competent jurisdiction, (ixiii) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge discharge, settlement or satisfaction in the ordinary course of business, (B) as required by accordance with their terms as in effect on the date of this Agreement of claimsliabilities, liabilities claims or obligations reflected or reserved against in the most recent audited consolidated financial statements (or the notes thereto) of Pivotal the Company included in the Pivotal Filed Company SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements in the ordinary course of business, (ii) cancel any material Indebtedness owed to Pivotal or any of its Subsidiaries, or (iii) waive, release, grant or transfer any right of material valuebusiness consistent with past practice;
(kxiv) issue any broadly distributed communication of a general nature to employees (i) materially modify, materially amend, terminate, cancel, waive any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of businessincluding general communications relating to benefits and compensation) or (ii) enter into any Contract that if in effect on customers without the date hereof would be a Material Contractprior approval of Parent, other than customer contracts entered into in the ordinary course of business;
(l) commence any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal or any of its Subsidiaries), or compromise, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements except for communications in the ordinary course of business that involve only do not relate to the payment of money damages not in excess of $500,000 individually or $2,000,000 in the aggregate, in any case without the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal or any of its SubsidiariesTransactions;
(m) change its financial or Tax accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law;
(nxv) settle or compromise any litigation or proceeding material liability for Taxes to the Company and its Subsidiaries taken as a whole (this covenant being in addition to the Company’s agreement set forth in Section 5.8 hereof); or
(xvi) agree, in writing or surrender otherwise, to take any of the foregoing actions, or take any action or agree, in writing or otherwise, to take any action which would (A) cause any of the representations or warranties of the Company set forth in this Agreement (1) that are qualified as to materiality or Company Material Adverse Effect to be untrue or (2) that are not so qualified to be untrue in any material claim for a refund of Taxes; file any amended Tax Return respect, or claim for Tax refund; make, revoke or modify (B) in any material Tax election, respect impede or change delay the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liability; consent to any extension or waiver ability of the limitation period applicable parties to satisfy any claim of the conditions to the Offer or assessment the Merger set forth in respect of a material amount of Taxes; grant any power of attorney with respect to material Taxes; enter into any Tax Sharing this Agreement or any closing agreement or other similar agreement; or change any method of accounting for Tax purposes;(including Annex A hereto).
Appears in 2 contracts
Samples: Agreement and Plan of Merger (Quixote Corp), Merger Agreement (Quixote Corp)
Conduct of Business. During Except as provided in this Agreement, until the period from earlier of Closing or the date termination of this Agreement to the Effective Timein accordance with its terms, except as consented to in writing in advance by VMware or as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) by this Agreement, Pivotal shallNCNG shall conduct, and shall cause each of its the Subsidiaries toto conduct, carry on and shall use commercially reasonable efforts to cause ENCNG to conduct, its business in the ordinary coursecourse in a manner consistent with past practices and to use its reasonable efforts to preserve its properties, including business and relationships with its development suppliers and sales efforts as currently contemplatedcustomers. NCNG will advise, and shall cause the Subsidiaries to advise, and shall use commercially reasonable efforts to (i) preserve intact its business organizationcause ENCNG to advise, assetsthe Buyer promptly in writing of any development having a Material Adverse Effect on NCNG and the Subsidiaries, rights and propertiestaken as a whole, (ii) keep available the services of its current officers, employees and consultants and (iii) preserve its goodwill and its relationships with customers, suppliers, licensors, licensees, distributors and others having material business dealings with itor on ENCNG. In addition to and without Without limiting the generality of the foregoing, during until the period from earlier of Closing or the date termination of this Agreement to the Effective Timein accordance with its terms, except (x) as set forth provided in section 5.1 this Agreement, without the written consent of the Pivotal Disclosure LetterBuyer, (y) as specifically required by this Agreement or (z) as specifically required by applicable Law, Pivotal shall NCNG will not, and shall will cause the Subsidiaries not permit any of its Subsidiaries, without VMware’s prior written consent (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall not be unreasonably withheld, conditioned or delayedto, and in all other cases shall be in VMware’s sole discretion), will use commercially reasonable efforts to cause ENCNG not to:
(a) (i) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock dividend or other equity interests, except for dividends by a wholly owned Subsidiary of Pivotal to Pivotal or any other wholly owned Subsidiary of Pivotal, (ii) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations distribution with respect to awards granted its capital stock, or, as to ENCNG, except as may be otherwise provided in the articles of incorporation of ENCNG, its preferred stock;
(b) (i) create, incur or assume any indebtedness for borrowed money, except pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, credit agreements in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms existence on the date of this Agreement, or (iiiii) split, combine, reclassify or otherwise amend the terms of any of its capital stock or other equity 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 other equity interests;
(b) issue, deliver, sell, grantmortgage, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) any shares of its capital stock properties or other equity interests assets, except for Permitted Liens or any securities convertible into, exchangeable for (iii) create or exercisable for any such shares or other equity interests, or any rights, warrants or options to acquire, any such shares or other equity interests, or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive shares of capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof (other than the issuance of Class A Shares upon the exercise of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPP, in each case, that are outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with their terms as in effect on such date);
(c) amend or otherwise change, or authorize or propose to amend or otherwise change, its certificate of incorporation or bylaws (or similar organizational documents);
(d) directly or indirectly acquire or agree to acquire (i) by merging or consolidating with, purchasing a substantial equity interest in or a substantial portion of the assets of, making an investment in or loan or capital contribution to or in assume any other manner, any corporation, partnership, association or indebtedness except accounts payable and other business organization or division thereof or (ii) any assets that are otherwise material to Pivotal and its Subsidiaries, except, in each case, for (1) capital expenditures which shall be subject to the limitations of clause (i) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes in the ordinary course of business consistent with Pivotal’s investment management policy, and except in the case of clause (ii), acquisitions of inventory, products or services liabilities incurred in the ordinary course of business; Table of Contents;
(ec) directly issue any shares of capital stock of any class or indirectly sellgrant any warrants, leaseoptions or rights to subscribe for any shares of capital stock of any class or securities convertible into or exchangeable for, licenseor which otherwise confer on the holder any right to acquire, any shares of capital stock of any class, or split, combine or reclassify any shares of its capital stock;
(d) sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien or otherwise dispose in whole or in part of any of its material assets or properties, assets or rights (including any material Pivotal Intellectual Property Registrations) or any interest therein, except, in each case, other than sales and dispositions (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Out;
(f) adopt or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, other than Pivotal or any direct or indirect wholly owned Subsidiary of Pivotal;
(i) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto that in the aggregate are in excess of $1,000,000;
(j) except as required by any judgment by a court of competent jurisdiction, (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge or satisfaction in the ordinary course of business, (B) as required by their terms as in effect on the date of this Agreement of claims, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements in the ordinary course of business, (ii) cancel any material Indebtedness owed to Pivotal of obsolete or any of its Subsidiariessurplus assets, or and (iii) waivein connection with the normal repair and/or replacement of assets or properties, release, grant or transfer any right of material valueproperty losses covered by insurance;
(ke) (i) materially modify, materially amend, terminate, cancel, waive amend in any material right under respect, terminate or extend assign any Material Contract Contract;
(f) make any individual capital expenditures of more than $150,000, or aggregate capital expenditures of more than $1,500,000, other than renewals of Contracts with customers of Pivotal Products in the ordinary course or business, or to repair any damaged property;
(g) assume, guarantee, endorse or otherwise become responsible for the obligations of business) any other Person, or (ii) enter into make loans or advances to any Contract that if in effect on the date hereof would be a Material Contractother Person, other than customer contracts entered into except in the ordinary course of business;
(lh) commence grant any Legal Proceeding (individual or general increase in the compensation of any employees other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal normal merit or any of its Subsidiaries), or compromise, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements promotional increases in the ordinary normal course of business that involve only or as required by an existing agreement, or create any new Employee Benefit Plan or, except as set forth in Schedule 6.4, extend, modify or change in any material respect (except as may be required by applicable law) any Employee Benefit Plan or terminate any existing Employee Benefit Plan;
(i) enter into any Contracts with Affiliates or any material Contract other than material Contracts to be fully performed by the payment Closing Date, material Contracts terminable on not more than 90 days' notice, or material Contracts implementing another provision of money damages not this Section 6.1;
(j) alter in excess of $500,000 individually any material way the manner in which it has regularly and customarily maintained its book and account and record;
(k) hire any new employees for positions at or $2,000,000 in above the aggregate"manager" level unless to replace an employee vacancy;
(l) fail to comply, in any case without the imposition all material respects, with all applicable Laws and with all orders of any equitable relief onGovernmental Authority, non-compliance with which would cause a Material Adverse Change in its assets or the admission of wrongdoing by, Pivotal properties or any of have a Material Adverse Effect on its Subsidiaries;business; or
(m) change amend its financial articles of incorporation, bylaws or Tax accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law;
(n) settle or compromise any material liability for Taxes or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax electionother organizational documents, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis consistent merge or consolidate with past practice that would materially and adversely affect its Tax liability; consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of a material amount of Taxes; grant any power of attorney with respect to material Taxes; enter into any Tax Sharing Agreement or any closing agreement or other similar agreement; or change any method of accounting for Tax purposes;corporation.
Appears in 2 contracts
Samples: Stock Purchase Agreement (Piedmont Natural Gas Co Inc), Stock Purchase Agreement (Progress Energy Inc)
Conduct of Business. During the period from From the date of this Agreement through the earlier of the Closing or valid termination of this Agreement pursuant to Article X (the Effective Time“Interim Period”), except as consented to in writing in advance by VMware or as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) by this Agreement, Pivotal Company shall, and shall cause each of its Subsidiaries to, carry on its except as otherwise explicitly contemplated by this Agreement (including the Company Recapitalization) or the Ancillary Agreements or required by Law or as consented to by Acquiror in writing (which consent shall not be unreasonably conditioned, withheld, delayed or denied), use reasonable best efforts to operate the business of the Company in the ordinary coursecourse consistent with past practice, including its development and sales efforts as currently contemplatedother than due to any actions taken in compliance with any “shelter-in-place,” “non-essential employee” or similar order or direction of any Governmental Authority, and use commercially reasonable efforts to (i) preserve intact maintain each of the Company’s and its Subsidiaries’ business organization, assets, rights and properties, (ii) keep available to retain the services of its current officersofficers and Key Employees, employees and consultants and (iii) to preserve goodwill of its goodwill and its relationships with customers, suppliers, licensors, licensees, distributors suppliers and others having other Persons with whom it has significant business relationships and to maintain its properties and assets in all material business dealings with itrespects. In addition to and without Without limiting the generality of the foregoing, during the period from the date of this Agreement to the Effective Time, except (x) as set forth in section 5.1 on Section 6.1 of the Pivotal Company Disclosure LetterLetter or as consented to by Acquiror in writing (which consent shall not be unreasonably conditioned, (ywithheld, delayed or denied) as specifically required by this Agreement or (z) as specifically required by applicable Law, Pivotal the Company shall not, and the Company shall cause its Subsidiaries not permit any of its Subsidiariesto, without VMware’s prior written consent except as otherwise contemplated by this Agreement (which consent, in including the cases of the matters set forth in subclauses (e), (g), (i), (jCompany Recapitalization) or (k) below shall not be unreasonably withheld, conditioned the Ancillary Agreements or delayed, and in all other cases shall be in VMware’s sole discretion), torequired by Law:
(a) change or amend the Governing Documents of the Company or any of the Company’s Subsidiaries or form or cause to be formed any new Subsidiary of the Company;
(ib) declare, set aside make or pay declare any dividends on, dividend or distribution to the stockholders of the Company or make any other distributions (whether in cash, stock or property) in respect of, of any of the Company’s or any of its Subsidiaries’ capital stock or other equity interests, except for dividends and distributions by a wholly owned Subsidiary of Pivotal the Company to Pivotal the Company or any other another wholly owned Subsidiary of Pivotalthe Company;
(c) split, combine, reclassify, recapitalize or otherwise amend any terms of any shares or series of the Company’s or any of its Subsidiaries’ capital stock or equity interests, except for any such transaction by a wholly owned Subsidiary of the Company that remains a wholly owned Subsidiary of the Company after consummation of such transaction;
(iid) purchase, repurchase, redeem or otherwise acquire any issued and outstanding share capital, outstanding shares of capital stock stock, membership interests or other equity interests of Pivotal the Company or its Subsidiaries or any optionsSubsidiaries, warrants, or rights to acquire any such shares or other equity interests, other than except for (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (Bi) the acquisition by Pivotal the Company or any of Pivotal Options its Subsidiaries of any shares of capital stock, membership interests or Pivotal RSUs on other equity interests of the date of this Agreement Company or as permitted by this Agreement its Subsidiaries in connection with the forfeiture or cancellation of such awardsinterests and (ii) transactions between the Company and any wholly owned Subsidiary of the Company or between wholly owned Subsidiaries of the Company;
(e) enter into, modify in any material respect or terminate (other than expiration in accordance with their terms on the date of this Agreement, or (iii) split, combine, reclassify or otherwise amend the terms of any of its capital stock or other equity 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 other equity interests;
(b) issue, deliver, sell, grant, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Lawsterms) any shares Contract of its capital stock a type required to be listed on Section 4.13 or other equity interests or any securities convertible into, exchangeable for or exercisable for any such shares or other equity interestsSection 4.30 of the Company Disclosure Letter, or any rights, warrants or options to acquire, any such shares or other equity interests, or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive shares of capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof (other than the issuance of Class A Shares upon the exercise of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPPReal Property Lease, in each case, that are outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with their terms as in effect on such date);
(c) amend or otherwise change, or authorize or propose to amend or otherwise change, its certificate of incorporation or bylaws (or similar organizational documents);
(d) directly or indirectly acquire or agree to acquire (i) by merging or consolidating with, purchasing a substantial equity interest in or a substantial portion of the assets of, making an investment in or loan or capital contribution to or in any other manner, any corporation, partnership, association or other business organization or division thereof or (ii) any assets that are otherwise material to Pivotal and its Subsidiaries, except, in each case, for (1) capital expenditures which shall be subject to the limitations of clause (i) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes than in the ordinary course of business consistent with Pivotal’s investment management policypast practice or as required by Law;
(f) sell, assign, transfer, convey, lease or otherwise dispose of any material tangible assets or properties of the Company or its Subsidiaries, except for (i) dispositions of obsolete or worthless equipment and except in the case of clause (ii)) transactions among the Company and its wholly owned Subsidiaries or among its wholly owned Subsidiaries;
(g) acquire any ownership interest in any real property;
(h) except as otherwise required by Law or the terms of any Company Benefit Plan as in effect on the date hereof, acquisitions or the terms of inventoryany Key Employee Employment Agreement, products (i) grant any severance, retention, change in control or services termination or similar pay to any current or former employee, officer, director or other individual service provider, except, with respect to severance, termination, or similar pay to any employee whose employment terminated after the date hereof, in the ordinary course of business; Table business (ii) terminate, adopt, enter into or materially amend any Company Benefit Plan, (iii) increase the cash compensation, bonus opportunity or employee benefits of Contents
any employee, officer, director or other individual service provider, except in the ordinary course of business consistent with past practice or as required or permitted under any Company Benefit Plan or other employment or consulting agreement in effect as of the date hereof, (eiv) directly establish any trust or indirectly sell, lease, license, sell and leaseback, abandon, allow take any other action to lapse, mortgage secure the payment of any compensation payable by the Company or otherwise encumber any of the Company’s Subsidiaries or subject (v) take any action to amend or waive any Lien performance or otherwise dispose in whole vesting criteria or in part to accelerate the time of payment or vesting of any compensation or benefit payable by the Company or any of its material propertiesSubsidiaries (for clarity, assets or rights (including any material Pivotal Intellectual Property Registrations) or any interest therein, except, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Out;
(f) adopt or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, other than Pivotal or any direct or indirect wholly owned Subsidiary of Pivotal;
(i) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto that in the aggregate are in excess of $1,000,000;
(j) except as required by any judgment by a court of competent jurisdiction, (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than Company may (A) change the payment, discharge or satisfaction title of any employee in the ordinary course of business, and (B) as required by their terms as in effect on the date of this Agreement of claims, liabilities make annual or obligations reflected quarterly bonus or reserved against in the most recent audited financial statements (or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements commission payments in the ordinary course of business, business and in accordance with the bonus or commission plans existing as of the date of this Agreement);
(iii) cancel terminate any material Indebtedness owed to Pivotal employee of the Company or any of its SubsidiariesSubsidiaries whose individual base compensation exceeds $180,000 other than for cause;
(j) acquire by merger or consolidation with, or (iii) waivemerge or consolidate with, releaseor purchase substantially all or a material portion of the assets of, grant any corporation, partnership, association, joint venture or transfer any right of material valueother business organization or division thereof;
(k) make any material loans or material advances to any Person, except for (i) materially modifyadvances to employees, materially amendofficers or independent contractors of the Company or any of the Company’s Subsidiaries for indemnification, terminateattorneys’ fees, cancel, waive any material right under or extend any Material Contract (travel and other than renewals of Contracts with customers of Pivotal Products expenses incurred in the ordinary course of business) or business consistent with past practice, (ii) enter into any Contract that if loans or advances among the Company and its wholly owned Subsidiaries or among the wholly owned Subsidiaries incurred in effect on the date hereof would be a Material Contract, other than customer contracts entered into ordinary course of business consistent with past practice and (iii) extended payment terms for customers in the ordinary course of business;
(l) commence (i) make or change any Legal Proceeding material election in respect of material Taxes, (other than a Legal Proceeding ii) materially amend, modify or otherwise change any filed material Tax Return, (iii) adopt or request permission of any taxing authority to change any accounting method in respect of material Taxes, (iv) enter into any “closing agreements” as a result described in Section 7121 of a Legal Proceeding commenced against Pivotal the Code (or any similar provision of its Subsidiaries)state, local, or compromiseforeign Law) with any Governmental Authority in respect of material Taxes, settle or agree to (v) settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements claim or agreements assessment in the ordinary course respect of business that involve only the payment of money damages not in excess of $500,000 individually or $2,000,000 in the aggregate, in any case without the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal or any of its Subsidiaries;
material Taxes (mvi) change its financial or Tax accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law;
(n) settle or compromise any material liability for Taxes or affirmatively surrender any material right to claim for a refund of Taxes; file any amended Tax Return material Taxes or claim for Tax refund; make, revoke or modify any material Tax election, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liability; (vii) consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of material Taxes (other than pursuant to extensions of time to file Tax Returns obtained in the ordinary course of business);
(m) (i) incur or assume any Indebtedness or guarantee any Indebtedness of another Person, issue or sell any debt securities or warrants or other rights to acquire any debt securities of the Company or any Subsidiary of the Company or guarantee any debt securities of another Person, other than any Indebtedness or guarantee (x) incurred in the ordinary course of business and in an aggregate amount not to exceed $1,000,000, (y) incurred between the Company and any of its wholly owned Subsidiaries or between any of such wholly owned Subsidiaries; or (ii) discharge any secured or unsecured obligation or liability (whether accrued, absolute, contingent or otherwise) which individually or in the aggregate exceed $500,000, except as otherwise contemplated by this Agreement or as such obligations become due;
(n) issue any additional shares of Company Capital Stock or securities exercisable for or convertible into Company Capital Stock, other than (i) the issuance of Company Common Shares upon the exercise or settlement of Company Options or Company RSU Awards, as applicable, outstanding on the date of this Agreement, and (ii) the grant of Company RSU Awards promised but ungranted as of the date of the Agreement, including evidencing such awards with appropriate award agreements;
(o) adopt a plan of, or otherwise enter into or effect a, complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of the Company or its Subsidiaries (other than the Merger);
(p) waive, release, settle, compromise or otherwise resolve any inquiry, investigation, claim, Action, litigation or other Legal Proceedings, except in the ordinary course of business or where such waivers, releases, settlements or compromises involve only the payment of monetary damages in an amount less than $300,000 in the aggregate;
(q) dispose of, abandon or permit to lapse any rights to any Company Intellectual Property that is material to the Company and its Subsidiaries, taken as a whole, except for the expiration of Company Registered Intellectual Property in accordance with the applicable statutory term (or in the case of domain names, applicable registration period);
(r) disclose or agree to disclose to any Person (other than Acquiror or any of its representatives) any trade secret or any other material confidential or proprietary information, know-how or process of the Company or any of its Subsidiaries, in each case other than in the ordinary course of business consistent with past practice and pursuant to obligations to maintain the confidentiality thereof;
(s) make or commit to make capital expenditures other than in an amount not in excess of Taxes; the amount set forth on Section 6.1(s) of the Company Disclosure Letter, in the aggregate;
(t) manage the Company’s and its Subsidiaries’ working capital (including paying amounts payable in a timely manner when due and payable) in a manner other than in the ordinary course of business consistent with past practice;
(u) permit any item of Company Intellectual Property that is material to the Company and its subsidiaries, taken as a whole, to become subject to a Lien (other than a Permitted Lien) or sell, assign, transfer, pledge, lease or license to any third Person any Company Intellectual Property that is material to the Company and its subsidiaries, taken as a whole, other than non-exclusive licenses granted to customers in the ordinary course of business;
(v) other than as required by applicable Law, enter into or extend any collective bargaining agreement or similar labor agreement, or recognize or certify any labor union, labor organization, or group of employees of the Company or its Subsidiaries as the bargaining representative for any employees of the Company or its Subsidiaries;
(w) terminate without replacement or fail to use reasonable efforts to maintain any Permit material to the conduct of the business of the Company and its Subsidiaries, taken as a whole;
(x) waive the restrictive covenant obligations of any current or former employee of the Company or any of the Company’s Subsidiaries;
(y) (i) limit the right of the Company or any of the Company’s Subsidiaries to engage in any line of business or in any geographic area, to develop, market or sell products or services, or to compete with any Person or (ii) grant any power exclusive or similar rights to any Person, in each case, except where such limitation or grant does not, and would not be reasonably likely to, individually or in the aggregate, materially and adversely affect, or materially disrupt, the ordinary course operation of attorney with respect the businesses of the Company and the Company Subsidiaries, taken as a whole;
(z) amend in a manner materially detrimental to the Company or any of the Company’s Subsidiaries, terminate, permit to lapse or fail to use reasonable best efforts to maintain, reinstate or replace any material TaxesGovernmental Authorization or material Permit required for the conduct of the business of the Company or any of the Company’s Subsidiaries;
(aa) terminate or amend in a manner materially detrimental to the Company or any of the Company’s Subsidiaries any material insurance policy insuring the business of the Company or any of the Company’s Subsidiaries;
(bb) take any action, or knowingly fail to take any action, where such action or failure to act could reasonably be expected to prevent the Merger from qualifying for the Intended Tax Treatment; or
(cc) enter into any Tax Sharing Agreement agreement to do any action prohibited under this Section 6.1. Nothing contained herein shall be deemed to give to the Acquiror, directly or any closing agreement indirectly, rights to control or other similar agreement; or change any method direct the operations of accounting for Tax purposes;the Company prior to the Closing Date in a manner which may violate the HSR Act.
Appears in 2 contracts
Samples: Merger Agreement (Xos, Inc.), Merger Agreement (NextGen Acquisition Corp)
Conduct of Business. During (a) Conduct of Business by the Company. Except as required by applicable Law or provided in Section 5.01(a) of the Company Disclosure Letter or otherwise expressly permitted by this Agreement, during the period from the date of this Agreement to the Effective Time, except as consented to in writing in advance by VMware or as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) by this Agreement, Pivotal Company shall, and shall cause each of its Subsidiaries to, carry on its business in the ordinary coursecourse consistent with past practice, including and, to the extent consistent therewith, use its development and sales efforts as currently contemplated, and use commercially reasonable efforts to (i) preserve intact its current business organizationorganizations, assets, rights and properties, (ii) keep available the services of its current officers, employees and consultants and (iii) preserve its goodwill and its relationships with customers, Providers, producers, members, Governmental Authorities, suppliers, licensors, licensees, distributors and others having material business dealings with itit with the intention that its goodwill and ongoing business shall not be materially impaired at the Effective Time. In addition to and without Without limiting the generality of the foregoing, during the period from the date of this Agreement to the Effective Time, except (x) as set forth in section 5.1 of the Pivotal Disclosure Letter, (y) as specifically required by this Agreement or (z) as specifically required by applicable Law (it being understood that the Company shall give prompt notice to Parent of any action taken by the Company or its Subsidiaries that would otherwise be restricted by clauses (i) through (xviii) of this Section 5.01 but for such applicable Law) or provided in Section 5.01(a) of the Company Disclosure Letter and except as expressly contemplated by this Agreement, Pivotal the Company shall not, and shall not permit any of its SubsidiariesSubsidiaries to, without VMware’s Parent's prior written consent (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below which shall not be unreasonably withheld, conditioned withheld or delayed, and in all other cases shall be in VMware’s sole discretion), to:
(ai) (iA) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock stock, other than dividends or other equity interests, except for dividends distributions by a wholly direct or indirect wholly-owned Subsidiary of Pivotal the Company to Pivotal or any other wholly owned Subsidiary of Pivotalits parent, (ii) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii) split, combine, combine or reclassify or otherwise amend the terms of any of its capital stock or other equity 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 (C) purchase, redeem or otherwise acquire any shares of its capital stock or any other equity interestssecurities thereof or any rights, warrants or options to acquire any such shares or other securities;
(bii) issue, deliver, sell, grant, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) any shares of its capital stock or stock, any other equity interests voting securities or any securities convertible into, exchangeable for or exercisable for any such shares or other equity interests, or any rights, warrants or options to acquire, any such shares shares, voting securities or other equity interestsconvertible securities, or any stock appreciation rights"phantom" stock, “"phantom” " stock rights, stock appreciation rights or stock based performance units, rights to receive units (other than (A) the issuance of shares of capital stock Company Common Stock upon the exercise of VMware Company Stock Options outstanding on a deferred basis the date hereof or other rights linked granted after the date hereof in accordance with clause (B) below, in either case in accordance with their terms on the date hereof (or on the date of grant, if later), (B) the grant of options or Company Restricted Shares to employees hired or promoted within sixty (60) days prior to, or anytime after, the date hereof to acquire shares of Company Common Stock, as permitted by Section 5.01(a)(ii) of the Company Disclosure Letter or the crediting of Company DSUs and Company RSUs pursuant to the value terms of Class A Shares or Class B Shares, including pursuant to Contracts the Company Deferred Stock Plans as in effect on the date hereof (other than hereof, in accordance with the Company's ordinary course of business consistent with past practice, or, in the event that the Effective Time occurs in 2006, ordinary course grant of options or issuance of Class A Shares restricted stock under the Company Stock Plans to employees and directors permitted by Section 5.01(a)(ii) of the Company Disclosure Letter, (C) upon the exercise conversion of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPPConvertible Debentures, in each case, that are outstanding on the date of this Agreement and Made Available to VMware in accordance with the terms thereof, (D) the issuance of shares of Company Common Stock in settlement of Company DSUs and otherwise Company RSUs outstanding on the date hereof or credited after the date hereof in accordance with clause (B) above, in either case, in accordance with their terms on the date hereof or (E) the issuance of shares of Company Common Stock under the Company's 2001 Employee Stock Purchase Plan, as amended, in effect on such dateaccordance with the terms thereof);
(ciii) amend the Company Certificate or otherwise change, the Company By-laws or authorize the comparable charter or propose to amend or otherwise change, organizational documents of any of its certificate of incorporation or bylaws (or similar organizational documents)Subsidiaries;
(div) directly or indirectly acquire or agree to acquire (iA) by merging or consolidating with, or by purchasing all of or a substantial equity interest in in, or a substantial portion of the assets of, making an investment in or loan or capital contribution to or in by any other manner, any corporationdivision, partnership, association business or other business organization or division thereof equity interest of any person or (iiB) any assets forming part of such a division or business that are otherwise material to Pivotal and its Subsidiaries, except, have a purchase price in each case, for excess of one million dollars (1$1,000,000) capital expenditures which shall be subject to the limitations of clause individually or two million dollars (i$2,000,000) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes in the ordinary course of business consistent with Pivotal’s investment management policy, and except in the case of clause (ii), acquisitions of inventory, products or services in the ordinary course of business; Table of Contentsaggregate;
(ev) directly or indirectly sell, lease, license, mortgage, sell and leaseback, abandon, allow to lapse, mortgage leaseback or otherwise encumber or subject to any Lien or otherwise dispose in whole or in part of any of its material properties, properties or other assets with a fair market value in excess of three million dollars ($3,000,000) individually or rights seven million five hundred thousand dollars (including any material Pivotal Intellectual Property Registrations$7,500,000) or any interest therein, except, in each casethe aggregate to a third party (except (A) by incurring Permitted Liens, (iB) saleswith respect to properties or other assets no longer used in the operation of the Company's business, pledgesand/or (C) in the ordinary course of business);
(vi) with respect to the Company's 2005 fiscal year, dispositionsmake any capital expenditure or expenditures not budgeted for in the Company's 2005 fiscal year capital expenditure plan, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required a correct and complete copy of which shall have been provided to be effected Parent prior to the Effective Time date of this Agreement, which (A) involves the purchase of any real property or (B) is in excess of three million dollars ($3,000,000) individually or seven million five hundred thousand dollars ($7,500,000) in the aggregate;
(vii) with respect to the Company's 2006 fiscal year, make any capital expenditure or expenditures of amounts in excess of the amounts of capital expenditures set forth in Section 5.01(a)(vii) of the Company Disclosure Letter;
(viii) (A) repurchase or prepay any indebtedness for borrowed money except as required by the terms of such indebtedness, (B) other than debt incurrence pursuant to any credit facility or line of credit existing Contracts that are not material prior to Pivotal and the date hereof, incur any indebtedness for borrowed money or guarantee any such indebtedness of another person or issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Out;
(f) adopt guarantee any debt securities of another person, enter into any "keep well" or other agreement to maintain any financial statement condition of another person or enter into a plan any arrangement having the economic effect of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay any of the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness foregoing or (iiC) make any loans, advances or capital contributions to, or investments in, any other Personperson in excess of $375,000 in the aggregate, other than Pivotal in the Company or in or to any direct or indirect wholly wholly-owned Subsidiary of Pivotalthe Company and other than any advance treated as a loan to any Provider in the ordinary course of business;
(iix) incur other than claims, liabilities or commit to incur any capital expenditure or authorization or commitment with respect thereto obligations that in may be settled by the aggregate are in excess Company without the consent of $1,000,000;
(j) except as required by any judgment by a court of competent jurisdictionParent under Section 6.10, (i) pay, discharge, settle or satisfy any claimsclaims (including claims of stockholders), liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise)) relating to any litigations, other than (A) mediations, arbitrations or investigations, except for the payment, discharge discharge, settling or satisfaction in the ordinary course of business, (B) as required by their terms as in effect on the date of this Agreement of any claims, liabilities or obligations reflected relating to any pending or reserved against threatened litigations, mediations, arbitrations and investigations in amounts in the most recent audited financial statements (aggregate that are equal to or less than the notes theretoamount set forth in Section 5.01(a)(ix) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) Company Disclosure Letter or (C) incurred since the date of such financial statements in the ordinary course of business, (ii) cancel pay, discharge, settle or satisfy any claims, liabilities or obligations relating to any litigations, mediations, arbitrations or investigations involving any material Indebtedness owed to Pivotal limitation on, or any material change in, the conduct of the business of the Company or its Subsidiaries or (iii) waive or release any right of the Company or any of its Subsidiaries, or (iii) waive, release, grant or transfer any right Subsidiaries with a value in excess of material value;
(k) (i) materially modify, materially amend, terminate, cancel, waive any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (ii) enter into any Contract that if in effect on the date hereof would be a Material Contract$375,000, other than customer contracts entered into waivers of rights with respect to Providers, brokers or customers in the ordinary course of business;
(lA) commence modify, amend or terminate any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal the Largest Customer Contracts, the Largest Provider Contracts, the Largest Broker Contracts or any of its Subsidiaries)the Medicare Advantage Contracts except for non-material modifications, terminations or compromise, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements amendments made in the ordinary course of business or modifications, terminations or amendments which in the aggregate would not materially and adversely effect the value of the Company's network; (B) enter into, modify, amend or terminate (1) any Contract which if so entered into, modified, amended or terminated would reasonably be expected to (x) have a Company Material Adverse Effect, (y) impair in any material respect the ability of the Company to perform its obligations under this Agreement or (z) prevent or materially delay the consummation of any of the transactions contemplated by this Agreement, (2) any Contract not covered by (A) above that involve only involves the payment Company or any of money damages not its Subsidiaries incurring a liability in excess of three million dollars ($500,000 3,000,000) individually or seven million five hundred thousand dollars ($2,000,000 7,500,000) in the aggregate, and that is not terminable by the Company without penalty with one year or less notice (excluding Contracts or amendments entered into or made in the ordinary course of business with customers or Providers of the Company or its Subsidiaries and terminations in the ordinary course of business of Contracts with customers or Providers of the Company or its Subsidiaries), (3) any Contract by which the Company or any of its Subsidiaries grants any license to Company Intellectual Property other than intracompany grants of licenses or (4) any covenant in a Contract restricting the ability of the Company or any of its Subsidiaries (or which, following the consummation of the Merger, would restrict the ability of Parent or any of its Subsidiaries, including the Surviving Entity and its Subsidiaries) to compete in any case business or with any person or in any geographic area, (it being agreed and acknowledged by the parties that this clause (4) shall not cover Medicare Provider Contracts and Medicare Contracts containing exclusivity provisions made in the ordinary course of business); or (C) except as required by this Agreement, modify or amend the Rights Agreement;
(xi) enter into any Contract which if in effect as of the date hereof would be required to be disclosed pursuant to Section 3.10(b) hereof (other than Contracts required to be disclosed pursuant to Section 3.10(b)(v)) to the extent consummation of the transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement would reasonably be expected to conflict with, or result in a violation or breach of, or default (with or without the imposition notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any equitable relief onobligation or to a loss of a benefit under, or result in the admission creation of wrongdoing byany Lien other than a Permitted Lien in or upon any of the properties or other assets of the Company or any of its Subsidiaries under, Pivotal or give rise to any increased, additional, accelerated or guaranteed right or entitlement of any third party under, or result in any material alteration of, any provision of such Contract;
(xii) except as required to comply with applicable Law or any Contract or Company Plan disclosed in Section 3.12 of the Company Disclosure Letter, (A) increase in any manner the compensation or fringe benefits of, or pay any bonus to, any current or former director, officer, employee or consultant of the Company or any of its Subsidiaries (except in the ordinary course of business and except for the payment of pro rata bonuses to employees of the Company and its Subsidiaries in respect of fiscal year 2005 or 2006, as the case may be, immediately prior to the Effective Time as set forth in Section 6.11(a) of the Company Disclosure Letter and, in addition, if the Effective Time occurs in 2006, except for the payment of bonuses in respect of the 2005 fiscal year on the date such bonuses are ordinarily paid by the Company or, if earlier, immediately prior to the Effective Time), (B) pay to any current or former director, officer, employee or consultant of the Company or any of its Subsidiaries any benefit not provided for under any Contract or Company Plan other than the payment of cash compensation in the ordinary course of business consistent with past practice, (C) grant any awards under any Company Plan (including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units, restricted stock units, or restricted stock or the removal of existing restrictions in any Contract or Company Plan or awards made thereunder), except for the grant of options and restricted stock to employees hired or promoted within sixty days prior to, or any time after, the date hereof, as permitted by Section 5.01(a)(ii) of the Company Disclosure Letter or the crediting of Company DSUs and Company RSUs pursuant to the terms of the Company Deferred Stock Plans as in effect on the date hereof, in accordance with the Company's ordinary course of business consistent with past practice, (D) take any action to fund or in any other way secure the payment of compensation or benefits under any Contract or Company Plan (except for the funding, immediately prior to the Effective Time, of the rabbi trust maintained by the Company listed in Section 3.12 of the Company Disclosure Letter as provided by Section 5.01(a)(xii) of the Company Disclosure Letter), (E) exercise any discretion to accelerate the vesting or payment of any compensation or benefit under any Contract or Company Plan, (F) materially change any actuarial or other assumption used to calculate funding obligations with respect to any Company Plan or change the manner in which contributions to any Company Plan are made or the basis on which such contributions are determined or (G) adopt any new employee benefit plan or arrangement or amend, modify or terminate any existing Company Plan, in each case for the benefit of any current or former director, officer, employee or consultant of the Company or any of its Subsidiaries, other than required by applicable Law or tax qualification requirement or as necessary or advisable to comply with the requirements of Section 409A of the Code;
(xiii) adopt or enter into any collective bargaining agreement or other labor union contract applicable to the employees of the Company or any of its Subsidiaries;
(mxiv) fail to use reasonable efforts to maintain existing material insurance policies or comparable replacement policies to the extent available for a similar reasonable cost;
(xv) change its financial fiscal year, revalue any of its material assets, or Tax make any changes in financial, statutory or tax accounting methods, principles or practices or make any material change in actuarial or reserving methods, principles or practices, except insofar in each case as may have been required by a change in GAAP GAAP, SAP or applicable Law;
(nxvi) make any material tax election or settle or compromise any material liability for Taxes or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax electiontax liability, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liability; consent agree to any an extension or waiver of the limitation period applicable to any claim or assessment in respect of a material amount statute of Taxes; grant any power of attorney limitations with respect to material Taxestaxes;
(xvii) make any change in the investment, hedging, underwriting or claims administration policies, practices or principles that would be material to the Company and its Subsidiaries, taken as a whole, except as may be appropriate to conform to changes in applicable Law, SAP or GAAP; enter into or
(xviii) authorize any Tax Sharing Agreement of, or commit, propose or agree to take any closing agreement or other similar agreement; or change any method of accounting for Tax purposes;of, the foregoing actions.
Appears in 2 contracts
Samples: Merger Agreement (Pacificare Health Systems Inc /De/), Merger Agreement (Unitedhealth Group Inc)
Conduct of Business. During the period from the date of this Agreement to the Effective Time, except as consented to in writing in advance by VMware or as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) by this Agreement, Pivotal Company shall, and shall cause each of its Subsidiaries subsidiaries to, carry on its business their respective businesses in the ordinary coursecourse in substantially the same manner as heretofore conducted and, including its development and sales efforts as currently contemplatedto the extent consistent therewith, and use all commercially reasonable efforts to (i) preserve intact its their current business organizationorganizations, assets, rights and properties, (ii) keep available the services of its their current officers, officers and employees and consultants and (iii) preserve its goodwill and its their relationships with customers, suppliers, licensors, licensees, distributors and others having material business dealings with itthem to the end that their goodwill and ongoing business shall be unimpaired at the Effective Time. In addition The Company will (i) comply in all material respects with all laws, statutes, ordinances, rules and regulations applicable to the Company, (ii) take all commercially reasonable steps to preserve the current relationships of the Company with its brokers, reinsurance intermediaries, ceding companies, reinsurers, agents, managing general agents, suppliers and without other persons with which the Company has significant business relationships, and (iii) perform its obligations under all Reinsurance Agreements, Contracts and commitments to which it is a party or by or to which it is bound or subject; and (iv) require the Company's Accountants to conduct an interim quarterly review with a written report of the Company's Form 10-Q filing for the period ended September 30, 1999, in accordance with generally accepted auditing standards. Without limiting the generality of the foregoing, during the period from the date of this Agreement to the Effective Time, except (x) as set forth in section 5.1 of the Pivotal Disclosure Letter, (y) as specifically required by this Agreement or (z) as specifically required by applicable Law, Pivotal Company shall not, and shall not permit any of its Subsidiariessubsidiaries to, without VMware’s the prior written consent (which consent, in the cases approval of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), toParent:
(a) (i) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock stock, other than dividends and distributions by any direct or other equity interests, except for dividends by a indirect wholly owned Subsidiary subsidiary of Pivotal the Company to Pivotal or any other wholly owned Subsidiary of Pivotalits parent, (ii) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii) split, combine, combine or reclassify or otherwise amend the terms of any of its capital stock or other equity 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 (iii) purchase, redeem or otherwise acquire any shares of capital stock of the Company or any of its subsidiaries or any other equity interestssecurities thereof or any rights, warrants or options to acquire any such shares or other securities (other than in connection with the exercise of Company Options);
(b) issue, deliver, sell, grant, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) any shares of its capital stock or stock, any other equity interests voting securities or any securities convertible into, exchangeable for or exercisable for any such shares or other equity interests, or any rights, warrants or options to acquire, any such shares shares, voting securities or other equity interests, or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive shares of capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof convertible securities (other than the issuance of Class A Shares upon the exercise of Pivotal Company Options, the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPP, in each case, that are outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with their terms as in effect on such date);
(c) amend or otherwise change, or authorize or propose to amend or otherwise change, its certificate of incorporation incorporation, by-laws or bylaws (other comparable charter or similar organizational documents);
(d) directly or indirectly acquire or agree to acquire (iincluding, without limitation, by merger, consolidation or acquisitions of stock or assets) by merging or consolidating withany business, purchasing a substantial equity including through the acquisition of any interest in or a substantial portion of the assets of, making an investment in or loan or capital contribution to or in any other manner, any corporation, partnership, limited liability company, joint venture, association or other business organization or division thereof or (ii) any assets that are otherwise material to Pivotal and its Subsidiaries, except, in each case, for (1) capital expenditures which shall be subject to the limitations of clause (i) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes in the ordinary course of business consistent with Pivotal’s investment management policy, and except in the case of clause (ii), acquisitions of inventory, products or services in the ordinary course of business; Table of Contentsthereof;
(e) directly or indirectly sell, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien or, except in the ordinary course of business consistent with past practice and pursuant to existing contracts or commitments, sell, lease, license, transfer or otherwise dispose in whole or in part of any of its material properties, assets or rights (including any material Pivotal the Company Intellectual Property Registrations) Rights or any interest therein, except, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, other material properties or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Outassets;
(f) adopt make or enter into a plan agree to make any new capital expenditures in excess of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization$100,000;
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, make any material Pivotal Intellectual Property Registrationstax election (unless required by law) or settle or compromise any material income tax liability;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, other than Pivotal or any direct or indirect wholly owned Subsidiary of Pivotal;
(i) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto that in the aggregate are in excess of $1,000,000;
(j) except as required by any judgment by a court of competent jurisdiction, (i) pay, discharge, settle discharge or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), or settle any lawsuit other than (A) the payment, discharge discharge, satisfaction or satisfaction in the ordinary course of businesssettlement, (B) as required by their terms as in effect on the date of this Agreement of claims, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements in the ordinary course of business, (ii) cancel any material Indebtedness owed to Pivotal or any of its Subsidiaries, or (iii) waive, release, grant or transfer any right of material value;
(k) (i) materially modify, materially amend, terminate, cancel, waive any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (ii) enter into any Contract that if in effect on the date hereof would be a Material Contract, other than customer contracts entered into in the ordinary course of business;
(l) commence any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal or any of its Subsidiaries), or compromise, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements in the ordinary course of business that involve only consistent with past practice and in accordance with their terms and in an amount not to exceed $25,000, or waive the payment of money damages not in excess of $500,000 individually benefits of, or $2,000,000 in the aggregate, agree to modify in any case without manner, any confidentiality, standstill or similar agreement to which the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal Company or any of its Subsidiariessubsidiaries is a party;
(i) commence a lawsuit other than (i) for the routine collection of bills or (ii) in such cases where the Company in good faith determines that the failure to commence suit would result in a material impairment of a valuable aspect of the Company's business, provided that the Company consults with Parent prior to filing such suit;
(i) hire any permanent employee or any other employee whose employment cannot be terminated at will without further payment or enter into or amend any employment or severance agreement or similar arrangements, (ii) make any determination as to amounts payable under any plan, arrangement, or agreement, providing for discretionary incentive compensation or bonus to any officer, director, employee or independent contractor of the Company or any of its subsidiaries, (iii) enter into, adopt, or amend (except as required by Sections 2.5 and 5.9) any agreement, arrangement, or Benefit Plan so as to increase the liability (whether or not contingent) of the Company or the Parent or any of their subsidiaries or ERISA affiliates in respect of compensation or benefits except as may be required by law, or (iv) grant any options or increase any employee or director compensation;
(k) amend, commute, terminate or waive any of its rights under any Reinsurance Agreement pursuant to which the Company has ceded or transferred any of its obligations or liabilities.
(l) conclude any negotiations relating to outstanding issues arising from the Eureko/VASA purchase or the Folksamerica/USF RE sale.
(m) change its financial make any material changes in their investment portfolio or Tax accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law;investment guidelines.
(n) settle authorize any of, or compromise commit or agree to take any of, the foregoing actions; or
(i) take or agree or commit to take any action that would make any representation or warranty of the Company hereunder inaccurate in any material liability for Taxes respect at, or surrender as of any time prior to, the Effective Time or (ii) 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 claim for a refund of Taxes; file respect at any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liability; consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of a material amount of Taxes; grant any power of attorney with respect to material Taxes; enter into any Tax Sharing Agreement or any closing agreement or other similar agreement; or change any method of accounting for Tax purposes;such time.
Appears in 2 contracts
Samples: Merger Agreement (HCC Insurance Holdings Inc/De/), Merger Agreement (Centris Group Inc)
Conduct of Business. During (a) Except as expressly permitted by this Agreement or as required by applicable Law, during the period from the date of this Agreement to until the Effective Time, except as consented to unless Parent otherwise agrees in writing in advance by VMware or as otherwise expressly required or prohibited (including by writing, the restrictions set forth in subclauses (a) through (r) below) by this Agreement, Pivotal Company shall, and shall cause each of its Subsidiaries to, carry on :
(i) conduct its business in the ordinary course, including its development course consistent with past practice;
(ii) comply in all material respects with all applicable Laws and sales efforts as currently contemplated, and the requirements of all Material Contracts;
(iii) use commercially reasonable efforts to (i) maintain and preserve intact its business organization, assets, rights organization and properties, (ii) keep available the goodwill of those having business relationships with it and retain the services of its current officerspresent officers and key employees, employees and consultants and (iii) preserve in each case, to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time; and
(iv) keep in full force and effect all material insurance policies maintained by the Company and its relationships with customersSubsidiaries, suppliers, licensors, licensees, distributors and others having material business dealings with it. In addition other than changes to and without such policies made in the ordinary course of business.
(b) Without limiting the generality of the foregoing, except as expressly permitted or contemplated by this Agreement or as required by applicable Law, during the period from the date of this Agreement to the Effective Time, except (x) as set forth in section 5.1 of the Pivotal Disclosure Letter, (y) as specifically required by this Agreement or (z) as specifically required by applicable Law, Pivotal Company shall not, and shall not permit any of its SubsidiariesSubsidiaries to, without VMware’s the prior written consent (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), toParent:
(a) (i) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock or other equity interests, except for dividends by a wholly owned Subsidiary of Pivotal to Pivotal or any other wholly owned Subsidiary of Pivotal, (ii) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii) split, combine, reclassify or otherwise amend the terms of any of its capital stock or other equity 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 other equity interests;
(b) issue, deliver, sell, grant, dispose of, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) any shares of its capital stock stock, voting securities or other equity interests interests, or any securities or rights convertible into, exchangeable for or exercisable for, or evidencing the right to subscribe for any such shares of its capital stock, voting securities or other equity interests, or any rights, warrants warrants, options, calls, commitments or options any other agreements of any character to acquirepurchase or acquire any shares of its capital stock, voting securities or equity interests or any securities or rights convertible into, exchangeable or exercisable for, or evidencing the right to subscribe for, any such shares of its capital stock, voting securities or other equity interests, or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive provided that the Company may issue shares of capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof Company Common Stock upon:
(other than the issuance of Class A Shares upon 1) the exercise of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights options granted under the Pivotal ESPP, in each case, Company Stock Plans that are outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with their the terms as in effect on such date);thereof; and
(c) amend or otherwise change, or authorize or propose to amend or otherwise change, its certificate of incorporation or bylaws (or similar organizational documents);
(d) directly or indirectly acquire or agree to acquire (i) by merging or consolidating with, purchasing a substantial equity interest in or a substantial portion of the assets of, making an investment in or loan or capital contribution to or in any other manner, any corporation, partnership, association or other business organization or division thereof or (ii) any assets that are otherwise material to Pivotal and its Subsidiaries, except, in each case, for (1) capital expenditures which shall be subject to the limitations of clause (i) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes in the ordinary course of business consistent with Pivotal’s investment management policy, and except in the case of clause (ii), acquisitions of inventory, products or services in the ordinary course of business; Table of Contents
(e) directly or indirectly sell, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien or otherwise dispose in whole or in part of any of its material properties, assets or rights (including any material Pivotal Intellectual Property Registrations) or any interest therein, except, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Out;
(f) adopt or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, other than Pivotal or any direct or indirect wholly owned Subsidiary of Pivotal;
(i) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto that in the aggregate are in excess of $1,000,000;
(j) except as required by any judgment by a court of competent jurisdiction, (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge or satisfaction in the ordinary course of business, (B) as required by their terms as in effect on the date of this Agreement of claims, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements in the ordinary course of business, (ii) cancel any material Indebtedness owed to Pivotal or any of its Subsidiaries, or (iii) waive, release, grant or transfer any right of material value;
(k) (i) materially modify, materially amend, terminate, cancel, waive any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (ii) enter into any Contract that if in effect on the date hereof would be a Material Contract, other than customer contracts entered into in the ordinary course of business;
(l) commence any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal or any of its Subsidiaries), or compromise, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements in the ordinary course of business that involve only the payment of money damages not in excess of $500,000 individually or $2,000,000 in the aggregate, in any case without the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal or any of its Subsidiaries;
(m) change its financial or Tax accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law;
(n) settle or compromise any material liability for Taxes or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liability; consent to any extension or waiver conversion of the limitation period applicable to any claim or assessment in respect of a material amount of Taxes; grant any power of attorney with respect to material Taxes; enter Five Star Note into any Tax Sharing Agreement or any closing agreement or other similar agreement; or change any method of accounting for Tax purposesShares;
Appears in 2 contracts
Samples: Tender Offer and Merger Agreement (Five Star Products Inc), Tender Offer and Merger Agreement (National Patent Development Corp)
Conduct of Business. During (a) Except as set forth in Section 4.01 of the Company Disclosure Letter, contemplated or permitted by this Agreement, required by Law or consented to in writing by Parent (such consent not to be unreasonably withheld, conditioned or delayed), during the period from the date of this Agreement to the Effective Time, except as consented to in writing in advance by VMware or as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) by this Agreement, Pivotal Company shall, and shall cause each of its Subsidiaries to, carry on its business in the ordinary coursecourse consistent with the past practice and, including its development and sales efforts as currently contemplatedto the extent consistent therewith, and use commercially reasonable best efforts to (i) preserve substantially intact its current business organization, assets, rights and properties, (ii) to keep available the services of its current officers, officers and employees and consultants and (iii) to preserve its goodwill and its relationships with material customers, suppliers, licensors, licensees, distributors distributors, wholesalers, lessors and others having material business dealings with it. In addition to and without limiting the generality .
(b) Except as set forth in Section 4.01 of the foregoingCompany Disclosure Letter, contemplated or permitted by this Agreement, required by Law or consented to in writing by Parent (such consent not to be unreasonably withheld, conditioned or delayed), during the period from the date of this Agreement to the Effective Time, except (x) as set forth in section 5.1 of the Pivotal Disclosure Letter, (y) as specifically required by this Agreement or (z) as specifically required by applicable Law, Pivotal Company shall not, and shall not permit any of its Subsidiaries, without VMware’s prior written consent (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), Subsidiaries to:
(ai) (iA) declare, set aside aside, or pay any dividends on, or make any other distributions (whether in cash, stock or property) in with respect ofto, any of its capital stock stock, other than regular quarterly cash dividends on Company Common Stock consistent with past practice and not to exceed $0.21 per share of Company Common Stock and dividends or other equity interests, except for dividends distributions by a direct or indirect wholly owned Subsidiary of Pivotal the Company to Pivotal the Company or any other another wholly owned Subsidiary of Pivotalthe Company, (ii) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii) split, combine, combine or reclassify or otherwise amend the terms of any of its capital stock or other equity 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 (C) purchase, redeem or otherwise acquire (1) any shares of its capital stock or other equity interestsvoting securities or (2) any options, warrants, calls or rights to acquire, or any securities convertible into or exchangeable for, any such shares or voting securities (except upon the exercise of options, warrants, calls or rights disclosed in the Company Disclosure Letter to the extent net exercises are provided for in the plans or agreements governing such options, warrants, calls or rights);
(bii) issue, deliver, sell, grant, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) any shares of its capital stock or other equity interests voting securities or any options, warrants, calls or rights to acquire any such shares, other voting securities or any securities convertible into, exchangeable for into or exercisable for any such shares or other equity interestsfor, or any rights, warrants or options to acquire, any such shares shares, voting securities or other equity interestsconvertible securities, or any stock appreciation rights“phantom” stock, “phantom” stock rights, stock appreciation rights, restricted stock units, deferred stock units or stock based performance units, rights to receive shares of capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof (other than the issuance of Class A Shares shares of Company Common Stock upon the exercise of Pivotal Company Stock Options, the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPP, in each case, that are outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with their terms as in effect on such date);
(ciii) amend the Company Articles or otherwise change, the Company By-laws or authorize other comparable charter or propose to amend or otherwise change, organizational documents of any of its certificate of incorporation or bylaws (or similar organizational documents)Subsidiaries;
(div) directly merge or indirectly acquire or agree to acquire (i) by merging or consolidating consolidate with, purchasing a substantial or purchase an equity interest in all or a substantial portion substantially all of the assets of, making an investment any Person or any division or business thereof, if the aggregate amount of the consideration paid or transferred by the Company and its Subsidiaries in connection with all such transactions would exceed $5,000,000;
(v) sell, lease or loan otherwise dispose of any of its real or personal properties or assets (including capital contribution to stock of any Subsidiary of the Company) that are material, individually or in any other mannerthe aggregate, any corporation, partnership, association or other business organization or division thereof or (ii) any assets that are otherwise material to Pivotal the Company and its Subsidiaries, excepttaken as a whole, in each case, for (1) capital expenditures which shall be subject to the limitations other than sales of clause (i) below inventory and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes other assets in the ordinary course of business consistent with Pivotal’s investment management policypast practice;
(vi) (A) incur any indebtedness for borrowed money, and except in issue or sell any debt securities or warrants or other rights to acquire any debt securities (collectively, “Indebtedness”) of the case Company or any of clause its Subsidiaries or guarantee Indebtedness of another Person, other than (ii), acquisitions of inventory, products 1) Indebtedness incurred or services otherwise assumed or entered into in the ordinary course of business; Table business under the Company’s or its Subsidiaries’ existing revolving credit facilities, trade letters of Contents
credit or other existing arrangements, (e2) directly Indebtedness incurred to finance capital expenditures permitted by clause (vii) below and mergers, consolidations or indirectly sellpurchases permitted by clause (iv) above and (3) Indebtedness incurred in connection with the refinancing of any Indebtedness existing on the date of this Agreement or permitted to be incurred, lease, license, sell and leaseback, abandon, allow to lapse, mortgage assumed or otherwise encumber or subject entered into pursuant to any Lien or otherwise dispose in whole or in part of any of its material properties, assets or rights this clause (including any material Pivotal Intellectual Property Registrationsvi) or any interest therein, except, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Out;
(f) adopt or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (iiB) make any loans, advances loans or capital contributions to, or investments in, any other Person, other than Pivotal or any direct or indirect wholly owned Subsidiary in the ordinary course of Pivotalbusiness consistent with past practice;
(ivii) incur or commit to incur make any capital expenditure expenditures, other than (A) in connection with the repair or authorization replacement of facilities destroyed or commitment with respect thereto that damaged due to casualty or accident (whether or not covered by insurance) or (B) otherwise in the an aggregate are in excess of amount for all such capital expenditures not to exceed $1,000,00012,000,000;
(jviii) enter into any Contract that is or would be a Material Contract, or modify, amend, elect not to renew or terminate or waive, release or assign any material rights under any Material Contract to which the Company or any of its Subsidiaries is a party which if so entered into, modified, amended, terminated, waived, released or assigned would reasonably be expected to (A) have a Material Adverse Effect or (B) impair in any material respect the ability of the Company and its Subsidiaries to conduct their business as currently conducted;
(ix) (A) grant any material increase in compensation to any executive officer or director of the Company or any of its Subsidiaries, except (1) for increases in the ordinary course of business, (2) as required under the terms of a Company Benefit Agreement or Company Benefit Plan as in effect on the date of this Agreement or (3) for employment arrangements for, or grants of compensatory awards to, promoted or newly hired employees, (B) grant to any director or executive officer of the Company or its Subsidiaries the right to receive any severance or termination pay not provided for under any Company Benefit Plan or Company Benefit Agreement as in effect on the date of this Agreement, (C) enter into or materially amend any Company Benefit Agreement with any executive officer or director of the Company or any of its Subsidiaries or (D) adopt or amend in any material respect any Company Benefit Plan, except as required to comply with the terms of any Company Benefit Plan;
(x) make any material change in accounting methods, principles or practices that would materially affect the consolidated assets, liabilities or results of operations of the Company, except insofar (A) as may have been required by a change in GAAP, (B) as may be required by a change in Law or (C) as required by a Governmental Entity or quasi-governmental entity (including the Financial Accounting Standards Board or any similar organization);
(xi) change any material method of Tax accounting, make or change any material Tax election, file any amended material Tax Return, settle or compromise any material Tax liability, agree to an extension or waiver of the statute of limitations with respect to the assessment or determination of material Taxes, enter into any closing agreement with respect to any material Tax or surrender any right to claim a material Tax refund;
(xii) except as required by Law or any judgment by a court of competent jurisdiction, (i) pay, discharge, settle or satisfy any claimsmaterial Actions, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge discharge, settlement or satisfaction in the ordinary course of businessbusiness consistent with past practice or in accordance with their terms, (B) as required by their terms as in effect on the date of this Agreement of claimsliabilities disclosed, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of Pivotal the Company included in the Pivotal Filed SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements in the ordinary course of business, business and (iiB) cancel any material Indebtedness owed to Pivotal which do not seek injunctive or other equitable relief that would restrict the conduct of the Company or any of its SubsidiariesSubsidiaries in any material respect; provided, that if, after a request from the Company, Parent prohibits the Company from making any such payment, discharge, settlement or satisfaction proposed by the Company, or (iii) waivedirects the Company to take an action with respect to any such Actions, releaseliabilities or obligations, grant then any adverse development with respect to such subject Action, liabilities or transfer any right obligation shall not be considered in determining the satisfaction of material value;the conditions set forth in Article VI of this Agreement.
(kxiii) (i) materially modifywrite up, materially amendwrite down or write off the book value of any assets, terminate, cancel, waive any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (ii) enter into any Contract that if in effect on the date hereof would be a Material Contract, other than customer contracts entered into in the ordinary course of business;
(l) commence any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal or any of its Subsidiaries), or compromise, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements in the ordinary course of business that involve only the payment of money damages not in excess of $500,000 individually or $2,000,000 in the aggregate, in any case without for the imposition of any equitable relief onCompany and/or its Subsidiaries taken as a whole, or the admission of wrongdoing by, Pivotal or any of its Subsidiaries;
(m) change its financial or Tax accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law;
(n) settle or compromise any material liability for Taxes or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis consistent with past practice that would materially or otherwise not in excess of $5,000,000; or
(xiv) authorize any of, or commit or agree in writing to take any of, the foregoing actions.
(c) Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time, and adversely affect nothing contained in this Agreement shall give the Company, directly or indirectly, the right to control or direct Parent’s or its Tax liability; consent Subsidiaries’ operations prior to any extension or waiver the Effective Time. Prior to the Effective Time, each of the limitation period applicable to any claim or assessment in respect Company and Parent shall exercise, consistent with the terms and conditions of a material amount of Taxes; grant any power of attorney with respect to material Taxes; enter into any Tax Sharing Agreement or any closing agreement or other similar agreement; or change any method of accounting for Tax purposes;this Agreement, complete control and supervision over its and its Subsidiaries’ respective operations.
Appears in 2 contracts
Samples: Merger Agreement (Teleflex Inc), Merger Agreement (Arrow International Inc)
Conduct of Business. During (a) Except as expressly contemplated, permitted or required by this Agreement or as required by applicable Law or as set forth in Section 5.5 of the Company Disclosure Schedule, during the period from the date of this Agreement to until the Effective TimeTime (or such earlier date on which this Agreement is terminated), except as consented to unless Parent otherwise consents in writing in advance by VMware (which consent shall not be unreasonably withheld, delayed or as otherwise expressly required or prohibited conditioned), (including by 1) the restrictions set forth in subclauses (a) through (r) below) by this Agreement, Pivotal Company shall, and shall cause each of its Subsidiaries to, carry on conduct its business in all material respects in the ordinary coursecourse consistent with past practice and, including to the extent consistent with the foregoing, to use reasonable best efforts to maintain existing relationships with Clients, intermediaries, employees, consultants and other Persons with whom the Company or its development and sales efforts as currently contemplatedSubsidiaries have material business relationships, and use commercially reasonable efforts to (i2) preserve intact its business organization, assets, rights and properties, (ii) keep available the services of its current officers, employees and consultants and (iii) preserve its goodwill and its relationships with customers, suppliers, licensors, licensees, distributors and others having material business dealings with it. In addition to and without limiting the generality of the foregoing, during the period from the date of this Agreement to the Effective Time, except (x) as set forth in section 5.1 of the Pivotal Disclosure Letter, (y) as specifically required by this Agreement or (z) as specifically required by applicable Law, Pivotal Company shall not, and shall not permit any of its Subsidiaries, without VMware’s prior written consent (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), Subsidiaries to:
(a) (i) declareissue, set aside sell or pay grant any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock or other equity interests, except for dividends by a wholly owned Subsidiary of Pivotal to Pivotal or any other wholly owned Subsidiary of Pivotal, (ii) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii) split, combine, reclassify or otherwise amend the terms of any of its capital stock or other equity 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 stock, equity or other equity equity-based interests;
(b) issue, deliveror any securities or rights convertible into, sellexchangeable or exercisable for, grantor evidencing the right to subscribe for, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) any shares of its capital stock or other equity interests, or any warrants, options or right to purchase or acquire any shares of its capital stock or equity interests or any securities or rights convertible into, exchangeable for or exercisable for for, or evidencing the right to subscribe for, any such shares of its capital stock or other equity interests, or amend the terms of any rightswarrants, warrants or options to acquire, any such shares or other equity interests, or any stock appreciation rights, “phantom” stock rights, performance unitsoptions, rights to receive purchase or acquire shares of its capital stock or equity interests or any securities or rights into, exchangeable or exercisable for, or evidencing the right to subscribe for, any shares of VMware on a deferred basis its capital stock or other rights linked to equity interests; provided, that the value Company may issue shares of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof Company Common Stock upon (other than the issuance of Class A Shares upon A) the exercise of Pivotal OptionsWarrants, (B) the settlement conversion of Pivotal RSUs or Convertible Notes and (C) the exercise exchange of purchase rights under the Pivotal ESPPExchangeable Shares, in each case, that are outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with their the terms as in effect on such date)thereof;
(cii) amend redeem, purchase or otherwise changeacquire any of its outstanding shares of capital stock or equity interests, or authorize any rights, warrants or propose options to amend acquire any shares of its capital stock or otherwise changeequity interests, its certificate except (A) pursuant to Contracts in effect as of incorporation the date of this Agreement and set forth in Section 5.5(a)(ii) of the Company Disclosure Schedule, or bylaws (B) in connection with withholding to satisfy tax obligations with respect to Restricted Stock or similar organizational documents)the forfeiture of equity awards that were granted under the Company Stock Plans and are outstanding on the date of this Agreement;
(diii) directly declare, set aside for payment or indirectly acquire pay any dividend on, or agree make any other distribution (whether in cash, stock or property) in respect of, any shares of its capital stock or equity interests or otherwise make any payments to acquire its stockholders or other equity-holders in their capacity as such (i) other than dividends by merging or consolidating with, purchasing a substantial equity interest in or a substantial portion wholly owned Subsidiary of the assets of, making an investment Company to its parent or cumulative dividends in or loan or capital contribution to or in any other manner, any corporation, partnership, association or other business organization or division thereof or (ii) any assets that are otherwise material to Pivotal and its Subsidiaries, except, in each case, for (1) capital expenditures which shall be subject to respect of the limitations of clause (i) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes Exchangeable Shares in the ordinary course of business consistent with Pivotal’s investment management policypractice and in accordance with the terms of the FA Sub 2 Limited Organizational Documents);
(iv) split, and combine, subdivide or reclassify any shares of its capital stock;
(v) incur or assume any indebtedness for borrowed money, issue or sell any debt securities, or guarantee any indebtedness or enter into any “keep well” or other Contract to maintain any financial statement condition of another Person, except in (A) borrowings by the case Company or any of clause (ii), acquisitions of inventory, products or services its Subsidiaries in the ordinary course of business; Table business and consistent with past practices under the Company’s existing credit facility set forth in Section 5.5(a)(v) of Contentsthe Company Disclosure Schedule and guarantees of such borrowings issued by the Company’s Subsidiaries to the extent required under the terms of such credit facility, (B) inter-company borrowings solely among the Company and its wholly owned Subsidiaries in the ordinary course consistent with past practice and (C) in connection with letters of credit issued in the ordinary course of business in amounts not in excess of $1,000,000 in the aggregate;
(evi) directly make any loans or indirectly sell, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject advances to any Lien or otherwise dispose in whole or in part of any of its material properties, assets or rights Person (including any material Pivotal Intellectual Property Registrations) other than the Company or any interest thereinwholly owned Subsidiary of the Company), exceptexcept travel and similar advances to its employees, and advances to customers, in each case, made in the ordinary course of business consistent with past practice;
(ivii) make any capital expenditure or expenditures which (A) involves the purchase of real property or (B) is in excess of $2,000,000 individually or $5,000,000 in the aggregate, except for any such capital expenditures as budgeted in the Company’s 2010 capital expenditure plan set forth in Section 5.5(a)(vii) of the Company Disclosure Schedule;
(viii) sell, dispose of or otherwise transfer (by merger or otherwise), lease out or license out, or pledge, mortgage or otherwise encumber, any of its material properties or assets (including securities of Subsidiaries), except (A) sales, leases and licenses, in each case, in the ordinary course of business consistent with past practice or up to $10,000,000 in the aggregate, (B) pursuant to Contracts in force on the date of this Agreement and listed in Section 5.5(a)(viii) of the Company Disclosure Schedule, (C) dispositions of obsolete or worthless assets, (D) Permitted Liens and (E) pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirationsmortgages or other encumbrances to secure indebtedness permitted hereunder;
(ix) directly or indirectly acquire (A) by merging or consolidating with, or encumbrances by purchasing all or any substantial amount of the capital stock or equity interest in, any Person (or a division or business of any Person), or (B) except in the ordinary course of business consistent with past practice, any assets for consideration in excess of $5,000,000 in the aggregate (excluding assets acquired from wholly owned Subsidiaries), in each case, other than acquisitions between or among the Company or its wholly owned Subsidiaries;
(x) (A) increase in the severance, compensation, distributions or benefits payable to any of its current or former directors, officers, employees or consultants (including any limited partners, Affiliates or trustees) or establish, adopt, enter into, amend or terminate any Company Plan or Employment Agreements or any plan, program, policy, trust, fund or Contract (or other arrangement that would be a Company Plan or Employment Agreement if it were in existence as of the date of this Agreement) with, for or in respect of, any current or former director, officer, employee or consultant (including any limited partner, Affiliate or trustee), other than (1) as required pursuant to be effected (x) the terms of the Company Plan or Employment Agreement in effect as of the date of this Agreement or (y) applicable Law, (2) increases in salaries, wages and benefits of employees (other than officers or directors) made as a result of promotions in the ordinary course of business and in amounts and in a manner consistent with past practice and (3) increases in salaries and wages of employees (other than officers or directors) that are otherwise in the ordinary course of business and in amounts and in a manner consistent with past practice or (B) pay or accrue any compensation, distributions or bonuses in advance or prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal time such amounts would otherwise be due, paid or accrued in the ordinary course of business and in a manner consistent with the past practices of the Company and its Subsidiaries;
(xi) (A) enter into, terminate or amend any Material Contract, or any other Contract that is material to the Company and its Subsidiaries taken as a whole and whole, other than in the ordinary course of business consistent with past practice, (iiB) Ordinary Course Licenses Outenter into or extend the term or scope of any Contract that purports to restrict the Company, or any existing or future Subsidiary or Affiliate of the Company, from engaging in any line of business or in any geographic area, (C) amend or modify the engagement letters referred to in Section 3.7, (D) enter into any Contract that would be breached by, or require the consent of any third party in order to continue in full force following, consummation of the Transactions or the Share Exchange Transactions or (E) release any Person from, or modify or waive any provision of, any confidentiality, standstill or similar agreement;
(fxii) make any material changes in financial or tax accounting methods, principles or practices (or change an annual accounting period), except insofar as may be required by a change in GAAP or applicable Law;
(xiii) (A) make, change or revoke any material Tax election, (B) settle or compromise any material Tax claim or assessment, (C) surrender any Tax refund, (D) amend any Tax Return or (E) file any Tax Return not prepared in accordance with the Company’s or the relevant Subsidiary’s or Fund’s past practices, in each case except insofar as may be required by applicable Law;
(xiv) amend its Organizational Documents;
(xv) adopt or enter into a plan or agreement of complete or partial liquidation, dissolution, restructuring, recapitalization liquidation or dissolution other reorganizationthan with respect to wholly owned Subsidiaries;
(gxvi) fail commence, settle or compromise any legal, regulatory, arbitral or administrative proceeding, claim, suit or action material to maintain, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property RegistrationsCompany and its Subsidiaries taken as a whole;
(hxvii) (iA) incurredeem, createrepurchase, assume or otherwise become liable for, or repay, cancel, forgive or prepay, defease or cancel any Indebtedness, or amend, modify or refinance any Indebtedness or (ii) make any loans, advances or capital contributions to, or investments in, any other Personindebtedness for borrowed money, other than Pivotal as required in accordance with its terms, or any direct or indirect wholly owned Subsidiary of Pivotal;
(i) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto that in the aggregate are in excess of $1,000,000;
(jB) except as required by Law, any judgment by a court of competent jurisdictionjurisdiction or the terms of any Contract in effect on the date hereof, (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise)) that are otherwise material to the Company and its Subsidiaries taken as a whole, other than (A) the payment, discharge discharge, settlement or satisfaction (1) in the ordinary course of business, (B) as required by business or in accordance with their terms as in effect on the date of this Agreement of claims, liabilities or obligations (i) disclosed, reflected or reserved against in the most recent audited financial statements (or the notes thereto) of Pivotal the Company included in the Pivotal Company SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (Cii) incurred since the date of such financial statements in the ordinary course of businessbusiness or (2) of costs and expenses related to this Agreement, the Share Exchange Agreement or the Voting Agreement and the Transactions or the Share Exchange Transactions; or
(iixviii) cancel agree to take any material Indebtedness owed to Pivotal of the foregoing actions or any of its Subsidiariesaction which would reasonably be expected to prevent, or (iii) waivematerially delay or impede, release, grant or transfer any right the satisfaction of material value;
(k) (i) materially modify, materially amend, terminate, cancel, waive any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (ii) enter into any Contract that if in effect on the date hereof would be a Material Contract, other than customer contracts entered into in the ordinary course of business;
(l) commence any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal or any of its Subsidiaries), or compromise, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements the conditions set forth in the ordinary course of business that involve only the payment of money damages not in excess of $500,000 individually or $2,000,000 in the aggregate, in any case without the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal or any of its Subsidiaries;
(m) change its financial or Tax accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law;
(n) settle or compromise any material liability for Taxes or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liability; consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of a material amount of Taxes; grant any power of attorney with respect to material Taxes; enter into any Tax Sharing Agreement or any closing agreement or other similar agreement; or change any method of accounting for Tax purposes;Article VI.
Appears in 2 contracts
Samples: Merger Agreement (Sage Summit LP), Merger Agreement (GLG Partners, Inc.)
Conduct of Business. During the period from the date Effective Date and continuing until the earlier of the termination of this Agreement to or the Effective TimeClosing Date, except as consented to in writing in advance expressly contemplated or permitted by VMware this Agreement or with the prior written consent of Purchaser or as otherwise expressly required by applicable Laws or prohibited (including by NYSE rules, the restrictions set forth in subclauses (a) through (r) below) by this Agreement, Pivotal shall, Company and shall cause each of its Subsidiaries to, shall carry on its business in the ordinary course, including its development and sales efforts as currently contemplated, and use commercially reasonable efforts to (i) preserve intact its business organization, assets, rights and properties, (ii) keep available the services of its current officers, employees and consultants and (iii) preserve its goodwill and its relationships course consistent with customers, suppliers, licensors, licensees, distributors and others having material business dealings with itpast practice. In addition to and without Without limiting the generality of the foregoing, during and except as otherwise provided in this Agreement and except for matters set forth on Disclosure Schedule 6.3, the period Company agrees that from the date Effective Date to the earlier of the termination of this Agreement to or the Effective TimeClosing Date, except (x) as set forth in section 5.1 of the Pivotal Disclosure Letter, (y) as specifically required by this Agreement or (z) as specifically required by applicable Law, Pivotal Company shall not, and shall not permit any of its SubsidiariesSubsidiaries to, without VMware’s prior written consent (which consentdirectly or indirectly, in the cases do or agree to do, any of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), tofollowing:
(a) (i(A) declare, set aside aside, or pay any dividends on, or make any other distributions (whether in cash, stock stock, or property) in respect of, any of its capital stock or other equity or voting interests, except for dividends by a direct or indirect wholly owned Subsidiary of Pivotal the Company to Pivotal or any other wholly owned Subsidiary of Pivotalits parent, (ii) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii) split, combine, or reclassify or otherwise amend the terms of any of its capital stock or other equity interests or voting interests, or issue or authorize the issuance of any other securities in respect of, in lieu of of, or in substitution for shares of its capital stock or other equity or voting interests, (C) purchase, redeem, or otherwise acquire any shares of capital stock or any other securities of the Company or any of its Subsidiaries or any options, warrants, calls, or rights to acquire any such shares or other securities (other than any Company stock awards or shares of restricted stock pursuant to forfeiture conditions relating thereto or to satisfy tax withholding requirements) or (D) take any action that would result in any change of any term (including any conversion price thereof) of any debt security of the Company or any of its Subsidiaries;
(b) issueIssue, deliver, sell, grantpledge, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) any shares of its capital stock or stock, any other equity or voting interests or any securities convertible into, or exchangeable for for, or exercisable for any options, warrants, calls, or rights to acquire or receive, any such shares or other equity shares, interests, or any rights, warrants or options to acquire, any such shares or other equity interests, securities or any stock appreciation rights, “phantom” phantom stock rightsawards, performance units, rights to receive shares of capital stock of VMware on a deferred basis or other rights that are linked in any way to the price of the Common Stock or the value of Class A Shares the Company or Class B Shares, including pursuant to Contracts as in effect on the date hereof any part thereof (other than the issuance of Class A Shares upon the exercise of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPP, in each case, that are outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with their terms as in effect on such date);
(c) amend or otherwise change, or authorize or propose to amend or otherwise change, its certificate of incorporation or bylaws (or similar organizational documents);
(d) directly or indirectly acquire or agree to acquire (i) by merging or consolidating with, purchasing a substantial except for equity interest in or a substantial portion of the assets of, making an investment in or loan or capital contribution to or in any other manner, any corporation, partnership, association or other business organization or division thereof or (ii) any assets that are otherwise material to Pivotal and its Subsidiaries, except, in each case, for (1) capital expenditures which shall be subject to the limitations of clause (i) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes awards in the ordinary course of business consistent with Pivotal’s investment management policypast practice and with plans existing as of the Effective Date, issuances pursuant to the Notes outstanding on the Effective Date (or the related Pre-Funded Warrants) in accordance with the terms of such securities on the Effective Date, issuances pursuant to equity awards not issued in violation of this Agreement, and except in the case of clause (iiother permitted issuances as set forth on Schedule 6.3(b), acquisitions of inventory, products or services in the ordinary course of business; Table of Contents
(e) directly or indirectly sell, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien or otherwise dispose in whole or in part of any of its material properties, assets or rights (including any material Pivotal Intellectual Property Registrations) or any interest therein, except, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Out);
(fc) adopt Amend or enter into propose to amend its Organizational Documents or effect or become a plan of complete party to any merger, consolidation, share exchange, business combination, recapitalization, or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;similar transaction; and
(gd) fail to maintainAuthorize any of, or allow to lapsecommit, or abandonresolve, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, other than Pivotal or any direct or indirect wholly owned Subsidiary of Pivotal;
(i) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto that in the aggregate are in excess of $1,000,000;
(j) except as required by any judgment by a court of competent jurisdiction, (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge or satisfaction in the ordinary course of business, (B) as required by their terms as in effect on the date of this Agreement of claims, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements in the ordinary course of business, (ii) cancel any material Indebtedness owed to Pivotal or any of its Subsidiaries, or (iii) waive, release, grant or transfer any right of material value;
(k) (i) materially modify, materially amend, terminate, cancel, waive any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (ii) enter into any Contract that if in effect on the date hereof would be a Material Contract, other than customer contracts entered into in the ordinary course of business;
(l) commence any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal or any of its Subsidiaries), or compromise, settle or agree to settle take any Legal Proceedingof, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements in the ordinary course of business that involve only the payment of money damages not in excess of $500,000 individually or $2,000,000 in the aggregate, in any case without the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal or any of its Subsidiaries;
(m) change its financial or Tax accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law;
(n) settle or compromise any material liability for Taxes or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liability; consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of a material amount of Taxes; grant any power of attorney with respect to material Taxes; enter into any Tax Sharing Agreement or any closing agreement or other similar agreement; or change any method of accounting for Tax purposes;foregoing actions.
Appears in 2 contracts
Samples: Securities Purchase Agreement (ProFrac Holding Corp.), Securities Purchase Agreement (Flotek Industries Inc/Cn/)
Conduct of Business. During Except as expressly contemplated by this Agreement or as set forth on Section 6.1 of the Company Disclosure Schedule, during the period from the date of this Agreement to and continuing until the earlier of the termination of this Agreement in accordance with Section 8.1 or the Effective Time, except Company agrees as consented to in writing in advance by VMware or as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) by this Agreement, Pivotal shall, itself and shall cause each of its Subsidiaries to, (except to the extent that Parent shall otherwise consent in writing) to carry on its business in the usual, regular and ordinary coursecourse in substantially the same manner as previously conducted, including to pay its development debts and sales efforts as currently contemplatedTaxes when due subject to good faith disputes over such debts or Taxes, and to pay or perform its other obligations when due, and, to the extent consistent with such business, use commercially all reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, assets, rights and properties, (ii) keep available the services of its current officers, present officers and key employees and consultants and (iii) preserve its goodwill and its relationships with customers, suppliers, licensorsdistributors, licensees, distributors and others having material business dealings with it. In addition to and without limiting Notwithstanding the generality foregoing, except as set forth on Section 6.1 of the foregoingCompany Disclosure Schedule, during the period from the date of this Agreement to and continuing until the earlier of the termination of this Agreement or the Effective Time, except Company shall not (x) as set forth in section 5.1 of the Pivotal Disclosure Letter, (y) as specifically required by this Agreement or (z) as specifically required by applicable Law, Pivotal shall not, and shall not permit any of its SubsidiariesSubsidiaries to), without VMware’s prior the written consent (which consentof Parent, in the cases do any of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), tofollowing:
(a) accelerate, amend or change the period of exercisability of options or restricted stock granted under any Stock Plan or authorize cash payments in exchange for any options granted under any of such Stock Plan, except as required by the terms of such Stock Plan or any related agreements in effect as of the date of this Agreement;
(ib) declare, set aside declare or pay any dividends on, on or make any other distributions (whether in cash, stock or property) in respect ofof any of its capital stock, or split, combine or reclassify any of its capital stock or other equity interests, except for dividends by a wholly owned Subsidiary of Pivotal to Pivotal or any other wholly owned Subsidiary of Pivotal, (ii) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii) split, combine, reclassify or otherwise amend the terms of any of its capital stock or other equity 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 stock, or other equity interestspurchase or otherwise acquire, directly or indirectly, any shares of its capital stock, except from former employees, directors and consultants in accordance with agreements providing for the repurchase of shares in connection with any termination of service to such party;
(bc) issue, deliver, deliver or sell, grantor authorize or propose the issuance, pledge delivery or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) sale of, any shares of its capital stock or other equity interests or any securities convertible into, into or exchangeable for or exercisable for any such shares or other equity interestsof its capital stock, or any subscriptions, rights, warrants or options to acquire, or other agreements or commitments of any character obligating it to issue, any such shares or other equity interestsconvertible securities, or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive shares of capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof (other than the issuance of Class A Shares upon shares of Company Common Stock pursuant to the exercise of Pivotal Options, the settlement of Pivotal RSUs options or the exercise of purchase rights under the Pivotal ESPP, in each case, that are warrants outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with their terms as in effect on such date);
(c) amend or otherwise change, or authorize or propose to amend or otherwise change, its certificate of incorporation or bylaws (or similar organizational documents)Agreement;
(d) directly or indirectly acquire or agree to acquire (i) by merging or consolidating with, or by purchasing a substantial equity interest in in, or a substantial portion of the assets of, making an investment in or loan or capital contribution to or in by any other manner, any business or any corporation, partnership, association partnership or other business organization or division thereof division, or (ii) otherwise acquire or agree to acquire any assets that are otherwise material to Pivotal (other than inventory and its Subsidiaries, except, in each case, for (1) capital expenditures which shall be subject to the limitations of clause (i) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes other items in the ordinary course of business consistent with Pivotal’s investment management policy, and except in the case of clause (iibusiness), except for any such acquisitions involving aggregate consideration of inventorynot more than $50,000;
(e) sell, products lease, license or services otherwise dispose of any of its material properties or assets, except for transactions in the ordinary course of business; Table of Contents
(e) directly or indirectly sellPROVIDED, leaseHOWEVER, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien or otherwise dispose in whole or in part of any of its material properties, assets or rights (including any material Pivotal Intellectual Property Registrations) or any interest therein, except, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Out;
(f) adopt or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, other than Pivotal or any direct or indirect wholly owned Subsidiary of Pivotal;
(i) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto that in the aggregate are in excess of $1,000,000;
(j) except as required by any judgment by a court of competent jurisdiction, (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge or satisfaction in the ordinary course of business, (B) as required by their terms as in effect on the date of this Agreement of claims, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements in the ordinary course of business, (ii) cancel any material Indebtedness owed to Pivotal or any of its Subsidiaries, or (iii) waive, release, grant or transfer any right of material value;
(k) (i) materially modify, materially amend, terminate, cancel, waive any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (ii) no event shall Company enter into any Contract that if agreement, option or other arrangement (including, without limitation, any joint venture) involving the licensing of its name in effect on the date hereof would be a Material Contractany foreign country, other than customer contracts entered into except for transactions in the ordinary course of business;
(lf) commence enter into any Legal Proceeding (material agreement or other than arrangement which would constitute a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal Material Contract if Company or any of its Subsidiaries)Subsidiaries were a party thereto as of the date of this Agreement, which agreements or other arrangements obligate the Company to pay more than $50,000 thereunder, individually, or compromise, settle or agree to settle any Legal Proceeding, other more than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements in the ordinary course of business that involve only the payment of money damages not in excess of $500,000 individually or $2,000,000 100,000 in the aggregate; PROVIDED, in any case without the imposition of any equitable relief onHOWEVER, or the admission of wrongdoing by, Pivotal or Company shall not (and shall not permit any of its SubsidiariesSubsidiaries to) enter into any retail store leases without the prior written consent of Parent, such consent not to be unreasonably withheld;
(mg) change its financial or Tax accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law;
(n) settle or compromise any material liability for Taxes or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return incur inventory other than in the ordinary course of business and on a basis consistent business;
(i) increase or agree to increase the compensation payable or to become payable to its directors, officers, employees or consultants, except for increases in salary or wages of employees in accordance with past practice that would materially and adversely affect its Tax liability; consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of a material amount of Taxes; practices, (ii) grant any power of attorney with respect to material Taxes; additional severance or termination pay to, or enter into any Tax Sharing Agreement employment or severance agreements with, any consultants, employees, officers or directors (iii) enter into any collective bargaining agreement (other than as required by law or extensions to existing agreements in the ordinary course of business), or (iv) establish, adopt, enter into or amend, in any manner materially adverse to the Company or its Subsidiaries, any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any directors, officers, employees or consultants;
(i) amend or propose to amend its Articles of Incorporation or Bylaws;
(j) incur any indebtedness for borrowed money other than intercompany indebtedness and indebtedness incurred in the ordinary course of business; PROVIDED, HOWEVER, in no event shall Company or any closing agreement of its Subsidiaries incur any indebtedness for borrowed money in excess of $50,000 in the aggregate without the written consent of Parent;
(k) take any action that would or other similar is reasonably likely to result in a breach of any covenant, agreement, representation or warranty set forth in this Agreement that is qualified as to materiality; or take any action that would or is reasonably likely to result in a breach of any covenant, agreement, representation or warranty set forth in this Agreement that is not so qualified, which breach is reasonably likely to have a Company Material Adverse Effect;
(l) make or rescind any material express or deemed election relating to Taxes, settle or compromise any material claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to Taxes, or change any method of accounting its methods of reporting income or deductions for federal income Tax purposespurposes from those employed in the preparation of its federal income tax return for the taxable year ending March 28, 1999, except as may be required by applicable law;
(m) settle any material litigation, such consent not to be unreasonably withheld;
(n) take, or agree in writing or otherwise to take, any of the actions described in Sections 6.1(a) through (m) above.
Appears in 2 contracts
Samples: Merger Agreement (Electronics Boutique Holdings Corp), Merger Agreement (Funco Inc)
Conduct of Business. During the period from the date of this Agreement to the Effective Time, except as consented to in writing in advance by VMware or as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) by this Agreement, Pivotal Company shall, and shall cause each of its Subsidiaries subsidiaries to, carry on its business their respective businesses in the ordinary coursecourse in substantially the same manner as heretofore conducted and, including its development and sales efforts as currently contemplatedto the extent consistent therewith, and use all commercially reasonable efforts to (i) preserve intact its their current business organizationorganizations, assets, rights and properties, (ii) keep available the services of its their current officers, officers and employees and consultants and (iii) preserve its goodwill and its their relationships with customers, suppliers, licensors, licensees, distributors and others having material business dealings with itthem to the end that their goodwill and ongoing business shall be unimpaired at the Effective Time. In addition to and without Without limiting the generality of the foregoing, during the period from the date of this Agreement to the Effective Time, except (x) as set forth in section 5.1 of the Pivotal Disclosure Letter, (y) as specifically required by this Agreement or (z) as specifically required by applicable Law, Pivotal Company shall not, and shall not permit any of its Subsidiariessubsidiaries to, without VMware’s the prior written consent approval of Parent (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below determination by Parent shall not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), to:):
(a) (i) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock stock, other than dividends and distributions by any direct or other equity interests, except for dividends by a indirect wholly owned Subsidiary subsidiary of Pivotal the Company to Pivotal or any other wholly owned Subsidiary of Pivotalits parent, (ii) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii) split, combine, combine or reclassify or otherwise amend the terms of any of its capital stock or other equity 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 (iii) purchase, redeem or otherwise acquire any shares of capital stock of the Company or any of its subsidiaries or any other equity interestssecurities thereof or any rights, warrants or options to acquire any such shares or other securities (other than in connection with the exercise of Company Options);
(b) issue, deliver, sell, grant, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) any shares of its capital stock or stock, any other equity interests voting securities or any securities convertible into, exchangeable for or exercisable for any such shares or other equity interests, or any rights, warrants or options to acquire, any such shares shares, voting securities or other equity interests, or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive shares of capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof convertible securities (other than the issuance of Class A Shares upon the exercise of Pivotal Company Options, the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPP, in each case, that are outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with their terms as in effect on such date);
(c) amend or otherwise change, or authorize or propose to amend or otherwise change, its certificate of incorporation incorporation, by-laws or bylaws (other comparable charter or similar organizational documents);
(d) directly or indirectly except as set forth in Section 5.1(d) of the Disclosure Schedule, acquire or agree to acquire (iincluding, without limitation, by merger, consolidation or acquisitions of stock or assets) by merging or consolidating withany business, purchasing a substantial equity including through the acquisition of any interest in or a substantial portion of the assets of, making an investment in or loan or capital contribution to or in any other manner, any corporation, partnership, limited liability company, joint venture, association or other business organization or division thereof or (ii) any assets that are otherwise material to Pivotal and its Subsidiaries, except, in each case, for (1) capital expenditures which shall be subject to the limitations of clause (i) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes in the ordinary course of business consistent with Pivotal’s investment management policy, and except in the case of clause (ii), acquisitions of inventory, products or services in the ordinary course of business; Table of Contentsthereof;
(e) directly or indirectly sell, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien or, except in the ordinary course of business consistent with past practice and pursuant to existing contracts or commitments, sell, lease, license, transfer or otherwise dispose in whole or in part of any of its material properties, assets or rights (including any material Pivotal the Company Intellectual Property Registrations) Rights or any interest thereinother material properties or assets, except, except as disclosed in each case, (iSection 5.1(e) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior to of the Effective Time pursuant to existing Contracts that are not material to Pivotal and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses OutDisclosure Schedule;
(f) adopt except as set forth in Section 5.1(f) of the Disclosure Schedule, make or enter into a plan agree to make any new capital expenditures in excess of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization$500,000;
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, make any material Pivotal Intellectual Property Registrationstax election (unless required by law) or settle or compromise any material income tax liability;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, other than Pivotal or any direct or indirect wholly owned Subsidiary of Pivotal;
(i) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto that in the aggregate are in excess of $1,000,000;
(j) except as required by any judgment by a court of competent jurisdiction, (i) pay, discharge, settle discharge or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge or satisfaction satisfaction, in the ordinary course of business consistent with past practice and in accordance with their terms, or waive the benefits of, or agree to modify in any manner, any confidentiality, standstill or similar agreement to which the Company or any of its subsidiaries is a party;
(i) commence a lawsuit other than (i) for the routine collection of bills or (ii) in such cases where the Company in good faith determines that the failure to commence suit would result in a material impairment of a valuable aspect of the Company's business, provided that the Company consults with Parent prior to filing such suit;
(Bi) enter into or amend any employment or severance agreement or similar arrangements, (ii) make any determination as to amounts payable under any plan, arrangement, or agreement, providing for discretionary incentive compensation or bonus to any officer, director, employee or independent contractor of the Company or any of its subsidiaries or (iii) enter into, adopt, or amend any agreement, arrangement, or Benefit Plan so as to increase the liability (whether or not contingent) of the Company or the Parent or any of their subsidiaries in respect of compensation or benefits except as may be required by their terms law;
(k) incur any additional indebtedness (as defined in Section 4.1(p)(iv)) other than borrowings under the Company's senior bank credit facilities as in effect on the date of this Agreement of claims, liabilities or obligations reflected or reserved against in the most recent audited financial statements hereof; or
(or the notes theretol) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements in the ordinary course of business, (ii) cancel authorize any material Indebtedness owed to Pivotal or any of its Subsidiariesof, or (iii) waivecommit or agree to take any of, release, grant or transfer any right of material value;the foregoing actions; or
(k) (i) materially modify, materially amend, terminate, cancel, waive take or agree or commit to take any action that would make any representation or warranty of the Company hereunder inaccurate in any material right under respect at, or extend as of any Material Contract (other than renewals of Contracts with customers of Pivotal Products in time prior to, the ordinary course of business) Effective Time or (ii) enter into any Contract that if in effect on the date hereof would be a Material Contract, other than customer contracts entered into in the ordinary course of business;
(l) commence any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal or any of its Subsidiaries), or compromise, settle omit or agree or commit to settle omit to take any Legal Proceeding, other than Transaction Litigation which is subject action necessary to section 5.7), compromises, settlements prevent any such representation or agreements in the ordinary course of business that involve only the payment of money damages not in excess of $500,000 individually or $2,000,000 in the aggregate, warranty from being inaccurate in any case without the imposition of material respect at any equitable relief on, or the admission of wrongdoing by, Pivotal or any of its Subsidiaries;
(m) change its financial or Tax accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law;
(n) settle or compromise any material liability for Taxes or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liability; consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of a material amount of Taxes; grant any power of attorney with respect to material Taxes; enter into any Tax Sharing Agreement or any closing agreement or other similar agreement; or change any method of accounting for Tax purposes;such time.
Appears in 2 contracts
Samples: Merger Agreement (Calpine Corp), Merger Agreement (Sheridan Energy Inc)
Conduct of Business. During the period from the date of this Agreement to the Effective Time, except as consented to in writing in advance by VMware or as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) Except as expressly contemplated or permitted by this Agreement, Pivotal shall, and shall cause each of its Subsidiaries to, carry on its business in the ordinary course, including its development and sales efforts as currently contemplated, and use commercially reasonable efforts to (irequired by applicable Law or as contemplated by Section 5.1(a) preserve intact its business organization, assets, rights and properties, (ii) keep available the services of its current officers, employees and consultants and (iii) preserve its goodwill and its relationships with customers, suppliers, licensors, licensees, distributors and others having material business dealings with it. In addition to and without limiting the generality of the foregoingCompany Disclosure Schedule, during the period from the date of this Agreement to until the Effective Time, except unless Parent otherwise consents (x) as set forth in section 5.1 which consent shall not be unreasonably withheld, delayed or conditioned), each of the Pivotal Disclosure LetterCompany and each of its Subsidiaries shall conduct its business in the usual, (y) as specifically required by this Agreement or (z) as specifically required by applicable Lawregular and ordinary course and in all material respects consistent with past practice and use all reasonable efforts to preserve intact its present lines of business, Pivotal maintain its rights and franchises and preserve satisfactory relationships with Governmental Authorities, employees, customers and suppliers, and, without limiting the generality of the foregoing, the Company shall not, and shall not permit any of its Subsidiaries, without VMware’s prior written consent (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), Subsidiaries to:
(a) (i) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock or other equity interests, except for dividends by a wholly owned Subsidiary of Pivotal to Pivotal or any other wholly owned Subsidiary of Pivotal, (ii) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii) split, combine, reclassify or otherwise amend the terms of any of its capital stock or other equity 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 other equity interests;
(b) issue, deliver, sell, grant, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) grant any shares of its capital stock or other equity interests stock, or any securities or rights convertible into, exchangeable for or exercisable for, or evidencing the right to subscribe for any such shares or other equity interestsof its capital stock, or any rights, warrants or options to acquire, purchase any such shares or other equity interestsof its capital stock, or any stock appreciation rightssecurities or rights convertible into, “phantom” stock rightsexchangeable or exercisable for, performance unitsor evidencing the right to subscribe for, rights any shares of its capital stock, except for the issuance of shares of Company Common Stock required to receive be issued upon exercise or settlement of Options outstanding prior to the date hereof;
(ii) redeem, purchase or otherwise acquire any of its outstanding shares of capital stock stock, or any rights, warrants or options to acquire any shares of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Sharesits capital stock, including except (A) pursuant to Contracts as commitments in effect on as of the date hereof and set forth on Section 5.1(a) of the Company Disclosure Schedule or (other than B) in connection with withholding to satisfy Tax obligations with respect to Options and the issuance Company Stock Units, acquisitions in connection with the forfeiture of Class A Shares upon equity awards, or acquisitions in connection with the net exercise of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPP, in each case, that are outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with their terms as in effect on such date);
(ciii) amend (A) declare, authorize, set aside for payment or otherwise changepay any dividend on, or authorize make any other distribution (whether in cash, stock, property or propose otherwise) in respect of, any shares of its capital stock, other than dividends paid by any Subsidiary of the Company to amend the Company or otherwise changeany wholly-owned Subsidiary of the Company or (B) adjust, split, combine, subdivide or reclassify any shares of its certificate of incorporation or bylaws (or similar organizational documents)capital stock;
(div) directly or indirectly acquire or agree to acquire (iA) by merging or consolidating withincur any Indebtedness, purchasing a substantial equity interest in or a substantial portion of the assets of, making an investment in or loan or capital contribution to or in any other manner, any corporation, partnership, association or other business organization or division thereof or (ii) any assets that are otherwise material to Pivotal and its Subsidiaries, except, in each case, except for Indebtedness (1) capital expenditures incurred to replace, renew, extend, refinance or refund any existing Indebtedness the availability of which shall be subject will expire pursuant to its terms on before the limitations of clause (i) below and End Date, (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes borrowed money incurred in the ordinary course of business consistent (including with Pivotalregard to underwriting targets) with past practice to acquire any defaulted or charged-off accounts receivable portfolios, which, for the avoidance of doubt, shall mean defaulted or charged-off accounts receivable portfolios reasonably expected to have a net, unlevered ten percent (10%) internal rate of return assuming an eleven and four-tenths percent (11.4%) allocation of the Company’s investment management policyoverhead costs, and except in addition to appropriate variable costs, related to such acquisitions (a “Permitted Portfolio Acquisition”) and, in any event, not above (x) the limits set forth in the case Company’s Amended and Restated Credit Agreement dated November 14, 2011, between the Company, JPMorgan Chase Bank, N.A. and the other lenders thereto and (y) the amounts contemplated by the 2013 Company Plan, a copy of clause (ii), acquisitions of inventory, products or services in the ordinary course of business; Table of Contents
(e) directly or indirectly sell, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien or otherwise dispose in whole or in which is attached hereto as part of Section 5.1(a) of the Company Disclosure Schedule, or (3) among the Company and any of its material properties, assets wholly-owned Subsidiaries or rights (including among any material Pivotal Intellectual Property Registrations) or any interest therein, except, in each caseof such Subsidiaries, (iB) salesassume, pledgesguarantee, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Out;
(f) adopt or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume endorse or otherwise become liable foror responsible (whether directly, contingently or repayotherwise) for the obligations of any other Person except with respect to obligations of direct or indirect wholly-owned Subsidiaries of the Company, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (iiC) make any loans, advances or capital contributions to, to or investments in, in any other Person, other than Pivotal or any direct or indirect wholly owned Subsidiary of Pivotal;
(i) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto that in the aggregate are in excess of $1,000,000;
(j) Person except as required by any judgment by a court of competent jurisdiction, (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge or satisfaction for advances in the ordinary course of businessbusiness consistent with past practice to employees of the Company or any of its Subsidiaries or (D) except in connection with any Permitted Portfolio Acquisition or pursuant to the terms of any Contract providing for Indebtedness existing as of the date of this Agreement or Indebtedness otherwise permitted to be incurred pursuant to this Section 5.1(a)(iv), mortgage or pledge any of its or its Subsidiaries’ assets, tangible or intangible, or create or suffer to exist any Lien thereupon (other than Permitted Liens);
(v) sell any of its properties or assets that are material to the Company and its Subsidiaries taken as a whole, except (A) sales, leases, rentals and licenses in the ordinary course of business (it being acknowledged that the Company and its Subsidiaries do not sell defaulted or charged-off accounts in the ordinary course and shall not sell any defaulted or charged-off accounts between the date hereof and the Effective Time), (B) pursuant to Contracts in force on the date of this Agreement and set forth on Section 5.1(a) of the Company Disclosure Schedule, (C) abandonments or other dispositions of inventory, equipment or other assets that are no longer material to the conduct of the business of the Company or any of its Subsidiaries or (D) transfers among the Company and its Subsidiaries;
(vi) make capital expenditures other than as budgeted (both as to time and amount) in the 2013 Company Plan (except with respect to budgeted amounts for July 2013, which shall not exceed $568,000);
(vii) make any acquisition (including by merger) of (A) the capital stock or a material portion of the assets of any other Person, except pursuant to Contracts in force on the date of this Agreement and set forth on Section 5.1(a) of the Company Disclosure Schedule or (B) any defaulted or charged-off accounts receivable portfolios (other than Permitted Portfolio Acquisitions (x) in any calendar month ending after the date hereof in an aggregate amount not in excess of $23,000,000 per month and (y) in any three-consecutive-calendar month period commencing after the date hereof in an aggregate amount not in excess of $45,000,000);
(viii) increase in any respect the compensation of any of its (A) directors or executive officers, except as required by their pursuant to applicable Law or the terms as of Company Plans or other employee benefit plans or arrangements in effect on the date of this Agreement of claims, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (CB) incurred since the date other employees, other than increases in salaries, wages and benefits of such financial statements in the ordinary course of business, (ii) cancel any material Indebtedness owed to Pivotal or any of its Subsidiaries, or (iii) waive, release, grant or transfer any right of material value;
(k) (i) materially modify, materially amend, terminate, cancel, waive any material right under or extend any Material Contract employees (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of businessexecutive officer and directors) or (ii) enter into any Contract that if in effect on the date hereof would be a Material Contract, other than customer contracts entered into in the ordinary course of business;
(l) commence any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal or any of its Subsidiaries), or compromise, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements made in the ordinary course of business consistent with past practice in connection with the Company’s annual or quarterly compensation review cycle (provided that involve only payments of cash bonuses and other cash grants and cash awards made in the payment of money damages ordinary course consistent with past practice shall not constitute an increase in compensation);
(ix) hire employees or independent contractors, in each case, with aggregate annual compensation in excess of $500,000 individually or $2,000,000 in 150,000, except to fill vacancies existing as of the aggregate, in any case without the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal or any of its Subsidiariesdate hereof and to replace departed employees and independent contractors;
(mx) change its financial except to the extent required to comply with applicable Law or Tax accounting methodsthe existing terms of any Company Plan previously disclosed to Parent: (A) grant any severance, principles retention or practicestermination pay to, except insofar as may have been or amend any existing severance, retention or termination arrangement with, any current or former director, officer or employee, (B) increase or accelerate the payment or vesting of, benefits payable under any existing severance, retention or termination pay policies or employment agreements, (C) enter into or amend any Company Plan, (D) establish, adopt or amend any collective bargaining agreement or any Company Plan, (E) pay any special bonus or special remuneration to any director, officer, consultant, independent contractor or employee, or (F) pay any benefit not required by a change any plan or arrangement as in GAAP or applicable Law;
(n) settle or compromise any material liability for Taxes or surrender any material claim for a refund effect as of Taxes; file any amended Tax Return or claim for Tax refund; makethe date hereof, revoke or modify any material Tax electionother than, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than with respect to non-officer employees, in the ordinary course of business and on a basis consistent with past practice practice;
(xi) make any change to its methods of accounting, except as required by GAAP (or any interpretation thereof), Regulation S-X of the Exchange Act, as required by a Governmental Authority or quasi-Governmental Authority (including the Financial Accounting Standards Board or any similar organization) or as required by applicable Law;
(xii) amend the Company Charter Documents or organizational documents of any Subsidiary of the Company;
(xiii) adopt a plan or agreement of complete or partial liquidation or dissolution;
(xiv) take any action that would reasonably be expected to prevent or materially impede, interfere with, hinder or delay the consummation of the Transactions;
(xv) except as reasonably contemplated by the scope of the 2013 Company Plan, change in any material respect (A) its collection strategy offered to consumers, including discount or settlement rates, (B) the frequency of mail volumes and adversely affect telephone calls to consumers or change the percentage of legal suits to collect amounts owed by consumers; (C) the commission structure offered to third party agencies and law firms; (D) its current practice of recalling of accounts from law firms; or (E) the commission structure of Company Employees acting as collection agents;
(xvi) enter into or amend or modify in any material respect, or consent to the termination of (other than at its stated expiry date), any (A) Material Contract or any other Contract that, if in effect as of the date hereof, would constitute a Material Contract, (B) Contract with a third party agency or law firm; (C) Contract with a data vendor; or (D) existing portfolio purchase and sale Contracts;
(xvii) (A) make or change any material Tax liability; election, (B) file any material amended Tax Return, (C) agree to any material adjustment of any Tax attribute, (D) change (or make a request to any Governmental Authority to change) any of its methods of reporting income or deductions for federal income Tax purposes, (E) file any claim for a material refund of Taxes, (F) consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment that would reasonably be expected to adversely affect Parent’s Tax liability, (G) settle or compromise any suit, claim, action, investigation, proceeding or audit pending against or with respect to the Company or any of its Subsidiaries in respect of a any material amount of Tax or enter into any material closing agreement that would reasonably be expected to adversely affect Parent’s Tax liability for any taxable period beginning on or after the Effective Time or otherwise, or (H) enter into a Tax sharing, indemnification or allocation agreement (other than any Contract the primary purpose of which is not the sharing of Taxes; grant );
(xviii) settle or enter into any power of attorney settlement agreement with respect to material Taxes; any outstanding litigation or other dispute, except that, notwithstanding the foregoing, the Company may settle or enter into any Tax Sharing Agreement settlement agreement with respect to any outstanding litigation or other dispute with any party (other than a Governmental Authority) where (A) the aggregate cash amount payable by the Company or its Subsidiaries as a result of such settlement does not exceed $100,000 and (B) the terms of such settlement or settlement agreement (not involving the payment of money) do not require the taking (or omission) of any action by the Company or any closing agreement of its Subsidiaries which is materially inconsistent with past practice regarding actions (not involving the payment of money) taken or omitted to be taken by any of them in connection with settlements and settlement agreements relating to substantially similar litigation, claims, suits, proceedings or other similar agreementdisputes;
(xix) enter into any new line of business; or
(xx) agree in writing to take any of the foregoing actions.
(b) Parent shall not, and shall not permit any of its Subsidiaries to, take, or change agree or commit to take, any method action that would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede, interfere with, hinder or delay the consummation by Parent or any of accounting for Tax purposes;its Subsidiaries of the Transactions.
Appears in 2 contracts
Samples: Merger Agreement (Asset Acceptance Capital Corp), Merger Agreement (Encore Capital Group Inc)
Conduct of Business. During the period from the date of this Agreement to the Effective Time, except Except as consented to in writing in advance by VMware expressly permitted or as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) by this Agreement, Pivotal shall, and shall cause each of its Subsidiaries to, carry on its business in the ordinary course, including its development and sales efforts as currently contemplated, and use commercially reasonable efforts to (i) preserve intact its business organization, assets, rights and properties, (ii) keep available the services of its current officers, employees and consultants and (iii) preserve its goodwill and its relationships with customers, suppliers, licensors, licensees, distributors and others having material business dealings with it. In addition to and without limiting the generality of the foregoingrequired by applicable Law, during the period from the date of this Agreement to until the Effective Time, except earlier of (x) termination of this Agreement in accordance with Section 9.1 and (y) the Closing, unless the Investors otherwise consent in writing, the Company shall, and shall cause the Company Subsidiaries to, conduct their businesses only in the ordinary course of business in all material respects consistent with past practice. Without limiting the foregoing, except as set forth in section 5.1 of the Pivotal Disclosure Letter, (y) as specifically expressly permitted or required by this Agreement or (z) Agreement, as specifically required by applicable LawLaw or as consented to in writing by the Investors, Pivotal the Company shall not, and shall not permit any of its Subsidiariesthe Company Subsidiaries to, without VMware’s prior written consent (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), to:
(a) (i) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock or other equity interests, except for dividends by a wholly owned Subsidiary of Pivotal to Pivotal or any other wholly owned Subsidiary of Pivotal, (ii) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on between the date of this Agreement and (B) the acquisition by Pivotal earlier to occur of Pivotal Options or Pivotal RSUs on the date termination of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on Section 9.1 and the date of this AgreementClosing, or (iii) split, combine, reclassify or otherwise amend the terms of take any of its capital stock or other equity interests or issue or authorize the issuance following actions:
(a) take any action that, if taken immediately following the Closing, would require the approval of the holders of a majority of the Series A Preferred Stock (on an as-converted basis, including any other securities in respect of, in lieu of or in substitution for shares of its capital stock Common Stock issued upon the conversion thereof) that is held by the Investors or other equity interestsany of their respective Affiliates;
(b) issueestablish a record date for, deliverdeclare, sellset aside for payment or make payment in respect of, grant, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act dividend or other applicable securities Laws) distribution upon any shares of its capital stock or other equity interests or any securities convertible into, exchangeable for or exercisable for any such shares or other equity interests, or any rights, warrants or options to acquire, any such shares or other equity interests, or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive shares of capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof (other than the issuance of Class A Shares upon the exercise of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPP, in each case, that are outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with their terms as in effect on such date)Company;
(c) amend create, issue, sell or otherwise changegrant or authorize the issuance, sale or grant of any equity securities of the Company or any of the Company Subsidiaries with rights or preferences senior to, or authorize or propose to amend or otherwise changepari passu with, its certificate of incorporation or bylaws (or similar organizational documents)the Series A Preferred Stock;
(d) directly enter into any transaction that, if consummated, would cause the Company to be delisted from the NASDAQ Stock Market or indirectly acquire prohibit the Company from being listed or agree to acquire (i) by merging or consolidating with, purchasing a substantial equity interest in or a substantial portion of the assets of, making an investment in or loan or capital contribution to or in quoted for trading on any other mannerU.S. national securities exchange; provided, any corporationhowever, partnership, association or other business organization or division thereof or (ii) any assets that are otherwise material to Pivotal and its Subsidiaries, except, in each case, for (1) capital expenditures which shall be subject to the limitations of this clause (id) below and (2) purchases shall not apply to any transaction that is a "Change of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes Control" as defined in the ordinary course Series A Certificate of business consistent with Pivotal’s investment management policy, and except in the case of clause (ii), acquisitions of inventory, products or services in the ordinary course of business; Table of ContentsDesignations;
(e) directly amend or indirectly sell, lease, license, sell and leaseback, abandon, allow propose to lapse, mortgage amend the Company Charter Documents or otherwise encumber or subject to any Lien or otherwise dispose the Subsidiary Charter Documents in whole or in part of any of its material properties, assets or rights (including any material Pivotal Intellectual Property Registrations) or any interest therein, except, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior a manner that is materially adverse to the Effective Time pursuant to existing Contracts that are not material to Pivotal rights and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Outpreferences of the Series A Preferred Stock;
(f) adopt take any action that would reasonably be expected to prevent or enter into a plan materially impede, interfere with, hinder or delay the consummation of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;the Transactions; or
(g) fail to maintainagree, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, other than Pivotal or any direct or indirect wholly owned Subsidiary of Pivotal;
(i) incur resolve or commit to incur any capital expenditure or authorization or commitment with respect thereto that in the aggregate are in excess of $1,000,000;
(j) except as required by any judgment by a court of competent jurisdiction, (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge or satisfaction in the ordinary course of business, (B) as required by their terms as in effect on the date of this Agreement of claims, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements in the ordinary course of business, (ii) cancel any material Indebtedness owed to Pivotal or take any of its Subsidiaries, or (iii) waive, release, grant or transfer any right of material value;
(k) (i) materially modify, materially amend, terminate, cancel, waive any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (ii) enter into any Contract that if in effect on the date hereof would be a Material Contract, other than customer contracts entered into in the ordinary course of business;
(l) commence any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal or any of its Subsidiaries), or compromise, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements in the ordinary course of business that involve only the payment of money damages not in excess of $500,000 individually or $2,000,000 in the aggregate, in any case without the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal or any of its Subsidiaries;
(m) change its financial or Tax accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law;
(n) settle or compromise any material liability for Taxes or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liability; consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of a material amount of Taxes; grant any power of attorney with respect to material Taxes; enter into any Tax Sharing Agreement or any closing agreement or other similar agreement; or change any method of accounting for Tax purposes;foregoing actions.
Appears in 2 contracts
Samples: Securities Purchase Agreement, Securities Purchase Agreement (Rimini Street, Inc.)
Conduct of Business. During the period (a) The Company covenants and agrees as to itself and its Subsidiaries (as applicable) that from the date hereof and continuing until the earlier to occur of this Agreement to the Control Date or the Effective Time (the “Changeover Time”), except as consented to in writing in advance by VMware or as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) permitted by this Agreement, Pivotal shallas set forth in Section 5.1 of the Company Disclosure Letter, or to the extent that Parent shall otherwise consent in writing, such consent not to be unreasonably conditioned, withheld or delayed:
(i) the Company and shall cause each of its Subsidiaries to, carry on its business shall conduct their businesses in all material respects in the ordinary course, including its development and sales efforts as currently contemplated, and use commercially reasonable efforts to (i) preserve intact its course of business organization, assets, rights and properties, (ii) keep available the services of its current officers, employees and consultants and (iii) preserve its goodwill and its relationships consistent with customers, suppliers, licensors, licensees, distributors and others having material business dealings with itpast practice. In addition to and without Without limiting the generality of the foregoing, during the period from Company and its Subsidiaries shall use commercially reasonable efforts to preserve intact their current business organizations, to maintain in effect all material governmental permits pursuant to which the date of this Agreement to the Effective Time, except (x) as set forth in section 5.1 of the Pivotal Disclosure Letter, (y) as specifically required by this Agreement Company or (z) as specifically required by applicable Law, Pivotal shall not, and shall not permit any of its SubsidiariesSubsidiaries currently operates, without VMware’s prior written consent to maintain in effect their existing relations with material customers, suppliers, distributors, and others having significant business dealings with them, and to comply in all material respects with all Laws, orders and permits applicable to them;
(which consent, in ii) neither the cases Company nor any of the matters set forth in subclauses (e), (g), its Subsidiaries shall (i)) amend or propose to amend their respective Organizational Documents; (ii) split, combine or reclassify its outstanding shares of capital stock; (j) or (k) below shall not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), to:
(a) (iiii) declare, set aside or pay any dividends on, or make any other distributions (whether dividend payable in cash, stock or property) property in respect of, of any of its capital stock (other than dividends from its direct or other equity interestsindirect wholly-owned Subsidiaries to it or a wholly-owned Subsidiary); or (iv) except as required under agreements filed or listed as exhibits to the Company SEC Reports, except for dividends by a wholly owned Subsidiary of Pivotal to Pivotal or any other wholly owned Subsidiary of Pivotal, (ii) purchaserepurchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii) split, combine, reclassify or otherwise amend the terms of any of its capital stock or other equity 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 other equity interests;
(b) issue, deliver, sell, grant, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) any shares of its capital stock or other equity interests any securities convertible into or exchangeable or exercisable for any shares of its capital stock or permit any of its Subsidiaries to purchase or otherwise acquire any shares of its capital stock or any securities convertible into, into or exchangeable for or exercisable for any such shares of its capital stock;
(iii) except as required under agreements in existence (which, for those agreements not filed with the Company SEC Reports, the aggregate amounts involved are not material) or as required by applicable Law, neither the Company nor any of its Subsidiaries shall increase the compensation payable or that could become payable by the Company or any of its Subsidiaries, or pay or commit to pay any bonus or other equity interestsform of compensation (including severance or termination pay and other benefits), to their respective directors or officers, or to their respective employees in a manner either not in the ordinary course of business consistent with past practice or global in nature (provided, that such employees may receive relocation and other benefits in connection with such employees’ relocation to, or commencement of employment at, the Company’s facility in Ardsley, New York, substantially consistent with the Company’s past practices regarding such relocation), or create or amend or terminate any rightsof the Company Benefit Plans or any outstanding Company Options, warrants Company RSUs, Company DSUs or options the ESPPs or enter into any employment agreements or offer letters with current or new employees (other than offer letters with new employees who will not be directors or officers that contemplate (other than in the United Kingdom) “at will” employment without severance benefits (other than the CIC Severance Plans));
(iv) except for (x) dispositions of obsolete equipment or assets or dispositions of assets being replaced, in each case in the ordinary course of business consistent with past practice and (y) dispositions by the Company or its Subsidiaries of its assets in accordance with the terms of agreements filed or listed as exhibits to the Company SEC Reports, neither the Company nor any Subsidiary shall (i) directly or indirectly, sell, transfer, lease, pledge, mortgage, encumber or otherwise dispose of any material portion of its property or assets (including stock or other ownership interests of its Subsidiaries) or (ii) other than supplies in the ordinary course of business consistent with past practice, acquire any material amount of assets or capital stock of any other person;
(v) neither the Company nor any of its Subsidiaries shall make any material change in accounting principles, practices or methods which is not required by U.S. GAAP;
(vi) neither the Company nor any of its Subsidiaries shall issue, sell, pledge, dispose of or encumber any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any such shares or other equity interests, or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive shares of its capital stock of VMware on a deferred basis any class or any other rights linked to the value of Class A Shares property or Class B Sharesassets, including pursuant to Contracts as in effect on the date hereof (other than the issuance of Class A Shares upon the exercise of Pivotal Company Options, the settlement of Pivotal Company RSUs or Company DSUs, upon the exercise conversion of purchase rights under Convertible Notes or pursuant to the Pivotal ESPPESPPs, in each case, that are outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with their terms as in effect on such date)terms;
(cvii) amend neither the Company nor any of its Subsidiaries (as applicable) shall, except as provided for in the Company’s 2010 capital expenditure budget, a true and correct copy of which has previously been provided to Parent, incur individually or otherwise change, or authorize or propose to amend or otherwise change, its certificate of incorporation or bylaws (or similar organizational documents)in the aggregate any material capital expenditures;
(dviii) directly or indirectly acquire or agree to acquire (i) by merging or consolidating with, purchasing a substantial equity interest in or a substantial portion of neither the assets of, making an investment in or loan or capital contribution to or in any other manner, any corporation, partnership, association or other business organization or division thereof or (ii) any assets that are otherwise material to Pivotal and its Subsidiaries, except, in each case, for (1) capital expenditures which shall be subject to the limitations of clause (i) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes in the ordinary course of business consistent with Pivotal’s investment management policy, and except in the case of clause (ii), acquisitions of inventory, products or services in the ordinary course of business; Table of Contents
(e) directly or indirectly sell, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien or otherwise dispose in whole or in part of Company nor any of its material properties, assets or rights (including Subsidiaries shall make any material Pivotal Intellectual Property Registrations) or any interest therein, except, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Out;
(f) adopt or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (ii) make any loans, advances or capital contributions to, or investments in, any other Personperson, other than Pivotal or any direct or indirect wholly owned Subsidiary advances of Pivotal;
(i) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto that in the aggregate are in excess of $1,000,000;
(j) except as required by any judgment by a court of competent jurisdiction, (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge or satisfaction employee expenses in the ordinary course of business, business consistent with past practice;
(Bix) as required by their terms as in effect on neither the date of this Agreement of claims, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements in the ordinary course of business, (ii) cancel any material Indebtedness owed to Pivotal or Company nor any of its Subsidiaries, Subsidiaries shall cancel or (iii) waive, release, grant terminate without reasonable substitute policy therefor any material insurance policy naming the Company as a beneficiary or transfer any right of material valuea loss payee;
(kx) (i) materially modifyneither the Company nor any of its Subsidiaries shall commence or settle any lawsuit, materially amendthreat of any lawsuit or proceeding or other investigation by or against the Company or any Subsidiary of the Company or relating to any of their businesses, terminate, cancel, waive any material right under properties or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (ii) enter into any Contract that if in effect on the date hereof would be a Material Contractassets, other than customer contracts settlements entered into in the ordinary course of businessbusiness consistent with past practice that require only the payment of monetary damages not exceeding $1,000,000 by the Company and its Subsidiaries, or waive, release or assign any material rights or claims;
(lxi) commence neither the Company nor any Legal Proceeding (of its Subsidiaries shall 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 than a Legal Proceeding as a result rights to acquire any debt securities of a Legal Proceeding commenced against Pivotal the Company or any of its Subsidiaries), guarantee any debt securities of another person, enter into any “keep well” or other agreement to maintain any financial statement condition of any other person (other than any wholly-owned Subsidiary of it) or enter into any arrangement having the economic effect of any of the foregoing, or compromiseincur any material lien on any assets or property;
(xii) neither the Company nor any of its Subsidiaries shall (i) enter into, settle modify or amend any material agreement with respect to its Intellectual Property or with respect to the intellectual property of any third party, or enter into any collaboration, co-marketing or co-promotion agreement regarding any of the Company’s compounds or Products or (ii) directly or indirectly sell, license or otherwise transfer or encumber in whole or in part (and not agree directly or indirectly to settle sell, license or otherwise transfer or encumber in whole or in part) any Legal Proceedingrights or assets related to or in connection with the Commercial Product other than (x) sales of inventory of the Commercial Product in the ordinary course consistent with past practice or (y) as provided in, and only to the extent required by, agreements to which the Company is a party and which have been filed or listed as an exhibit to a Company SEC Report on or prior to February 26, 2010;
(xiii) neither the Company nor any of its Subsidiaries shall enter into, modify or amend in a manner adverse to the Company, or terminate any Material Contract or waive, release or assign any material rights or claims thereunder, in each case, in a manner adverse to the Company, other than Transaction Litigation which is subject to section 5.7)any entry into, compromisesmodification, settlements amendment or agreements termination of any such Material Contract in the ordinary course of business that involve only consistent with past practice;
(xiv) neither the payment Company nor any Subsidiary shall, to the extent the effect of money damages not in excess doing so would be to materially increase the present or future Tax liability or to materially decrease the present or future Tax assets, of $500,000 individually or $2,000,000 in the aggregate, in any case without the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal Company or any of its Subsidiaries;
Subsidiaries (mi) make or change its financial or any Tax accounting methods, principles or practices, election; (ii) except insofar as may have been required by a change in GAAP or applicable Law;
, file any amended Tax Return; (niii) enter into any closing agreement with respect to Taxes; (iv) settle any Tax claim or compromise any material liability for Taxes or assessment; (v) surrender any material right to claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liability; (vi) consent to any extension or waiver of the limitation limitations period applicable for the assessment of any Tax;
(xv) neither the Company nor any Subsidiary will adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any Subsidiary (other than the Merger);
(xvi) neither the Company nor any Subsidiary will take or permit any action that would reasonably be expected to result in any claim of the conditions to the Merger set forth in Article VII or assessment any of the conditions to the Offer set forth in respect Annex I not being satisfied or that could materially delay the consummation of, or materially impair the ability of a material amount the Company to consummate, the Transactions in accordance with the terms of Taxesthis Agreement;
(xvii) neither the Company nor any Subsidiary shall enter into, amend, modify or supplement any agreement with any officer or director; grant and
(xviii) neither the Company nor any power of attorney with respect to material Taxes; its Subsidiaries shall authorize or enter into any Tax Sharing Agreement or any closing an agreement or other similar agreement; or change any method of accounting for Tax purposes;to do anything prohibited by this Section 5.1.
Appears in 2 contracts
Samples: Merger Agreement (Astellas Pharma Inc.), Merger Agreement (Osi Pharmaceuticals Inc)
Conduct of Business. During the period from the date of this Agreement to the Effective Time, except as consented to in writing in advance by VMware or as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) by this Agreement, Pivotal Company shall, and shall cause each of its Subsidiaries subsidiaries to, carry on its business their businesses in the ordinary coursecourse of business in substantially the same manner as heretofore conducted and, including its development and sales efforts as currently contemplatedto the extent consistent therewith, and use commercially all reasonable efforts to (i) preserve intact its their current business organizationorganizations, assets, rights and properties, (ii) keep available the services of its their current officers, officers and employees (as a group) and consultants and (iii) preserve its goodwill and its their relationships with customers, suppliers, licensors, licensees, distributors and others having material business dealings with itthem. In addition to and without Without limiting the generality of the foregoing, during the period from the date of this Agreement to the Effective Time, except (x) as set forth in section 5.1 of the Pivotal Disclosure Letter, (y) as specifically required contemplated by this Agreement or (z) as specifically required by applicable Law, Pivotal the Company shall not, and shall not permit any of its Subsidiariessubsidiaries to, without VMware’s the prior written consent approval of Parent (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall approval will not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), to:):
(a) (i) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock stock, other than dividends and distributions by any direct or other equity interests, except for dividends by a wholly indirect wholly-owned Subsidiary subsidiary of Pivotal the Company to Pivotal or any other wholly owned Subsidiary of Pivotal, its parent; (ii) purchaseadjust, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii) split, combine, combine or reclassify or otherwise amend the terms of any of its capital stock or other equity 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 (iii) purchase, redeem or otherwise acquire any shares of capital stock of the Company or any of its 25 subsidiaries or any other equity interestssecurities thereof or any rights, warrants or options to acquire any such shares or other securities;
(b) issue, deliver, sell, grant, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) any shares of its capital stock or stock, any other equity interests voting securities or any securities convertible into, exchangeable for or exercisable for any such shares or other equity interests, or any rights, warrants or options options, including Company Options, to acquire, any such shares shares, voting securities or other equity interests, or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive shares of capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof convertible securities (other than the issuance of Class A Shares upon the exercise of Pivotal Options, the settlement of Pivotal RSUs Company Options or upon the exercise or conversion of purchase rights under Company Warrants outstanding as of the Pivotal ESPP, date hereof in each case, that are outstanding on the date of this Agreement and Made Available to VMware and otherwise case in accordance with their the terms as in effect on such dateand provisions thereof);
(c) except for the Company's proposed name change to "Matrix Bancorp," amend its Articles of Incorporation, bylaws or otherwise change, other comparable charter or authorize or propose to amend or otherwise change, its certificate of incorporation or bylaws (or similar organizational documents);
(d) directly amend, modify or indirectly acquire waive any provision of any material contract or agree agreement to acquire (i) by merging which the Company or consolidating with, purchasing a substantial equity interest in or a substantial portion any of the assets ofCompany's subsidiaries is a party, making an investment in or loan or capital contribution to or in any other mannerincluding, without limitation, any corporation, partnership, association or other business organization or division thereof or (ii) any assets that are otherwise material to Pivotal and its Subsidiaries, except, in each case, for (1) capital expenditures which shall be subject to the limitations of clause (i) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes such agreements identified in the ordinary course of business consistent with Pivotal’s investment management policy, and except in the case of clause (ii), acquisitions of inventory, products or services in the ordinary course of business; Table of ContentsDisclosure Schedule;
(e) directly or indirectly sell, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien or sell, lease, license, transfer or otherwise dispose in whole or in part of any material properties or assets, except in the ordinary course of its material properties, assets business consistent with past practice or rights (including any material Pivotal Intellectual Property Registrations) or any interest therein, except, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Outcontracts or commitments;
(f) adopt amend, modify or enter into a plan waive any material term of complete any outstanding security of the Company or partial liquidation, dissolution, restructuring, recapitalization or other reorganizationits subsidiaries;
(g) fail incur, assume, guarantee or become obligated with respect to maintainany indebtedness (as defined in Section 4.1(q) hereof), other than drawings on existing revolving credit facilities listed in Section 4.1(q) of the Disclosure Schedule, in the ordinary course of business, consistent with past practice and in accordance with the terms thereof, or allow incur, assume, guarantee or become obligated with respect to lapse, or abandon, including by failure to pay any other material obligations other than in the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrationsordinary course of business and consistent with past practice;
(h) (i) incurexcept for the Company's proposed acquisition of The Leader Mortgage Company and the leasehold improvements to the Company's facilities, create, assume make or agree to make any new capital expenditures or acquisitions of assets or property or other acquisitions or commitments in excess of $50,000 individually or $200,000 in the aggregate or otherwise become liable for, acquire or repay, cancel, forgive agree to acquire any material assets or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, other than Pivotal or any direct or indirect wholly owned Subsidiary of Pivotalproperty;
(i) incur make any material tax election or commit to incur take any capital expenditure material tax position (unless required by law) or authorization change its fiscal year or commitment with respect thereto that accounting methods, policies or practices (except as required by changes in the aggregate are in excess of $1,000,000GAAP) or settle or compromise any material income tax liability;
(j) except as required by enter into any, or commit to enter into, any judgment by a court lease, loan, advance or capital contributions to or investment in any person other than in the ordinary course of competent jurisdiction, business consistent with past practice;
(ik) pay, discharge, settle discharge or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge or 26 satisfaction in the ordinary course of businessthereof, (B) as required by their terms as in effect on the date of this Agreement of claims, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements in the ordinary course of business, (ii) cancel any material Indebtedness owed to Pivotal or any of its Subsidiaries, or (iii) waive, release, grant or transfer any right of material value;
(k) (i) materially modify, materially amend, terminate, cancel, waive any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (ii) enter into any Contract that if in effect on the date hereof would be a Material Contract, other than customer contracts entered into in the ordinary course of business;
(l) commence any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal or any of its Subsidiaries), or compromise, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements in the ordinary course of business that involve only consistent with past practice and in accordance with their terms or the settlement or other disposition of litigation matters by a payment of money damages or payments not in excess of exceeding $500,000 individually 25,000, or $2,000,000 in release or waive any material rights or claims, or waive the aggregatebenefits of, or agree to modify in any case without manner, any confidentiality, standstill or similar agreement to which the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal Company or any of its Subsidiariessubsidiaries is a party;
(mi) change grant to any current or former director, officer or employee of the Company or any of its financial subsidiaries any material increase in compensation or Tax accounting methods, principles or practicesbenefits, except insofar as may have been required by a change in GAAP for employees who are not officers or applicable Law;
(n) settle or compromise any material liability for Taxes or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than directors in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liability; consent practice, (ii) grant to any extension such director, officer, or waiver employee any increase in severance or termination pay (including the acceleration in the exercisability of Company Options or in the vesting of Shares (or other property) except for automatic acceleration in accordance with the terms of the limitation period applicable to any claim Option Plan), or assessment in respect of a material amount of Taxes; grant any power of attorney with respect to material Taxes; (iii) enter into any Tax Sharing Agreement employment, deferred compensation, severance or any closing termination agreement or other similar agreementarrangement with or for the benefit of any such current or former director, officer, or employee;
(i) take or agree or commit to take any action that would make any representation or warranty of the Company hereunder inaccurate in any material respect at, or as of any time prior to, the Effective Time or (ii) 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 any such time; or
(n) authorize any of, or change commit or agree to take any method of accounting for Tax purposes;of, the foregoing actions.
Appears in 2 contracts
Samples: Merger Agreement (Matrix Capital Corp /Co/), Merger Agreement (Fidelity National Financial Inc /De/)
Conduct of Business. During (a) Except as expressly contemplated or permitted by this Agreement or Section 5.1 of the Company Disclosure Schedule or as required by applicable Law, during the period from the date of this Agreement to until the Effective TimeClosing, except as consented to in writing in advance by VMware unless the Purchaser otherwise consents (which consent shall not be unreasonably withheld or as otherwise expressly required or prohibited (including by delayed), the restrictions set forth in subclauses (a) through (r) below) by this Agreement, Pivotal Company shall, and shall cause each of its Subsidiaries to, carry on its business in the ordinary course, including its development and sales efforts as currently contemplated, and use commercially reasonable best efforts to (i) preserve intact conduct its business organization, assets, rights in all material respects in the ordinary course consistent with past practice and propertiespolicies, (ii) keep available the services of the officers and key employees of the Company and the officers and key employees of its current officersSubsidiaries that are material to the Company and its Subsidiaries taken as a whole, employees and consultants and (iii) preserve its goodwill and its relationships maintain in all material respects good relations with the material customers, supplierslenders, licensors, licensees, distributors suppliers and others other Persons having material business dealings relationships with it. In addition to and without limiting the generality Company or its Subsidiaries.
(b) Except as expressly contemplated or permitted by this Agreement or Section 5.1 of the foregoingCompany Disclosure Schedule or as required by applicable Law, during the period from the date of this Agreement to until the Effective TimeClosing, except unless the Purchaser otherwise consents (x) as set forth in section 5.1 of which consent shall not be unreasonably withheld or delayed), the Pivotal Disclosure Letter, (y) as specifically required by this Agreement or (z) as specifically required by applicable Law, Pivotal Company shall not, and shall not permit any cause each of its Subsidiaries, without VMware’s prior written consent (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall Subsidiaries not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), to:
(a) (i) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock or other equity interests, except for dividends by a wholly owned Subsidiary of Pivotal to Pivotal or any other wholly owned Subsidiary of Pivotal, (ii) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii) split, combine, reclassify or otherwise amend the terms of any of its capital stock or other equity 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 other equity interests;
(b) issue, deliversell or grant any Equity Interests, sell, grant, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) any shares of its capital stock or other equity interests or any securities or rights convertible into, exchangeable for or exercisable for, or evidencing the right to subscribe for any such shares or other equity interestsEquity Interests, or any rights, warrants or options to acquirepurchase any Equity Interests; (B) redeem, purchase or otherwise acquire any such shares or other equity interestsof its outstanding Equity Interests, or any stock appreciation rights, warrants or options to acquire any Equity Interests; (C) declare, set aside for payment or pay any dividend on, or make any other distribution in respect of, any Equity Interests; or (D) split, combine, subdivide or reclassify any Equity Interests;
(ii) sell, create a Lien upon or otherwise dispose of any of its properties or assets, except (A) (1) sales, leases, and rentals of inventory, (2) non-exclusive licenses in connection therewith and (3) sale-leaseback transactions in connection with the “phantomAirport” stock rights, performance units, rights to receive shares of capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof (other than the issuance of Class A Shares upon the exercise of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPPbusiness, in each case, that are outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with their terms as in effect on such date);
(c) amend or otherwise change, or authorize or propose to amend or otherwise change, its certificate of incorporation or bylaws (or similar organizational documents);
(d) directly or indirectly acquire or agree to acquire (i) by merging or consolidating with, purchasing a substantial equity interest in or a substantial portion of the assets of, making an investment in or loan or capital contribution to or in any other manner, any corporation, partnership, association or other business organization or division thereof or (ii) any assets that are otherwise material to Pivotal and its Subsidiaries, except, in each case, for (1) capital expenditures which shall be subject to the limitations of clause (i) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes case in the ordinary course of business consistent with Pivotal’s investment management policypast practices, (B) pursuant to Contracts in force on the date of this Agreement and except set forth in the case Company Disclosure Schedule, (C) dispositions of clause obsolete assets or (ii), acquisitions of inventory, products or services in D) transfers among the ordinary course of business; Table of ContentsCompany and its wholly-owned Subsidiaries;
(eiii) directly increase in any material respect the salary, benefits, bonuses or indirectly sell, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien or otherwise dispose in whole or in part other compensation of any of its material propertiescurrent or former directors, assets consultants, officers or rights (including any material Pivotal Intellectual Property Registrations) or any interest therein, except, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Out;
(f) adopt or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, other than Pivotal or any direct or indirect wholly owned Subsidiary of Pivotal;
(i) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto that in the aggregate are in excess of $1,000,000;
(j) except as required by any judgment by a court of competent jurisdiction, (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise)employees, other than (A) the payment, discharge or satisfaction in the ordinary course of business, (B) as required by their pursuant to applicable Law or the terms as of Contracts in effect on the date of this Agreement of claims, liabilities or obligations reflected or reserved against and set forth in the most recent audited financial statements (or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements in the ordinary course of business, (ii) cancel any material Indebtedness owed to Pivotal or any of its SubsidiariesCompany Disclosure Schedule, or (iiiB) waiveincreases in salaries, release, grant or transfer any right wages and benefits of material value;
(k) (i) materially modify, materially amend, terminate, cancel, waive any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (ii) enter into any Contract that if in effect on the date hereof would be a Material Contract, other than customer contracts entered into in the ordinary course of business;
(l) commence any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal or any of its Subsidiaries), or compromise, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements employees made in the ordinary course of business that involve only consistent with past practices;
(iv) (A) enter into or modify any employment, retention, change of control or severance agreement with, or (except as may be required by applicable Law) establish, adopt, enter into or modify any Company Plan, bonus, profit sharing, thrift, stock option, restricted stock, pension, retirement, welfare, deferred compensation, employment, retention, change of control, termination, severance or other benefit plan, agreement, policy or arrangement for the benefit of, any current or former director, officer or employee; (B) exercise any discretion to accelerate the vesting or payment of any compensation or benefit under any Company Plan; (C) grant any new awards under any Company Plan; (D) take any action to fund the payment of money damages not in excess of $500,000 individually compensation or $2,000,000 in the aggregate, benefits under any Company Plan; (E) adopt or amend in any case without respect any Company Plan, except as required by applicable Law; or (F) pay any transaction-related bonuses, severance or other similar amounts to employees of the imposition of any equitable relief onCompany, or its Subsidiaries, the admission of wrongdoing by, Pivotal Shareholders or any of its Subsidiariestheir respective Affiliates; except, in the case of clauses (A), (C), (D) and (E), in the ordinary course of business consistent with past practice, or as may be required by the terms of any such plan, agreement, policy or arrangement in effect on the date hereof;
(mv) change its make any material changes in financial or Tax tax accounting methods, principles or practicespractices (or change an annual accounting period), including revaluing any assets or writing off receivables or reserves, except insofar as may have been be required by a change in GAAP or applicable Law;
(nvi) except as otherwise contemplated herein, amend its certificate of incorporation, bylaws or analogous charter documents;
(vii) adopt a plan or agreement of complete or partial liquidation or dissolution or cause or permit Aeromobile Ltd. to adopt a plan or agreement of complete or partial liquidation or dissolution;
(viii) take or agree to commit to take, any action that could reasonably be expected to (A) impose any material delay in the obtaining of, or significantly increase the risk of not obtaining, any authorizations, consents, orders, declarations or approvals of any Governmental Authority necessary to consummate the Transactions or the expiration or termination of any applicable waiting period, (B) significantly increase the risk of any Governmental Authority entering an order or Restraint prohibiting or impeding the consummation of the Transactions or (C) otherwise materially delay the consummation of the Transactions (each, a “Delay”);
(ix) enter into any new material line of business;
(x) make any acquisition of or material investment in any other business or Person, by purchase or other acquisition of Equity Interests, by merger, consolidation, asset purchase or other business combination, or by formation of any joint venture or other business organization or by contributions to capital;
(xi) settle or compromise any Action (A) relating to this Agreement or the Transactions or (B) that is otherwise material liability for Taxes to the Company or surrender its Subsidiaries;
(xii) enter into any agreement in respect of Taxes, change or make any Tax elections (unless required by applicable Law), file any material claim for a refund of Taxes; file any amended Tax Return Return, settle or claim for Tax refund; make, revoke or modify compromise any material Tax election, liability or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liability; consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes;
(xiii) amend in any material respect or terminate any Material Contract, other than the entry into task, purchase or delivery orders under Government Contracts in the ordinary course of business consistent with past practices;
(xiv) enter into any (A) Material Contract (or any other Contract that reasonably likely would have been a Material Contract if entered into on January 1, 2006), other than supplier or customer Contracts (excluding fixed price customer Contracts with an aggregate contract value equal to or greater than $10,000,000) entered into in the ordinary course of business consistent with past practices or (B) other material amount Contract, other than Contracts entered into in the ordinary course of Taxes; grant business consistent with past practices;
(xv) make any power material capital expenditures other than in the ordinary course of attorney business consistent with past practice or in accordance with the Company’s current capital expenditure budget disclosed to the Purchaser prior to the date hereof;
(xvi) incur, create or become liable for any Indebtedness (A) of the type described in clauses (i), (ii), (v), (with respect to interest rate swap obligations) (vii), or (with respect to any of the foregoing) (viii) of the definition thereof, other than Credit Facility Indebtedness (and interest rate swap obligations in connection therewith under Contracts in effect on the date of this Agreement and set forth in the Company Disclosure Schedule); provided that Net Indebtedness as of the Closing Date shall not exceed $172,000,000; or (B) of any other type of material Taxes; Indebtedness other than in the ordinary course of business consistent with past practice;
(xvii) forgive or waive any material Indebtedness outstanding against a Third Party;
(xviii) make any material loans or advances to, or investments in, any Third Party;
(xix) pay any fees or expenses incurred or to be incurred by the Shareholders or the Company in connection with the Transactions;
(xx) enter into any Tax Sharing Agreement material transaction with any Third Party other than on arm’s length terms, to the extent the amount received or paid by the Company or any closing agreement of its Subsidiaries is less than or exceeds, respectively, the amount which would be received or paid if at arm’s-length, including, without limitation, the forgiveness of any material claims against Third Parties not on an arm’s-length basis;
(xxi) make any material gift or other material gratuitous payment out of the ordinary course of business;
(xxii) enter into any indemnity relating to the obligation of a Third Party, other than in the ordinary course of business, consistent with past practice;
(xxiii) enter into any Contract pursuant to which, in connection with a Third Party providing surety bonds, performance guarantees or any similar agreementobligations for the benefit of the Company or any of its Subsidiaries, such Third Party (A) is expressly entitled to be provided with any material assets of the Company or any of its Subsidiaries as collateral or (B) is entitled to provide or withhold its consent to a change of control of the Company or its Subsidiaries (or as a result of such a change of control, the Third Party would be entitled to termination or modify such Contract); or
(xxiv) agree to take any of the foregoing actions.
(c) The Purchaser agrees that, during the period from the date of this Agreement until the Closing Date, the Purchaser shall not, and shall not permit any of its Subsidiaries to, take, or change agree or commit to take, any method action that could reasonably be expected to result in a Delay. Without limiting the generality of accounting for Tax purposes;the foregoing, the Purchaser agrees that, during the period from the date of this Agreement until the Closing, the Purchaser shall not, and shall not permit any of its Subsidiaries to, acquire or agree to acquire by merging or consolidating with, or by purchasing a substantial portion of the assets of or equity in, or by any other manner, any Person or portion thereof, or otherwise acquire or agree to acquire any assets or rights, if the entering into of a definitive agreement relating to or the consummation of such acquisition, merger or consolidation would reasonably be expected to result in a Delay.
Appears in 2 contracts
Samples: Stock Purchase Agreement (American Airlines Inc), Stock Purchase Agreement (Amr Corp)
Conduct of Business. During (a) Except as otherwise expressly permitted or required by this Agreement or as set forth in the Business Line Modification Plan or as set forth in Section 7.1 of the Company Disclosure Schedule, during the period from commencing on the date hereof and ending on the earlier of this Agreement to the Effective Time, except as consented and the date on which this Agreement is terminated pursuant to in writing in advance by VMware or as otherwise expressly required or prohibited (including by Section 11.1, the restrictions set forth in subclauses (a) through (r) below) by this Agreement, Pivotal Company shall, and shall cause each of its Subsidiaries to, carry on its business in the ordinary course, including its development and sales efforts as currently contemplated, and use commercially reasonable efforts to :
(i) conduct its operations in the Ordinary Course of Business and, to the extent consistent therewith, to preserve intact its business organization, assets, rights organizations and properties, maintain satisfactory relationships with the Company’s customers and each other Person having material business relationships with the Company;
(ii) keep available the services pay all of its current officers, employees Liabilities and consultants and Taxes when due (subject to good faith dispute thereof); and
(iii) preserve its goodwill maintain the financial books, accounts, and its relationships records of the Company consistent with customersthe policies, suppliers, licensors, licensees, distributors practices and others having material business dealings with it. In addition to and without procedures as used in the preparation of the Company Financial Statements.
(b) Without limiting the generality of the foregoing, during the period from the date of this Agreement to the Effective Time, except (x) as set forth in section 5.1 of the Pivotal Disclosure Letter, (y) as specifically otherwise expressly permitted or required by this Agreement or (z) as specifically required by applicable Lawset forth in the Business Line Modification Plan or set forth in Section 7.1 of the Company Disclosure Schedule, Pivotal shall notduring the period referred to in Section 7.1(a), and the Company shall not effect, or permit any of its SubsidiariesSubsidiaries to effect, any of the following without VMware’s the prior written consent of Parent (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall not be unreasonably withheld, conditioned withheld or delayed, and in all other cases shall be in VMware’s sole discretion), to:):
(a) (i) declare, set aside make or pay permit to be made any dividends on, change in or make amendment to the Company Certificate or the Company By-laws or any other distributions (whether in cash, stock charter or property) in respect of, by-laws or comparable organizational documents of any of its capital stock or other equity interests, except for dividends by a wholly owned Subsidiary of Pivotal to Pivotal or any other wholly owned Subsidiary of Pivotal, Subsidiaries;
(ii) purchaseissue or sell, redeem or otherwise acquire authorize to issue or sell, any shares of Company Common Stock or any capital stock or other equity interests of Pivotal or its Subsidiaries or any other ownership interests, or issue or sell, or authorize to issue or sell, any securities convertible into or exchangeable for, or options, warrants, warrants or rights to acquire purchase or subscribe for, or enter into any such shares arrangement or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations Contract with respect to awards granted pursuant to the Pivotal Stock Plans and issuance or sale of, any shares of its or its Subsidiaries’ securities or any other ownership interests or amend or modify any of the foregoing outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or hereof;
(iii) split, combine, reclassify redeem or reclassify, purchase or otherwise amend the terms acquire any shares of any Company Common Stock or capital stock of its capital stock or other equity interests or issue or authorize the issuance of Subsidiaries;
(iv) enter into any other securities commitment in respect of, or take any other action in lieu furtherance of, any actual or proposed direct or indirect merger, consolidation, stock purchase, tender offer, exchange offer, issuance, sale, distribution, other disposition, recapitalization, restructuring, spin-off or any similar transaction of or in substitution for shares involving the Company or any of its capital stock Subsidiaries (whether as merger partner, purchaser or other equity interests;
(bseller) issue, deliver, sell, grant, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) any shares of its capital stock or other equity interests or any of the securities (or options, rights or warrants to purchase, or securities convertible into, exchangeable for or exercisable for any such shares or other equity interests, or any rights, warrants or options to acquire, any such shares or other equity interests, or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive shares of capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof (other than the issuance of Class A Shares upon the exercise of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPP, in each case, that are outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with their terms as in effect on such date);
(csecurities) amend or otherwise change, or authorize or propose to amend or otherwise change, its certificate of incorporation or bylaws (or similar organizational documents);
(d) directly or indirectly acquire or agree to acquire (i) by merging or consolidating with, purchasing a substantial equity interest in or a substantial portion of the assets of, making an investment in or loan or capital contribution to or in any other manner, any corporation, partnership, association or other business organization or division thereof or (ii) any assets that are otherwise material to Pivotal and its Subsidiaries, except, in each case, for (1) capital expenditures which shall be subject to the limitations of clause (i) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes in the ordinary course of business consistent with Pivotal’s investment management policy, and except in the case of clause (ii), acquisitions of inventory, products or services in the ordinary course of business; Table of Contents
(e) directly or indirectly sell, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien or otherwise dispose in whole or in part of any of its material properties, assets or rights (including any material Pivotal Intellectual Property Registrations) or any interest therein, except, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Out;
(f) adopt or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, other than Pivotal or any direct or indirect wholly owned Subsidiary of Pivotal;
(i) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto that in the aggregate are in excess of $1,000,000;
(j) except as required by any judgment by a court of competent jurisdiction, (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge or satisfaction in the ordinary course of business, (B) as required by their terms as in effect on the date of this Agreement of claims, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements in the ordinary course of business, (ii) cancel any material Indebtedness owed to Pivotal Company or any of its Subsidiaries, or (iii) waiveany transaction that is similar in form, release, grant substance or transfer purpose to any right of material valuethe foregoing transactions;
(kv) enter into any new line of business or change its risk and asset liability management and other material operating policies, except as required by applicable Law;
(ivi) materially modifymake any investment in, materially acquisition of capital stock or assets of, or capital contributions to, any Person (other than between itself and any of its direct and indirect wholly-owned Subsidiaries) or pursuant to any existing Contract identified in Section 7.1(b)(vi) of the Company Disclosure Schedule or any Lease Agreement or Loan Agreement;
(vii) other than assets that relate to Company Intellectual Property, which shall be subject to Section 7.1(b)(xviii) below, except in the Ordinary Course of Business (A) mortgage, pledge or subject to any Lien any of its or its Subsidiaries’ properties or assets, (B) acquire any assets or (C) sell, assign, transfer, convey, lease, distribute or otherwise dispose of any assets of the Company or any of its Subsidiaries, except for such dispositions in connection with (1) any obsolete, expired, damaged or worn out properties or assets or (2) any Loan Agreements or Lease Agreements, provided that (x) the consideration received for any assets sold or disposed of in connection with any such Loan Agreements or Lease Agreement shall be in an amount at least equal to the fair market value thereof (determined in good faith by the management of the Company) and (y) no less than one hundred percent (100%) of the consideration received therefore shall be paid in cash);
(viii) declare or pay any dividend or distribution, except as provided under Section 7.2;
(ix) enter into, amend, terminate, cancelassign, waive any material right under transfer or extend (x) any Company Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course Ordinary Course of business) Business or (iiy) any Contract that would require consent in connection with this Agreement, the Merger or any other transaction contemplated hereby or any other Contract imposing a material restriction on the Company or its Affiliates;
(x) incur or become contingently liable with respect to any Indebtedness; or make any loan or advance to any other Person, other than advances of business expenses to employees or in the Ordinary Course of Business;
(xi) enter into any Contract that if commitment or transaction (including any borrowing, capital expenditure or purchase, sale or Lease of assets) requiring a capital expenditure, or make any capital expenditures, capital additions or capital improvements or any other capital expenditure in effect on the date hereof would be a Material Contract, other than customer contracts entered into in the ordinary course excess of businesstwo hundred thousand dollars ($200,000);
(lxii) commence accept any Legal Proceeding capital contribution or otherwise increase the Company’s capital, except as set forth in Section 7.3, Section V.3(c) of Schedule V or for the purposes of the Initial Investment;
(xiii) settle or compromise any Action (whether or not commenced prior to the date of this Agreement) other than settlements or compromises thereof providing solely for monetary relief (not including any settlement or compromise related to Taxes) where the amount paid in settlement or compromise does not exceed five hundred thousand dollars ($500,000), individually or in the aggregate, for all such Actions, and does not involve any other obligation of the Company or any of its Subsidiaries other than a Legal Proceeding customary release with respect to such Action;
(xiv) engage in, enter into, amend or extend any Related Party Transaction, except as a result set forth in Section 7.5;
(xv) hire any employee, unless (x) the purpose of a Legal Proceeding commenced against Pivotal the hiring is to fill any position vacated after the date the hereof and such vacated position is not contemplated by the Business Line Modification Plan and (y) such employee’s aggregate annual base compensation does not exceed one hundred thousand ($100,000) or such employee is employed on an “at will” basis;
(xvi) grant or agree to grant to any current or former employee or officer of the Company or any of its Subsidiaries any increase in wages or bonus, severance, profit sharing, retirement, deferred compensation, insurance or other compensation or benefits, establish any new compensation or benefit plans, agreements or arrangements or amend, terminate or extend any existing employee benefit plan or any Contract between the Company (or any of its Subsidiaries), or compromiseany representative(s) of such employee(s), settle on the one hand, and any employee of the Company, on the other hand, except (i) as required under applicable Law, or (ii) as may be required under the provisions of any Company Benefit Plan or Company Employment Agreements existing on the date hereof;
(xvii) except as set forth in Section 9.11, establish or agree to settle establish any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements performance goals or agreements targets in the ordinary course of business that involve only the payment of money damages not in excess of $500,000 individually or $2,000,000 in the aggregate, in any case without the imposition respect of any equitable relief on, annual bonus opportunities for fiscal year 2010 or the admission of wrongdoing by, Pivotal or thereafter for any of its SubsidiariesCompany Employee;
(mxviii) change (A) dispose of or permit to lapse any rights to, any Material Company Intellectual Property, provided that neither the expiration of a patent on its financial scheduled expiration date nor the abandonment of an application for registration of a Trademark in connection with a third party opposition proceeding shall be deemed a breach of the foregoing, or Tax accounting methods(B) except in the Ordinary Course of Business, principles or practices, except insofar as may have been required by a change in GAAP or applicable Lawgrant to unaffiliated third parties any rights to any Material Company Intellectual Property;
(nxix) settle adopt a plan of complete or compromise partial liquidation or dissolution; or
(xx) authorize any material liability for Taxes or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax electionof, or change commit or agree to take any of, the entity classification foregoing actions.
(c) Notwithstanding anything to the contrary contained herein, subject to applicable Law, it is understood and agreed by the parties that, prior to the Closing, the Company will use commercially reasonable efforts to implement the Business Line Modification Plan to the extent related to periods prior to the Effective Time, as the same may be modified from time to time by mutual written agreement of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in Parent and the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liability; consent Company pursuant to any extension or waiver of the limitation period applicable to any claim or assessment in respect of a material amount of Taxes; grant any power of attorney with respect to material Taxes; enter into any Tax Sharing Agreement or any closing agreement or other similar agreement; or change any method of accounting for Tax purposes;Section 9.7.
Appears in 2 contracts
Samples: Acquisition Agreement (EverBank Financial Corp), Acquisition Agreement (EverBank Financial Corp)
Conduct of Business. During the period from From the date of this Agreement to until the Effective Timeearlier of the Closing or the termination of this Agreement in accordance with its terms (the “Interim Period”), the Company shall, and shall cause its Subsidiaries to, except as expressly contemplated by this Agreement (including the Recapitalization) or any other Transaction Agreement, as set forth on Schedule 6.01, as consented to in writing in advance by VMware SPAC (which consent shall not be unreasonably conditioned, withheld or delayed), or as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) by this Agreementapplicable Law, Pivotal shall, conduct and shall cause each of its Subsidiaries to, carry on operate its business in the ordinary course, including its development and sales efforts as currently contemplated, and use commercially reasonable efforts to (i) preserve intact its course of business organization, assets, rights and properties, (ii) keep available the services of its current officers, employees and consultants and (iii) preserve its goodwill and its relationships with customers, suppliers, licensors, licensees, distributors and others having in all material business dealings with itrespects. In addition to and without Without limiting the generality of the foregoing, during the period from the date of except as contemplated by this Agreement to (including the Effective TimeRecapitalization) or in any other Transaction Agreement, except (x) as set forth on Schedule 6.01, as consented to by SPAC in section 5.1 of the Pivotal Disclosure Letterwriting (such consent not to be unreasonably conditioned, (y) withheld or delayed), or as specifically required by this Agreement or (z) as specifically required by applicable Law, Pivotal the Company shall not, and the Company shall cause its Subsidiaries not permit any of its Subsidiariesto, without VMware’s prior written consent (which consent, in during the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), toInterim Period:
(a) change or amend its Organizational Documents;
(ib) make, declare, set aside aside, establish a record date for or pay any dividend or distribution, other than any dividends on, or make distributions from any other distributions (whether in cash, stock or property) in respect of, any of its capital stock or other equity interests, except for dividends by a wholly owned Subsidiary of Pivotal the Company either to Pivotal the Company or any other wholly owned Subsidiary Subsidiaries of Pivotalthe Company;
(c) except for entries, (ii) purchasemodifications, redeem amendments, waivers or otherwise acquire shares terminations in the ordinary course of capital stock business, enter into, materially modify, materially amend, waive any material right under or other equity interests of Pivotal or its Subsidiaries terminate, any Specified Contract, or any options, warrants, or rights to acquire any such shares or other equity interests, Lease;
(d) other than (A) in connection with the withholding exercise of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and options outstanding on as of the date of this Agreement or otherwise granted as permitted by this Agreement, in accordance with their the terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii) split, combine, reclassify or otherwise amend the terms of any of its capital stock or other equity 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 other equity interests;
(bi) issue, deliver, sell, granttransfer, pledge or otherwise encumber dispose of, or subject to place any Lien (other than transfer restrictions a Permitted Lien) on, any Equity Securities of general applicability as may be provided under the Securities Act Company or other applicable securities Laws) any shares of its capital stock or other equity interests or any securities convertible into, exchangeable for or exercisable for any such shares or other equity interests, or any rights, warrants or options to acquire, any such shares or other equity interests, or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive shares of capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof (other than the issuance of Class A Shares upon the exercise of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPP, in each case, that are outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with their terms as in effect on such date);
(c) amend or otherwise change, or authorize or propose to amend or otherwise change, its certificate of incorporation or bylaws (or similar organizational documents);
(d) directly or indirectly acquire or agree to acquire (i) by merging or consolidating with, purchasing a substantial equity interest in or a substantial portion of the assets of, making an investment in or loan or capital contribution to or in any other manner, any corporation, partnership, association or other business organization or division thereof Subsidiaries or (ii) issue or grant any options, warrants or other rights to purchase or obtain any Equity Securities of the Company or any of its Subsidiaries;
(e) sell, assign, transfer, convey, lease, license, abandon, allow to lapse or expire, subject to or grant any material Lien (other than Permitted Liens) on, or otherwise dispose of, any material assets, rights or properties (including material Intellectual Property), other than (i) the sale or license of goods and services to customers in the ordinary course of business, (ii) the sale or other disposition of assets that are or equipment deemed by the Company in its reasonable business judgment to be obsolete or otherwise material to Pivotal and warranted in the ordinary course of business, (iii) grants of non-exclusive licenses of Intellectual Property in the ordinary course of business, (iv) as already contracted by the Company or any of its Subsidiaries, except, in each case, for or (1v) capital expenditures which shall be subject to transactions among the limitations of clause (i) below Company and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes or among its Subsidiaries;
(f) settle any pending or threatened Action if such settlement would require payment by the Company in an amount greater than $10,000,000 or admit criminal wrongdoing;
(g) except in the ordinary course of business consistent with Pivotal’s investment management policypast practices, and or as otherwise required by the terms of any existing Company Benefit Plan or existing employment Contract as in effect on the date hereof or as otherwise required under applicable Law, (i) pay or promise to pay, fund any new, enter into or make any grant of any severance, change in control, retention or termination payment to any Company Employee, (ii) take any action to accelerate any material payments or benefits, or the funding of any material payments or benefits, payable or to become payable to any officer level Company Employees, (iii) take any action to materially increase any compensation or material benefits of any Company Employee, except for bonuses, base salary increases or in connection with any promotions or (iv) establish, adopt, enter into, amend or terminate any material Company Benefit Plan or any Contract that would be a material Company Benefit Plan if it were in existence as of the date of this Agreement;
(h) negotiate, modify, extend, or enter into any CBA or recognize or certify any labor union, labor organization, works council, or group of employees as the bargaining representative for any employees of the Company or its Subsidiaries;
(i) make any loans or advance any money or other property to any Person, except for (A) advances in the case ordinary course of clause business to employees, officers or directors of the Company or any of its Subsidiaries for expenses, (ii), acquisitions B) prepayments and deposits paid to suppliers of inventory, products the Company or services any of its Subsidiaries in the ordinary course of business; Table , (C) trade credit extended to customers of Contents
(e) directly the Company or indirectly sell, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien or otherwise dispose in whole or in part of any of its material propertiesSubsidiaries in the ordinary course of business and (D) advances or other payments among the Company and its Subsidiaries;
(j) redeem, assets purchase, repurchase or rights otherwise acquire, or offer to redeem, purchase, repurchase or acquire, any Equity Securities of the Company any of its Subsidiaries other than (including x) transactions among the Company and its Subsidiaries or among the Subsidiaries of the Company, or (y) in connection with the termination of employees of the Company or any of its Subsidiaries under the Company’s existing option plans;
(k) adjust, split, combine, subdivide, recapitalize, reclassify or otherwise effect any change in respect of any Equity Securities of the Company or any of its Subsidiaries;
(l) make any material Pivotal Intellectual Property Registrations) change in accounting principles, estimation techniques and assumptions or any interest thereinmethods of financial accounting materially affecting the reported consolidated assets, except, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, liabilities or encumbrances required to be effected prior to results of operations of the Effective Time pursuant to existing Contracts that are not material to Pivotal Company and its Subsidiaries, taken other than as a whole and (ii) Ordinary Course Licenses Outmay be required by GAAP or applicable Law;
(fm) adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganizationreorganization of the Company or its Subsidiaries;
(gn) fail make, change or revoke any material Tax election in a manner inconsistent with past practice, change or revoke any material accounting method with respect to maintainTaxes, file any material Tax Return in a manner materially inconsistent with past practice, settle or compromise any material Tax claim or Tax liability, enter into any material closing agreement with respect to any Tax, or allow surrender any right to lapseclaim a material refund of Taxes, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrationschange its jurisdiction of tax residency;
(ho) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, other than Pivotal or any direct or indirect wholly owned Subsidiary of Pivotal;
(i) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto that in the aggregate are in excess of $1,000,000;
(j) except as required by any judgment by a court of competent jurisdiction, (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge or satisfaction in the ordinary course of business, incur, create, assume or guarantee any indebtedness for borrowed money in excess of $10,000,000, other than (Bx) ordinary course trade payables, (y) between the Company and any of its wholly owned Subsidiaries or between any of such wholly owned Subsidiaries or (z) in connection with borrowings, extensions of credit and other financial accommodations under the Company’s and Subsidiaries’ existing credit facilities, notes and other existing indebtedness as required by their terms as in effect on of the date of this Agreement of claimsand, liabilities or obligations reflected or reserved against in the most recent audited financial statements each case, any refinancings thereof;
(or the notes theretop) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements other than in the ordinary course of business, (ii) cancel any material Indebtedness owed to Pivotal or any of its Subsidiaries, or (iii) waive, release, grant or transfer any right of material value;
(k) (i) materially modify, materially amend, terminate, cancel, waive any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (ii) enter into any Contract agreement that if materially restricts the ability of the Company or its Subsidiaries to engage or compete in effect on any line of business, enter into any agreement that materially restricts the date hereof would be ability of the Company or its Subsidiaries to enter into a Material Contract, other than customer contracts entered new line of business or enter into in the ordinary course any new line of business;
(li) commence make any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal or any of its Subsidiaries), or compromise, settle or agree to settle any Legal Proceedingcapital expenditures that in the aggregate exceed $10,000,000, other than Transaction Litigation any capital expenditure (or series of related capital expenditures) consistent in all material respects with, or (ii) delay the making of any material capital expenditures as provided in, the Company’s annual capital expenditures budget for periods following the date hereof, made available to SPAC;
(r) accelerate or delay any annual or other bonuses ahead of the date on which is subject to section 5.7), compromises, settlements or agreements such bonuses would have been paid in the ordinary course of business that involve only the payment of money damages not in excess of $500,000 individually or $2,000,000 in the aggregate, in any case without the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal or any of its Subsidiariesfor fiscal year 2021;
(ms) change its financial or Tax accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law;
(n) settle or compromise any material liability for Taxes or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis consistent with past practice that would materially practices, (i) make any changes which are material to the Company and adversely affect its Tax liability; consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Subsidiaries (taken as a material amount of Taxes; grant any power of attorney whole) with respect to their policies or practices concerning (A) collection of accounts receivable, or (B) payment of accounts payable; or (ii) make any changes which are material Taxes; to the Company and its Subsidiaries (taken as a whole) in its cash management customs and practices (including customs and practices relating to the timing of collection of receivables, the timing of payment of payables and any other movement of cash, cash equivalents or marketable securities);
(t) enter into any Tax Sharing Contract with any broker, finder, investment banker or other Person under which such Person is or will be entitled to any brokerage fee, finders’ fee or other commission in connection with the Transactions;
(u) directly or indirectly acquire by merging or consolidating with, or by purchasing a substantial portion of the assets of, or by purchasing all of or a substantial equity interest in, or by any other manner, any business or any corporation, partnership, limited liability company, joint venture, association or other entity or Person or division thereof; or
(v) enter into any Contract to do any action prohibited under Section 6.01 above. Notwithstanding anything to the contrary contained herein (including this Section 6.01), (x) nothing herein shall prevent the Company or any of its Subsidiaries from taking any COVID-19 Measures or any action that is taken in good faith in response to COVID-19, and no such action (or failure to act) shall serve as a basis for SPAC to terminate this Agreement or assert that any closing agreement of the conditions to the Closing contained herein have not been satisfied and (y) nothing in this Section 6.01 is intended to give SPAC or other similar agreement; any of its Affiliates, directly or change any method indirectly, the right to control or direct the business or operations of accounting for Tax purposes;the Company or its Subsidiaries prior to the Closing, and prior to the Closing, the Company and its Subsidiaries shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over their respective businesses and operations.
Appears in 2 contracts
Samples: Merger Agreement (ironSource LTD), Merger Agreement (Thoma Bravo Advantage)
Conduct of Business. During Sellers will cause the period from Company and the date of this Agreement Subsidiaries to the Effective Time, except as consented to in writing in advance by VMware or as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) by this Agreement, Pivotal shall, and shall cause each of its Subsidiaries to, carry on its conduct business only in the ordinary course. Without limiting the generality of the foregoing, including its development at all times prior to Closing, Sellers will cause the Company and sales efforts as currently contemplated, and use commercially the Subsidiaries to:
(a) Use their reasonable best efforts to (i) preserve intact its the present business organization, assets, rights organization and propertiesreputation of the Company and the Subsidiaries, (ii) keep available (subject to dismissals for cause and retirements in the ordinary course of business) the services of its current officersthe officers and employees of the Company and the Subsidiaries, employees and consultants and (iii) preserve its goodwill maintain the Assets and its relationships with Properties of the Company and the Subsidiaries in good working order and condition, ordinary wear and tear excepted, and (iv) maintain the good will of key customers, suppliers, licensors, licensees, distributors suppliers and others having material lenders and other Persons with whom the Company or any Subsidiary otherwise has significant business dealings with it. In addition to and without limiting the generality of the foregoing, during the period from the date of this Agreement to the Effective Time, except relationships; and
(xb) as set forth in section 5.1 of the Pivotal Disclosure Letter, (y) as specifically required by this Agreement or (z) as specifically required by applicable Law, Pivotal shall not, and shall not permit any of its SubsidiariesNot, without VMware’s the prior written consent of Purchaser (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall not to be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), to:):
(ai) amend the LLC Agreement or any other organizational document of the Company or any Subsidiary;
(ii) (iA) declare, set aside or pay any dividends ondividend (whether in cash, equity interests or property), or make any other distributions distribution (whether in cash, stock equity interests or property) ), in respect of, any of its capital stock or other equity interests, except for dividends by a wholly owned Subsidiary of Pivotal to Pivotal or any other wholly owned Subsidiary of Pivotal, (ii) purchase, redeem or otherwise acquire shares of capital stock or other the outstanding equity interests of Pivotal or its Subsidiaries the Company or any options, warrants, or rights to acquire any such shares or other equity interestsSubsidiary, other than (Ax) any distributions of Excluded Assets and (y) any distributions of cash in excess of the withholding working capital requirements of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans Company and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and its Subsidiaries; (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii) split, combine, combine or reclassify or otherwise amend the terms of any of its capital stock or other the outstanding equity interests of the Company or any Subsidiary or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares the outstanding equity interests of its capital stock the Company or other any Subsidiary; (C) purchase, redeem or otherwise acquire any equity interests of the Company or any Subsidiary or any rights, warrants or options to acquire any such equity interests;
; or (bD) issue, deliver, sell, grant, pledge sell or otherwise encumber or subject to grant any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) any shares of its capital stock or other equity interests in the Company or any Subsidiary or any securities convertible into, exchangeable for or exercisable for any such shares or other equity interests, or any rights, warrants or options to acquire, any such shares equity interests or other equity interests, or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive shares of capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof (other than the issuance of Class A Shares upon the exercise of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPP, in each case, that are outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with their terms as in effect on such date)convertible securities;
(ciii) amend or otherwise change, or authorize or propose to amend or otherwise change, its certificate of incorporation or bylaws (or similar organizational documents);
(dA) directly or indirectly acquire or agree to acquire (iby merger, consolidation, acquisition of stock or assets or otherwise) by merging or consolidating with, purchasing a substantial equity interest in or a substantial portion of the assets of, making an investment in or loan or capital contribution to or in any other manner, any corporation, partnership, association partnership or other business organization or division thereof assets comprising a business or any substantial amount of property or assets in or of any other Person or (iiB) dispose, transfer or lease any assets that are otherwise material to Pivotal and its Subsidiariesproperty or assets, except, in each case, except for (1x) capital expenditures which shall be subject to the limitations of clause (i) below and (2) purchases of marketable securities by acquisitions or on behalf of Pivotal or its Subsidiaries for cash management purposes dispositions effected in the ordinary course of business consistent with Pivotal’s investment management policy, past practice and except in the case (y) transfers of clause Excluded Assets;
(ii), acquisitions of inventory, products iv) incur (A) any material Liabilities or services (B) any non-material Liabilities not in the ordinary course of business; Table of Contents
(e) directly or indirectly sell, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien or otherwise dispose in whole or in part of any of its material properties, assets or rights (including any material Pivotal Intellectual Property Registrations) or any interest therein, except, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Outbusiness consistent with past practice;
(fv) adopt make any material change in its Tax accounting or enter into financial accounting principles that could have an impact on the business of the Company and/or the Subsidiaries following the Closing, except insofar as may be required by a plan of complete change in applicable Law or partial liquidation, dissolution, restructuring, recapitalization or other reorganizationGAAP;
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (iivi) make any loans, advances or capital contributions to, or investments in, any other PersonTax election that could have an impact on the business of the Company and/or the Subsidiaries following the Closing, other than Pivotal or any direct or indirect wholly owned Subsidiary of Pivotal;
(i) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto that in the aggregate are in excess of $1,000,000;
(j) except as required by any judgment by a court of competent jurisdiction, (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge or satisfaction in the ordinary course of business, (B) as required by their terms as in effect on the date of this Agreement of claims, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements in the ordinary course of business, (ii) cancel any material Indebtedness owed to Pivotal or any of its Subsidiaries, or (iii) waive, release, grant or transfer any right of material value;
(k) (i) materially modify, materially amend, terminate, cancel, waive any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (ii) enter into any Contract that if in effect on the date hereof would be a Material Contract, other than customer contracts entered into in the ordinary course of business;
(lvii) commence mortgage, pledge or otherwise encumber any Legal Proceeding material assets of the Company and any of its Subsidiaries, except for Permitted Liens incurred in the ordinary course of business;
(other than viii) make any capital expenditures, capital additions or capital improvements in excess of One Hundred Thousand Dollars ($100,000) individually or in excess of Five Hundred Thousand Dollars ($500,000) in the aggregate;
(ix) enter into any Contract understanding or commitment (A) that would have been a Legal Proceeding as a result Material Contract if entered into prior to the date hereof, or violate, amend or otherwise modify or waive any of a Legal Proceeding commenced against Pivotal the material terms of any Material Contracts or (B) that restrains, restricts or limits the ability of the Company or any of its Subsidiaries)Subsidiaries to compete with or conduct any business or line of business in any geographic area or solicit the employment of any persons;
(x) enter into any Contract understanding or commitment that restrains, restricts or limits the ability of the Company or any of its Subsidiaries to compete with or conduct any business or line of business in any geographic area or solicit the employment of any persons;
(xi) grant to or acquire from any Person, or dispose of or permit to lapse any rights to, any material items of Company Owned Intellectual Property (other than Excluded Assets constituting Intellectual Property) or disclose to any Person, other than representatives of Purchaser, any material trade secret;
(xii) settle, compromise, settle discharge or agree to settle any Legal Proceedinglitigation, investigation, arbitration or proceeding other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements in the ordinary course of business those that (A) do not involve only the payment by the Company or any of money its Subsidiaries of monetary damages not of Five Hundred Thousand Dollars ($500,000) individually or in excess of One Million Dollars ($500,000 individually or $2,000,000 1,000,000) in the aggregate, in plus applicable reserves and any case without applicable insurance coverage, and do not involve any material injunctive or other non-monetary relief or impose material restrictions on the imposition business or operations of the Company or its Subsidiaries, and (B) provide for a complete release of the Company and its Subsidiaries from all claims and do not provide for any equitable relief on, or the admission of wrongdoing by, Pivotal liability by the Company or any of its Subsidiaries;
(mxiii) change (A) recognize any new labor union, labor organization or similar employee representative; (B) negotiate, enter into, amend, modify or terminate any collective bargaining agreement or any other Contract with any labor union, labor organization, or similar employee representative; (C) waive, release, limit, or condition any Restrictive Covenant obligation of any current or former employee or contractor of the Company or any of its financial Subsidiaries; or Tax accounting methods, principles or practices, (D) except insofar as may have been required by the terms of any Benefit Plan as of the date of this Agreement or as expressly contemplated by this Agreement, (i) amend any Benefit Plan to increase benefits thereunder or take any action to accelerate the vesting or payment of any benefits under a change Benefit Plan or (ii) establish or adopt any new plan, agreement or arrangement that would be a Benefit Plan if in GAAP or applicable Law;effect on the date of this Agreement; or
(nxiv) settle or compromise any material liability for Taxes or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liability; consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of a material amount of Taxes; grant any power of attorney with respect to material Taxes; enter into any Tax Sharing Agreement Contract, agreement, commitment or arrangement to do any closing agreement or other similar agreement; or change any method of accounting for Tax purposes;the foregoing.
Appears in 2 contracts
Samples: Membership Interest Purchase Agreement (Red Rock Resorts, Inc.), Membership Interest Purchase Agreement (Station Casinos LLC)
Conduct of Business. During Except as expressly set forth in this Agreement or with the prior written consent of Parent (which consent may be withheld by Parent in its sole discretion, but such determination to grant or withhold a consent shall be promptly made and communicated to the Company) during the period from the date hereof to the Effective Time or until the earlier termination of this Agreement pursuant to its terms, the Effective Time, except as consented to in writing in advance by VMware or as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) by this Agreement, Pivotal shall, and Company shall cause each of its Subsidiaries to, carry on its business in the usual, regular and ordinary coursecourse consistent with the manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations and, including its development and sales efforts as currently contemplatedto the extent consistent therewith, and use all commercially reasonable efforts to (i) preserve intact its current business organization, assets, rights and properties, (ii) keep available the services of its current officers, officers and employees and consultants and (iii) preserve its goodwill and its relationships with customers, suppliers, licensors, licensees, distributors suppliers and others having material business dealings with it. In addition to and without Without limiting the generality of the foregoing, during and except as expressly set forth in this Agreement or with the period from prior written consent of Parent (which consent may be withheld by Parent in its sole discretion, but such determination to grant or withhold a consent shall be promptly made and communicated to the Company), between the date hereof and the Effective Time or until the earlier termination of this Agreement pursuant to its terms, the Effective TimeCompany shall not, except (x) as set forth in section 5.1 of the Pivotal Disclosure Letter, (y) as specifically required by this Agreement or (z) as specifically required by applicable Law, Pivotal shall not, and shall not permit any of its Subsidiaries, without VMware’s prior written consent (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), toon Schedule 4.1:
(a) (i1) declare, set aside or pay (whether in cash, stock, property or otherwise) any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock or other equity interests, except for dividends by a wholly owned Subsidiary of Pivotal to Pivotal or any other wholly owned Subsidiary of Pivotalstock, (ii) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii2) split, combine, combine or reclassify or otherwise amend the terms of any of its capital stock or other equity 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 (3) purchase, redeem or otherwise acquire any shares of capital stock of the Company or any other equity interestssecurities thereof or any rights, warrants or options to acquire any such shares or other securities, except for repurchases of unvested shares at cost in connection with the termination of the employment or consulting relationship with any employee or consultant pursuant to stock option or purchase agreements (to the extent true and correct copies of such stock option or purchase agreements have been provided to Parent prior to the date hereof);
(b) other than the issuance of Company Common Stock upon the exercise of Stock Options outstanding on the date hereof in accordance with their present terms, (1) issue, deliver, sell, grantaward, pledge pledge, dispose of or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under authorize or propose the Securities Act issuance, delivery, grant, sale, award, pledge or other applicable securities Lawsencumbrance (including limitations in voting rights) or authorization of, any shares of its capital stock or stock, any other equity interests voting securities or any securities convertible into, exchangeable for or exercisable for any such shares or other equity interests, or any rights, warrants or options to acquire, any such shares shares, voting securities or other equity interestsconvertible securities, (2) amend, waive or otherwise modify the terms of any stock appreciation such rights, “phantom” stock rights, performance units, rights to receive shares warrants or options (except as expressly contemplated by this Agreement) or (3) accelerate the vesting of capital stock any of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts Stock Options (except as in effect on the date hereof (other than the issuance of Class A Shares upon the exercise of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPP, in each case, that are outstanding on the date of contemplated by this Agreement and Made Available to VMware and otherwise in accordance with their terms as in effect on such dateAgreement);
(c) amend its articles of incorporation, bylaws or otherwise change, other comparable charter or authorize or propose to amend or otherwise change, its certificate of incorporation or bylaws (or similar organizational documents);
(d) directly or indirectly acquire or agree to acquire (ifor cash or shares of stock or otherwise) (A) by merging or consolidating with, or by purchasing a substantial equity interest in or a substantial portion of the assets of, making an investment in or loan or capital contribution to or in by any other manner, any business or any corporation, partnership, limited liability company, joint venture, association or other business organization or division thereof or (iiB) any assets that are otherwise material to Pivotal and its Subsidiaries, except, with a fair market value in each case, for (1) capital expenditures which shall be subject to the limitations excess of clause (i) below and (2) $50,000 except purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes fixtures, furniture, supplies and equipment in the ordinary course of business consistent with Pivotal’s investment management policy, and except in the case of clause (ii), acquisitions of inventory, products or services in the ordinary course of business; Table of Contentspast practice;
(e) directly commence or indirectly sell, lease, license, sell and leaseback, abandon, allow undertake or agree to lapse, commence the operation or development of a casino or other gaming operations of any nature (excluding the existing gaming operations of the Company);
(f) mortgage or otherwise encumber or subject to any Lien Lien, or sell, lease, license, exchange or otherwise dispose in whole or in part of any of, its properties or assets, except for sales and licenses of its material properties, properties or assets or rights (including any material Pivotal Intellectual Property Registrations) or any interest therein, except, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Out;
(f) adopt or enter into a plan ordinary course of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganizationbusiness consistent with past practice;
(g) fail (1) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, issue or sell any debt securities or warrants or other rights to maintainacquire any debt securities of the Company, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (ii2) make any loans, advances or capital contributions to, or investments in, any other Person, other than Pivotal loans or advances to employees of the Company for travel or business expenses in the ordinary course of business;
(h) authorize any direct capital commitment or indirect wholly owned Subsidiary capital lease which is in excess of Pivotal$50,000 or capital expenditures which are, in the aggregate, in excess of $100,000;
(i) incur make, amend or commit rescind any express or deemed election relating to incur material taxes, make a request for a tax ruling or enter into a closing agreement, file any capital expenditure amendments to any previously filed Tax Returns, surrender any right to claim an amount of refund of any Taxes, settle or authorization compromise any claim, action, suit, litigation, proceeding, arbitration, investigation, audit or commitment with respect thereto that controversy relating to material taxes, or change any of its methods of reporting income or deductions for federal income tax purposes from those employed in the aggregate are in excess preparation of $1,000,000its federal income tax return for the taxable year ending June 30, 2005, except as may be required by applicable law;
(j) except as required by settle or compromise any judgment by a court pending or threatened suit, action, claim (other than claims related to accounts receivable of competent jurisdiction, the Company which were fully reserved against in the most recent consolidated financial statements of the Company included in the Company SEC Documents) or initiate any litigation against any third party;
(ik) pay, discharge, settle discharge or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge discharge, settlement or satisfaction satisfaction, in the ordinary course of businessbusiness consistent with past practice or in accordance with their terms, (B) as required by their terms as in effect on the date of this Agreement of claims, liabilities or obligations reflected or reserved against in in, or contemplated by, the most recent audited consolidated financial statements (or the notes thereto) of Pivotal the Company included in the Pivotal Company SEC Documents or incurred in the ordinary course of business consistent with past practice;
(1) increase the rate of compensation payable or to become payable generally to any of the Company’s directors, officers or employees other than usual and customary increases in the ordinary course of business consistent with past practice or as required under employment agreements or salary or wage policies set forth in Section 3.1(g) of the Company Disclosure Schedule, (2) pay or agree to pay any pension, retirement allowance, severance, continuation or termination benefit or other material employee benefit, except as required under a Pension Plan, Benefit Plan or employment agreement in effect as of the date of the most recent audited financial statements included in the Company SEC Documents filed prior to the date hereof and publicly available or as otherwise provided to Parent in writing prior to the date hereof, (for amounts 3) establish, adopt or commit itself to any additional pension, profit sharing, bonus (excluding retention bonuses not in excess of such reserves) or (C) incurred since the date of such financial statements $135,000 in the ordinary course of businessaggregate), incentive, change in control, deferred compensation, stock purchase, stock option, stock appreciation right, group insurance, severance pay, continuation pay, termination pay, retirement or other material employee benefit plan, agreement or arrangement, or amend or modify or increase the benefits under or take any action to accelerate the rights or benefits under any collective bargaining agreement or any employee benefit plan, agreement or arrangement, including the Stock Option Plans or other Benefit Plans, except to the extent necessary to comply with applicable law or as contemplated by this Agreement, (ii) cancel any material Indebtedness owed to Pivotal or any of its Subsidiaries, or (iii) waive, release, grant or transfer any right of material value;
(k) (i) materially modify, materially amend, terminate, cancel, waive any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (ii4) enter into any Contract that if severance, change in effect on control, or employment agreement with or for the date hereof would be a Material Contractbenefit of any Person (except as contemplated by this Agreement), other than customer contracts entered into in or (5) increase the ordinary course rate of businesscompensation under or otherwise change the terms of any existing employment agreement (except as contemplated by this Agreement);
(lm) commence any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal or any of its Subsidiaries), or compromise, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements except in the ordinary course of business that involve only consistent with past practice or to the payment of money damages not in excess of $500,000 individually extent necessary to comply with applicable law, enter into, modify, or $2,000,000 in the aggregate, amend in any case without the imposition of any equitable relief onmaterial respect, or renew, fail to renew or terminate, any material contract or agreement to which the admission of wrongdoing byCompany is a party (including without limitation any Company Benefit Plan) or waive, Pivotal release or assign any of its Subsidiaries;
(m) change its financial material rights or Tax accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Lawclaims;
(n) settle or compromise change fiscal years;
(o) take any action to change in any material liability for Taxes respect its accounting policies or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; makeprocedures (including, revoke or modify any material Tax electionwithout limitation, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liability; consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of a material amount of Taxes; grant any power of attorney procedures with respect to material Taxes; the payment of accounts payable and collection of accounts receivable), except as required by GAAP to the extent that the Company has notified Parent in writing prior to making such change required by GAAP;
(p) authorize, recommend, propose or announce an intention to adopt a plan of complete or partial liquidation or dissolution of the Company;
(q) enter into any Tax Sharing Agreement collective bargaining agreement;
(r) engage in any transaction with, or enter into any agreement, arrangement or understanding with, directly or indirectly, any of the Company’s affiliates other than pursuant to such agreements existing on the date hereof and disclosed on the Company Disclosure Schedule;
(s) enter into any agreement which contains any provision or covenant limiting or restricting the ability of the Company, or any closing of its affiliates, to sell any products or services of or to any Person, engage in any line of business or compete with or to obtain products or services from any Person or limiting the ability of any Person to provide products or services to the Company or any of its affiliates;
(t) enter into any agreement with respect to its Mariposa Software; or
(u) authorize any of, or other similar agreement; commit or change agree to take any method of accounting for Tax purposes;of, the foregoing actions.
Appears in 2 contracts
Samples: Merger Agreement (International Game Technology), Merger Agreement (Venture Catalyst Inc)
Conduct of Business. During the period from From the date of this Agreement to until the Effective Timeearlier of the Closing or the termination of this Agreement in accordance with its terms (the “Interim Period”), the Company shall, and shall cause its Subsidiaries to, except as expressly contemplated by this Agreement (including as contemplated by the Recapitalization and any PIPE Financing) or any other Transaction Agreement, as set forth on Section 6.01 of the Company Disclosure Letter, as consented to in writing in advance by VMware SPAC (which consent shall not be unreasonably conditioned, withheld or delayed), or as otherwise expressly required or prohibited by applicable Law (including by the restrictions set forth in subclauses COVID-19 Measures and Data Protection Laws), (ai) through (r) below) by this Agreement, Pivotal shall, conduct and shall cause each of its Subsidiaries to, carry on operate its business in the ordinary course, including its development and sales efforts course of business consistent with past practice or as currently contemplatedrequired or reasonably necessary to implement the Agreed Business Plan, and use commercially reasonable efforts to (i) preserve intact its business organization, assets, rights and properties, (ii) keep available maintain in effect the services of Master Franchise Agreements and comply in all material respects with the terms of, and perform in all material respects its current officersobligations under, employees and consultants and (iii) preserve its goodwill and its relationships with customers, suppliers, licensors, licensees, distributors and others having material business dealings with itthe Master Franchise Agreements. In addition to and without Without limiting the generality of the foregoing, during the period from the date of except as expressly contemplated by this Agreement to (including as contemplated by the Effective TimeRecapitalization, except any PIPE Financing and the Permitted Equity Financing (xin accordance with Section 8.03(a)) or in any other Transaction Agreement, as set forth in section 5.1 on Section 6.01 of the Pivotal Company Disclosure Letter, as consented to by SPAC in writing (y) such consent not to be unreasonably conditioned, withheld or delayed), or as specifically required by this Agreement or (z) as specifically required by applicable Law, Pivotal the Company shall not, and the Company shall cause its Subsidiaries not permit any of its Subsidiariesto, without VMware’s prior written consent (which consent, in during the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), toInterim Period:
(a) (i) declare, set aside change or pay any dividends on, amend the Company’s Organizational Documents or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock or other equity interests, except for dividends by a wholly owned Subsidiary of Pivotal to Pivotal or any other wholly owned Subsidiary of Pivotal, (ii) purchasechange or amend, redeem or otherwise acquire shares in any material respect, the Organizational Documents of capital stock or other equity interests any of Pivotal or its Subsidiaries or any optionsthe Company’s Subsidiaries, warrantsexcept, or rights to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations solely with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii) split, combine, reclassify or otherwise amend the terms of any of its capital stock or other equity interests or issue or authorize the issuance of any other securities in respect ofCompany’s Subsidiaries, in lieu of or in substitution for shares of its capital stock or other equity interestsas is reasonably necessary to implement the Agreed Business Plan;
(b) make, declare, set aside, establish a record date for or pay any dividend or distribution, other than any dividends or distributions from any wholly-owned Subsidiary of the Company either to the Company or any other wholly-owned Subsidiaries of the Company;
(c) except in the ordinary course of business, (x) enter into any Contract that would, if entered into prior to the date hereof, be any of the Contracts described in clauses (i) – (ix) or (xi) – (xiv) of Section 4.12(a) or (y) modify or amend in any material respect, renew (other than any automatic renewal in accordance with its terms), waive any material right under, provide any material consent under, terminate (other than any expiration in accordance with its terms) or allow to let lapse any of the Contracts described in clauses (i) – (ix) or (xi) – (xiv) of Section 4.12(a),
(d) (x) enter into any Contract that would, if entered into prior to the date hereof, be an Affiliate Agreement or (y) modify, amend, renew, waive any right under, provide any consent under, terminate or allow to let lapse any Affiliate Agreements;
(e) amend, fail to renew, waive any material right under, provide any consent under, terminate or allow to let lapse the Master Franchise Agreements, except (x) as required by the terms of such Master Franchise Agreement as of the date hereof in accordance with its terms as of the date hereof, or (y) in the ordinary course of business if such ordinary course would not reasonably be expected to be material to the business of the Company and its Subsidiaries, taken as a whole;
(f) (i) issue, deliver, sell, granttransfer, pledge or otherwise encumber dispose of, or subject to place any Lien (other than transfer restrictions a Permitted Lien) on, any Equity Securities of general applicability as may be provided under the Securities Act Company or other applicable securities Laws) any shares of its capital stock Subsidiaries, (ii) issue or other equity interests or grant any securities convertible into, exchangeable for or exercisable for any such shares or other equity interests, or any rightsoptions, warrants or options other rights to acquire, purchase or obtain any such shares or other equity interests, Equity Securities of the Company or any stock appreciation rightsof its Subsidiaries or (iii) permit the exercise or settlement of any options, “phantom” stock rights, performance units, rights to receive shares of capital stock of VMware on a deferred basis warrants or other rights linked to purchase or obtain any Equity Securities of the value Company or any of Class A Shares its Subsidiaries;
(g) sell, assign, transfer, convey, lease, license, abandon, allow to lapse or Class B Sharesexpire, subject to or grant any Lien (other than Permitted Liens) on, or otherwise dispose of, any material assets, rights or properties (including pursuant material Intellectual Property), other than (i) the sale or license of goods and services to Contracts customers in the ordinary course of business, (ii) the sale or other disposition of assets or equipment deemed by the Company in its reasonable business judgment to be obsolete or otherwise warranted in the ordinary course of business, (iii) grants of non-exclusive licenses or sublicenses of Intellectual Property in the ordinary course of business, (iv) as already contracted by the Company or any of its Subsidiaries on the date hereof, or (v) transactions among the Company and its wholly-owned Subsidiaries or among its wholly-owned Subsidiaries;
(h) waive, release, settle, compromise or otherwise resolve any inquiry, investigation, claim, Action, litigation or other legal proceedings entailing obligations that would impose any material restrictions on the business operations of the Company or its Subsidiaries, except in the ordinary course of business or where such waivers, releases, settlements or compromises involve only the payment of monetary damages in an amount less than $500,000 in the aggregate;
(i) except as otherwise required by the terms of any existing Company Benefit Plan or existing employment Contract as in effect on the date hereof (other than or as otherwise required under applicable Law or in the issuance ordinary course of Class A Shares upon the exercise of Pivotal Optionsbusiness, the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPP, in each case, that are outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with their terms as in effect on such date);
(c) amend or otherwise change, or authorize or propose to amend or otherwise change, its certificate of incorporation or bylaws (or similar organizational documents);
(d) directly or indirectly acquire or agree to acquire (i) by merging pay or consolidating withpromise to pay, purchasing a substantial equity interest fund any new, enter into or make any grant of any severance, change in control, retention or a substantial portion of the assets oftermination payment to any management level Company Employee, making an investment in or loan or capital contribution to or in any other manner, any corporation, partnership, association or other business organization or division thereof or (ii) take any assets that are otherwise material action to Pivotal and its Subsidiariesaccelerate any payments or benefits, exceptor the funding of any payments or benefits, payable or to become payable to any management-level Company Employees, (iii) take any action to materially increase any compensation or benefits of any management level Company Employee, except for bonuses, base salary increases or in each case, for (1) capital expenditures which shall be subject to the limitations of clause (i) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes connection with any promotions in the ordinary course of business consistent with Pivotal’s investment management policythat do not exceed $75,000 or (iii) establish, and adopt, enter into, materially amend or terminate any Company Benefit Plan or any Contract that would be a Company Benefit Plan if it were in existence as of the date of this Agreement;
(j) negotiate, modify, extend, or enter into any CBA or recognize or certify any labor union, labor organization, works council, or group of employees as the bargaining representative for any employees of the Company or its Subsidiaries;
(k) make any loans or advance any money or other property to any Person, except for (A) advances in the case ordinary course of clause business to employees, officers or directors of the Company or any of its Subsidiaries for expenses, (ii), acquisitions B) prepayments and deposits paid to suppliers of inventory, products the Company or services any of its Subsidiaries in the ordinary course of business; Table , (C) trade credit extended to customers of Contents
(e) directly the Company or indirectly sell, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien or otherwise dispose in whole or in part of any of its material properties, assets Subsidiaries in the ordinary course of business and (D) advances or rights (including any material Pivotal Intellectual Property Registrations) or any interest therein, except, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior to other payments among the Effective Time pursuant to existing Contracts that are not material to Pivotal Company and its wholly-owned Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Out;
(fl) redeem, purchase, repurchase or otherwise acquire, or offer to redeem, purchase, repurchase or acquire, any Equity Securities of the Company or any of its Subsidiaries other than (x) transactions among the Company and its wholly-owned Subsidiaries or among the wholly-owned Subsidiaries of the Company, or (y) in connection with the termination of employees or other service providers of the Company or any of its Subsidiaries under an existing Company Benefit Plan;
(m) adjust, split, combine, subdivide, recapitalize, reclassify or otherwise effect any change in respect of any Equity Securities of the Company or any of its Subsidiaries;
(n) materially amend or change any of the Company’s or any Company Subsidiary’s accounting policies or procedures, other than reasonable and usual amendments in the ordinary course of business or as required by a change in GAAP;
(o) adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganizationreorganization of the Company or its Subsidiaries;
(gp) fail make, change or revoke any material Tax election in a manner inconsistent with past practice, adopt, change or revoke any material accounting method with respect to maintainTaxes, file or amend any material Tax Return in a manner materially inconsistent with past practice, settle or compromise any material Tax claim or material Tax liability, enter into any material closing agreement with respect to any Tax, surrender any right to claim a material refund of Taxes, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrationschange its jurisdiction of tax residency;
(h) (iq) incur, create, issue, assume or otherwise become liable forguarantee any Indebtedness in excess of $20,000,000, other than (v) working capital loans required in the ordinary course of business consistent with past practice; (w) ordinary course trade payables, (x) between the Company and any of its wholly owned Subsidiaries or repaybetween any of such wholly owned Subsidiaries, cancel(y) as reasonably required to implement the Agreed Business Plan or (z) in connection with borrowings, forgive or prepayextensions of credit and other financial accommodations under the Company’s and its Subsidiaries’ existing credit facilities, notes and other existing Indebtedness as of the date of this Agreement and, in each case, any Indebtednessrefinancings thereof;
(r) other than in the ordinary course of business, (i) enter into any agreement that materially restricts the ability of the Company or amendits Subsidiaries to engage or compete in any line of business, modify (ii) enter into any agreement that materially restricts the ability of the Company or refinance its Subsidiaries to enter into a new line of business or (iii) enter into any Indebtedness new line of business;
(s) make or commit to make capital expenditures other than in an amount not in excess of (i) the aggregate amount contemplated in the Agreed Business Plan; or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, other than Pivotal $1,000,000 in a single transaction made by the Company or any direct or indirect wholly owned Subsidiary of Pivotalits Subsidiaries;
(it) incur enter into any Contract with any broker, finder, investment banker or commit other Person under which such Person is or will be entitled to incur any capital expenditure brokerage fee, finders’ fee or authorization or commitment other commission in connection with respect thereto that in the aggregate are in excess of $1,000,000Transactions;
(ju) except as required directly or indirectly acquire by merging or consolidating with, or by purchasing a substantial portion of the assets of, or by purchasing all of or a substantial equity interest in, or by any judgment by a court of competent jurisdictionother manner, (i) payany business or any corporation, dischargecompany, settle partnership, limited liability company, joint venture, association or satisfy any claimsother entity or Person or division thereof, liabilities or obligations (whether absolutein each case, accrued, asserted or unasserted, contingent or otherwise), other than except for (A) the payment, discharge or satisfaction purchases of inventory and other assets in the ordinary course of business, (B) as required by their terms as acquisitions or investments pursuant to existing Contracts in effect on the date as of this Agreement of claims, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or that were made available to SPAC, (C) incurred since the date acquisitions or investments that do not exceed (1) $750,000 in a single transaction or series of such financial statements in the ordinary course of business, (ii) cancel any material Indebtedness owed to Pivotal or any of its Subsidiaries, related transactions or (iii2) waive, release, grant or transfer any right of material value;
(k) (i) materially modify, materially amend, terminate, cancel, waive any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (ii) enter into any Contract that if in effect on the date hereof would be a Material Contract, other than customer contracts entered into in the ordinary course of business;
(l) commence any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal or any of its Subsidiaries), or compromise, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements in the ordinary course of business that involve only the payment of money damages not in excess of $500,000 individually or $2,000,000 in the aggregate, or (D) investments in any case without wholly-owned subsidiaries of the imposition of Company; or
(v) enter into any equitable relief onContract to do any action prohibited under this Section 6.01. Notwithstanding anything to the contrary contained herein (including this Section 6.01), or (x) nothing herein shall prevent the admission of wrongdoing by, Pivotal Company or any of its Subsidiaries;
Subsidiaries from taking (mor not taking) change its financial any action in order to comply with any applicable COVID-19 Measures or Tax accounting methodsany action that is taken in good faith in response to COVID-19, principles and no such action (or practices, except insofar failure to act) shall serve as may have been required by a change in GAAP or applicable Law;
(n) settle or compromise any material liability for Taxes or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis for SPAC to terminate this Agreement or assert that any of the conditions to the Closing contained herein have not been satisfied and (y) nothing in this Section 6.01 is intended to give SPAC or any of its Affiliates, directly or indirectly, the right to control or direct the business or operations of the Company or its Subsidiaries prior to the Closing, and prior to the Closing, the Company and its Subsidiaries shall exercise, consistent with past practice that would materially the terms and adversely affect its Tax liability; consent to any extension or waiver conditions of the limitation period applicable to any claim or assessment in respect of a material amount of Taxes; grant any power of attorney with respect to material Taxes; enter into any Tax Sharing Agreement or any closing agreement or other similar agreement; or change any method of accounting for Tax purposes;this Agreement, complete control and supervision over their respective businesses and operations.
Appears in 2 contracts
Samples: Merger Agreement (Silver Crest Acquisition Corp), Merger Agreement (Silver Crest Acquisition Corp)
Conduct of Business. (a) Conduct of Business by the Company. During the period from the date of this Agreement to the Effective Time, except as expressly set forth in Section 4.01(a) of the Company Disclosure Schedule, as consented to in writing in advance by VMware Parent or as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) specifically contemplated by this Agreement, Pivotal the Company shall, and shall cause each of its Subsidiaries subsidiaries to, carry on its business their respective businesses in the ordinary course, including its development and sales efforts as currently contemplated, course consistent with past practice and use commercially their reasonable best efforts to (i) comply with all applicable laws, rules and regulations and, to the extent consistent therewith, use their reasonable best efforts to preserve intact its business organization, assets, rights their assets and properties, (ii) keep available the services of its current officers, employees technology and consultants and (iii) preserve its goodwill and its their relationships with customers, suppliers, licensors, licensees, distributors and others having material business dealings with itthem. In addition to and without Without limiting the generality of the foregoing, during the period from the date of this Agreement to the Effective Time, except (x) as expressly set forth in section 5.1 Section 4.01(a) of the Pivotal Company Disclosure LetterSchedule, (y) as consented to in writing by Parent or as specifically required contemplated by this Agreement or (z) as specifically required by applicable LawAgreement, Pivotal the Company shall not, and shall not permit any of its Subsidiaries, without VMware’s prior written consent (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), subsidiaries to:
(ai) (ix) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock or other equity interests, except for dividends by a direct or indirect wholly owned Subsidiary subsidiary of Pivotal the Company to Pivotal or any other wholly owned Subsidiary of Pivotalits parent, (ii) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iiiy) split, combine, combine or reclassify or otherwise amend the terms of any of its capital stock or other equity 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 (z) purchase, redeem or otherwise acquire any shares of capital stock or any other equity interestssecurities of the Company or its subsidiaries or any options, warrants, calls or rights to acquire any such shares or other securities;
(bii) issue, deliver, sell, grant, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) any shares of its capital stock or stock, any other equity interests voting securities or any securities convertible into, or exchangeable for or exercisable for any such shares or other equity interestsfor, or any rightsoptions, warrants warrants, calls or options rights to acquire, any such shares shares, voting securities or other equity interests, or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive shares of capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof convertible securities (other than (A) the issuance of Class A Shares shares of Company Common Stock upon the exercise of Pivotal Options, the settlement of Pivotal RSUs Stock Options or the exercise of purchase rights under the Pivotal ESPP, in each case, that are ESPP outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with their present terms and (B) the granting of rights that may arise under the ESPP, as the ESPP is in effect on such datethe date of this Agreement);
(ciii) amend or otherwise change, or authorize or propose to amend or otherwise change, its certificate certificates of incorporation or bylaws by-laws (or similar organizational documents);
(div) directly or indirectly acquire or agree to acquire (ix) by merging or consolidating with, or by purchasing a substantial equity interest in or a substantial portion of the assets of, making an investment in or loan by purchasing all of or capital contribution to a substantial equity interest in, or in by any other manner, any business or any corporation, partnership, limited liability company, joint venture, association or other business organization entity or division thereof or (iiy) any assets that are otherwise material to Pivotal and its Subsidiariesother than inventory, exceptcomponents, in each case, for (1) capital expenditures which shall be subject to the limitations of clause (i) below and (2) purchases of marketable securities by raw materials or on behalf of Pivotal or its Subsidiaries for cash management purposes other immaterial assets in the ordinary course of business consistent with Pivotal’s investment management policy, and except in the case of clause (ii), acquisitions of inventory, products or services in the ordinary course of business; Table of Contentspast practice;
(ev) directly or indirectly sell, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien or otherwise dispose in whole or in part of any of its material properties, properties or assets or rights (including any material Pivotal shares of capital stock, voting securities or other rights, instruments or securities), except sales of inventory or used equipment and licenses of Intellectual Property Registrations) to end-user customers for their internal use or any interest therein, exceptsolely as necessary for such customers to use the Company's products and services, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior to case in the Effective Time pursuant to existing Contracts that are not material to Pivotal and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Outordinary course of business consistent with past practice;
(fvi) adopt (x) repurchase, prepay or incur any indebtedness or guarantee any indebtedness of another person or issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any of its subsidiaries, guarantee any debt securities of another person, enter into any "keep well" or other agreement to maintain any financial statement condition of another person or enter into a plan any arrangement having the economic effect of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay any of the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness foregoing or (iiy) make any loans, advances or capital contributions to, or investments in, any other Personperson, other than Pivotal the Company or any direct or indirect wholly owned Subsidiary subsidiary of Pivotalthe Company;
(ivii) incur or commit to incur make any new capital expenditure or authorization expenditures, or commitment with respect thereto that incur any obligations or liabilities in connection therewith, which, individually is in excess of $25,000 or, in the aggregate aggregate, are in excess of $1,000,000100,000;
(jviii) except as required by any judgment by a court of competent jurisdiction, (ix) pay, discharge, settle or satisfy any claimsclaims (including claims of stockholders), liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge or satisfaction in the ordinary course of business, (B) business consistent with past practice or as required by their terms as in effect on the date of this Agreement Agreement, of claims, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of Pivotal the Company included in the Pivotal Filed SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements in the ordinary course of businessbusiness consistent with past practice, (ii) cancel any material Indebtedness owed to Pivotal or any of its Subsidiaries, or (iiiy) waive, release, grant or transfer any right of material valuevalue or (z) waive any material benefits of, or agree to modify in any adverse respect, or fail to enforce, any confidentiality, standstill or similar agreement to which the Company or any of its subsidiaries is a party;
(kix) (i) materially modify, materially amend, terminate, cancel, waive amend or terminate any material right under Contract to which the Company or extend such subsidiary is a party, including any Material arrangements involving material Intellectual Property, or waive, release or assign any material rights or claims thereunder in a manner that is materially adverse to the Company with respect to the particular Contract in question;
(other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (iix) enter into any Contract that if in effect on material to the date hereof would be Company and its subsidiaries, taken as a Material Contractwhole, not otherwise prohibited by any other than customer provision of this Agreement, including any arrangements involving material Intellectual Property, except for contracts relating to the sale of products or services by the Company entered into in the ordinary course of businessbusiness consistent with past practice (it being understood and agreed that no Contract (I) pursuant to which the Company agrees (A) to accept information of any person on a confidential or trade secret basis without a "residuals" clause in substantially the form of Parent's standard form of "residuals" clause (which has previously been provided by Parent to the Company), (B) not to compete with any person or not to engage in any activities that would substantially limit the Company's ability to compete or engage in competitive activities, (C) not to solicit or attempt to hire, or to hire, any individual or (II) that has a term greater than six months, shall be permitted under this exception);
(lxi) commence except as required to comply with applicable law or any Legal Proceeding Contract, Benefit Plan or Benefit Agreement existing on the date of this Agreement, (other than a Legal Proceeding as a result A) increase in any manner the compensation or fringe benefits of, or pay any bonus to, any current or former director, officer, employee or consultant of a Legal Proceeding commenced against Pivotal the Company or any of its Subsidiaries)subsidiaries, (B) pay to any current or compromiseformer director, settle officer, employee or agree to settle consultant of the Company or any Legal Proceedingof its subsidiaries any benefit not provided for under any Contract, Benefit Plan or Benefit Agreement other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements the payment of cash compensation in the ordinary course of business that involve only consistent with past practice, (C) grant any awards under any Benefit Plan (including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock or the removal of existing restrictions in any Contract, Benefit Plan or Benefit Agreement or awards made thereunder), (D) take any action to fund or in any other way secure the payment of money damages not compensation or benefits under any Contract, Benefit Plan or Benefit Agreement or (E) take any action to accelerate the vesting or payment of any compensation or benefit under any Contract, Benefit Plan or Benefit Agreement;
(xii) form any subsidiary of the Company;
(xiii) enter into any Contract if consummation of the transactions contemplated hereby or compliance by the Company with the provisions of this Agreement will violate or conflict with, or result in excess any violation or breach of, or default (with or without notice or lapse of $500,000 individually time, or $2,000,000 both) under, or give rise to a right of, or result in, termination, cancelation or acceleration of any obligation or to loss of a material benefit under, or result in the aggregate, in any case without the imposition creation of any equitable relief onLien in or upon any of the properties or assets of the Company or Parent or any of their respective subsidiaries under, or give rise to any increased, additional, accelerated or guaranteed rights or entitlements under, any provision of such Contract;
(xiv) enter into any Contract containing any restriction on the admission ability of wrongdoing by, Pivotal the Company or any of its Subsidiariessubsidiaries to assign its rights, interests or obligations thereunder, unless such restriction expressly excludes any assignment to Parent or any of its subsidiaries in connection with or following the consummation of the Merger and the other transactions contemplated by this Agreement;
(mxv) change its financial take any action (or Tax accounting methodsomit to take any action) if such action (or omission) would or could reasonably be expected to result in (A) any representation and warranty of the Company set forth in this Agreement that is qualified as to materiality becoming untrue, principles (B) any such representation and warranty that is not so qualified becoming untrue in any material respect or practices, except insofar as may have been required by a change (C) any condition to the Merger set forth in GAAP or applicable Law;Article VI not being satisfied; or
(nxvi) settle or compromise authorize any material liability for Taxes or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax electionof, or change commit, resolve or agree to take any of, the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liability; consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of a material amount of Taxes; grant any power of attorney with respect to material Taxes; enter into any Tax Sharing Agreement or any closing agreement or other similar agreement; or change any method of accounting for Tax purposes;foregoing actions.
Appears in 2 contracts
Samples: Merger Agreement (Mainspring Inc), Merger Agreement (International Business Machines Corp)
Conduct of Business. During Except as expressly permitted or required by this Agreement, as provided in Section 5.2 of the Company Disclosure Schedule, or as required by applicable Law, during the period from the date of this Agreement to until the Effective Time, except as consented to in writing in advance by VMware or as otherwise expressly required or prohibited (including by A) the restrictions set forth in subclauses (a) through (r) below) by this Agreement, Pivotal Company shall, and shall cause each of its Subsidiaries to, carry on (x) conduct its business in the ordinary course, course consistent with past practice (including its development with respect to capital expenditures) and sales efforts as currently contemplated, and (y) use commercially reasonable efforts to (i) maintain and preserve intact in all material respects its business organization, assets, rights organization and properties, (ii) keep available the goodwill of those having business relationships with it and retain the services of its current officerspresent officers and key employees, employees and consultants and (iii) preserve in each case, to the end that its goodwill and its relationships with customers, suppliers, licensors, licensees, distributors ongoing business shall not be materially impaired at the Effective Time and others having material business dealings with it. In addition to and (B) without limiting the generality of the foregoing, during the period from the date of this Agreement to the Effective Time, except (x) as set forth in section 5.1 of the Pivotal Disclosure Letter, (y) as specifically required by this Agreement or (z) as specifically required by applicable Law, Pivotal Company shall not, and shall not permit any of its SubsidiariesSubsidiaries to, without VMwareParent’s prior written consent (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below which consent shall not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), to:
(a) (i) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock or other equity interests, except for dividends by a wholly owned Subsidiary of Pivotal to Pivotal or any other wholly owned Subsidiary of Pivotal, (ii) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii) split, combine, reclassify or otherwise amend the terms of any of its capital stock or other equity 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 other equity interests;
(b) issue, deliver, sell, grant, dispose of, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) any shares of its capital stock stock, voting securities or other equity interests interests, or any securities or rights convertible into, exchangeable for or exercisable for, or evidencing the right to subscribe for any such shares of its capital stock, voting securities or other equity interests, or any rights, warrants warrants, options, calls, commitments or options any other agreements of any character to acquirepurchase or acquire any shares of its capital stock, voting securities or equity interests or any securities or rights convertible into, exchangeable or exercisable for, or evidencing the right to subscribe for, any such shares of its capital stock, voting securities or other equity interests, or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive provided that the Company may issue shares of capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof (other than the issuance of Class A Shares Company Common Stock upon the exercise of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights options granted under the Pivotal ESPP, in each case, Company Stock Plans that are outstanding on the date of this Agreement and Made Available Agreement;
(b) (i) redeem, purchase or otherwise acquire any of its outstanding shares of capital stock, voting securities or equity interests, or any rights, warrants, options, calls, commitments or any other agreements of any character to VMware and acquire any shares of its capital stock, voting securities or equity interests; (ii) declare, set aside for payment or pay any dividend on, or make any other distribution in respect of, any shares of its capital stock or otherwise make any payments to its stockholders in accordance with their terms capacity as in effect on such date(other than dividends by a direct or indirect wholly owned Subsidiary of the Company to its parent); (iii) split, combine, subdivide or reclassify any shares of its capital stock; or (iv) amend (including by reducing an exercise price or extending a term) or waive any of its rights under, or accelerate the vesting under, any provision of the Company Stock Plans or any agreement evidencing any outstanding stock option or other right to acquire capital stock of the Company or any restricted stock purchase agreement or any similar or related contract;
(c) amend incur or otherwise changeassume any indebtedness for borrowed money or guarantee any indebtedness or issue or sell any debt securities or options, warrants, calls or authorize other rights to acquire any debt securities of the Company or propose any of its Subsidiaries, other than (i) in the ordinary course of business consistent with past practice, including any borrowings under the existing credit facilities of the Company and its Subsidiaries to amend fund working capital needs, and (ii) borrowings from the Company by a direct or otherwise change, its certificate indirect wholly owned Subsidiary of incorporation or bylaws (or similar organizational documents)the Company in the ordinary course of business consistent with past practice;
(d) directly sell, transfer, lease, mortgage, encumber or indirectly acquire otherwise dispose of or agree subject to any Lien (including pursuant to a sale-leaseback transaction or an asset securitization transaction) any of its properties or assets (including securities of Subsidiaries) other than in the ordinary course of business to any Person, except (i) pursuant to Contracts in force on the date of this Agreement and listed on Section 5.2(d) of the Company Disclosure Schedule, (ii) by incurring Permitted Liens, (iii) dispositions of obsolete or worthless assets, or (iv) sales of properties or assets (excluding securities of Subsidiaries) in the aggregate less than $1,000,000;
(e) make any capital expenditure or expenditures which (i) involves the purchase of real property or (ii) is in excess of $2,000,000 individually or $2,000,000 in the aggregate, except for any such capital expenditures provided for in the Company’s 2006 capital expenditure plan as heretofore made available to Parent or Parent’s outside counsel;
(f) acquire (i) by merging or consolidating with, or by purchasing all of or a substantial equity interest in in, or a substantial portion of the assets of, making an investment in or loan or capital contribution to or in by any other mannermanner (including asset purchase), any corporationPerson or division, partnershipbusiness or equity interest of any Person, association or other business organization or division thereof or (ii) any assets that are otherwise material to Pivotal and its Subsidiaries, except, in each case, for (1) capital expenditures which shall be subject to the limitations of clause (i) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes except in the ordinary course of business consistent with Pivotal’s past practice, any assets that, individually or in the aggregate, have a purchase price in excess of $1,000,000;
(g) make any material investment management policy(by contribution to capital, property transfers, purchase of securities or otherwise) in, or loan or advance (other than travel and similar advances to its employees in the ordinary course of business consistent with past practice) to, any Person other than a direct or indirect wholly owned Subsidiary of the Company;
(h) (i) enter into, terminate or amend any Material Contract, other than (A) Material Contracts the subject matter of which is addressed elsewhere in this Section 5.2 or (B) Material Contracts of the type described in clauses (B), (D), (F), (G), (I), (J), (K), and except in the case (M) of clause (iiSection 3.13(a), acquisitions of inventorywith respect to which the Company and its Subsidiaries may enter into, products amend or services terminate in the ordinary course of business; Table , consistent with past practice, (ii) enter into or extend the term or scope of Contentsany Contract that purports to restrict the Company, or any existing or future Subsidiary or Affiliate of the Company, from engaging in any line of business or from conducting business in any geographic area, or (iii) amend or modify the Engagement Letter;
(ei) directly or indirectly sell, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien or otherwise dispose in whole or in part increase the compensation of any of its material propertiesdirectors, assets officers or rights employees or enter into, establish, amend or terminate any employment, consulting, retention, change in control, collective bargaining, bonus or other incentive compensation, profit sharing, health or other welfare, stock option or other equity (including or equity-based), pension, retirement, vacation, severance, deferred compensation or other compensation or benefit plan, policy, agreement, trust, fund or arrangement with, for or in respect of, any material Pivotal Intellectual Property Registrations) stockholder, director, officer, other employee, consultant or any interest thereinAffiliate, except, in each case, other than (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances as required to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal applicable Law, Section 5.11 or the terms of the agreements set forth on Section 5.2(i) of the Company Disclosure Schedule, (ii) the hiring and termination of employees of the Company and its SubsidiariesSubsidiaries in the ordinary course of business consistent with past practice and consistent with the Company’s obligations in Section 5.2(A)(y) to, taken as and to cause its Subsidiaries to, use commercially reasonable efforts to retain the services of their present officers and key employees (provided that (x) no employment agreement shall be entered into without Parent’s prior consent, and (y) no employee with a whole written employment agreement or written severance agreement shall be terminated without the Company first reasonably consulting with Parent), and (ii) Ordinary Course Licenses Outincreases in salaries, wages and benefits of employees (other than officers) made in the ordinary course of business and in amounts and in a manner consistent with past practice;
(fj) make, revoke or change any material election concerning Taxes or Tax Returns, file any amended Tax Return, enter into any closing agreement with respect to Taxes, settle or compromise any material Tax claim or assessment or surrender any right to claim a refund of Taxes or obtain any Tax ruling, or waive or extend the statute of limitations in respect of any Material Tax (other than pursuant to extensions of time to file Tax Returns in the ordinary course of business);
(k) make any changes in financial or tax accounting methods, principles or practices (or change an annual accounting period), except insofar as may be required by a change in GAAP or applicable Law;
(l) amend the Company Charter Documents or the Subsidiary Documents;
(m) adopt or enter into a plan or agreement of complete or partial liquidation, dissolution, restructuring, recapitalization recapitalization, merger, consolidation or other reorganizationreorganization (other than transactions exclusively between wholly owned Subsidiaries of the Company);
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, other than Pivotal or any direct or indirect wholly owned Subsidiary of Pivotal;
(i) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto that in the aggregate are in excess of $1,000,000;
(j) except as required by any judgment by a court of competent jurisdiction, (in) pay, discharge, settle or satisfy any material claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge discharge, settlement or satisfaction in the ordinary course of business, (B) as required by accordance with their terms as in effect on the date of this Agreement of claimsliabilities, liabilities claims or obligations reflected or reserved against in the most recent audited consolidated financial statements (or the notes thereto) of Pivotal the Company included in the Pivotal Filed Company SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements in the ordinary course of business, (ii) cancel any material Indebtedness owed to Pivotal or any of its Subsidiaries, or (iii) waive, release, grant or transfer any right of material valuebusiness consistent with past practice;
(ko) (iexcept as set forth on Section 5.2(o) materially modifyof the Company Disclosure Schedule, materially amend, terminate, cancel, waive any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (ii) enter into any Contract that if in effect on the date hereof would be a Material Contract, other than customer contracts entered into in the ordinary course of business;
(l) commence any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal or any of its Subsidiaries), or compromise, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements in the ordinary course of business that involve only the payment of money damages not in excess of $500,000 individually or $2,000,000 in the aggregate, in any case without the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal or any of its Subsidiaries;
(m) change its financial or Tax accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law;
(n) settle or compromise any litigation, proceeding or investigation material liability for Taxes to the Company and its Subsidiaries taken as a whole; or
(p) agree, in writing or surrender otherwise, to take any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liability; consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of a material amount of Taxes; grant any power of attorney with respect to material Taxes; enter into any Tax Sharing Agreement or any closing agreement or other similar agreement; or change any method of accounting for Tax purposes;foregoing actions.
Appears in 2 contracts
Samples: Merger Agreement (Duratek Inc), Merger Agreement (EnergySolutions, Inc.)
Conduct of Business. During the period from From the date of this Agreement through the earlier of the Closing or valid termination of this Agreement pursuant to Article X (the Effective Time“Interim Period”), except as consented to in writing in advance by VMware or as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) by this Agreement, Pivotal Company shall, and shall cause each of its Subsidiaries to, carry on its except as otherwise explicitly contemplated by this Agreement or the Ancillary Agreements or required by Law or as consented to by Acquiror in writing (which consent shall not be unreasonably conditioned, withheld, delayed or denied), use reasonable best efforts to operate the business of the Company in the ordinary course, including its development and sales efforts as currently contemplated, and use commercially reasonable efforts to (i) preserve intact its business organization, assets, rights and properties, (ii) keep available the services of its current officers, employees and consultants and (iii) preserve its goodwill and its relationships course consistent with customers, suppliers, licensors, licensees, distributors and others having material business dealings with itpast practice. In addition to and without Without limiting the generality of the foregoing, during the period from the date of this Agreement to the Effective Time, except (x) as set forth in section 5.1 on Section 6.1 of the Pivotal Company Disclosure LetterLetter or as consented to by Acquiror in writing (which consent shall not be unreasonably conditioned, (ywithheld, delayed or denied) as specifically required by this Agreement or (z) as specifically required by applicable Law, Pivotal the Company shall not, and the Company shall cause its Subsidiaries not permit any of its Subsidiariesto, without VMware’s prior written consent except as otherwise contemplated by this Agreement (which consent, in including the cases of the matters set forth in subclauses (e), (g), (i), (jPre-Closing Restructuring Plan) or (k) below shall not be unreasonably withheld, conditioned the Ancillary Agreements or delayed, and in all other cases shall be in VMware’s sole discretion), torequired by Law:
(a) change or amend the Governing Documents of the Company or any of the Company’s Subsidiaries or form or cause to be formed any new Subsidiary of the Company;
(ib) declare, set aside make or pay declare any dividends on, dividend or distribution to the stockholders of the Company or make any other distributions (whether in cash, stock or property) in respect ofof any of the Company Capital Stock or equity interests;
(c) split, combine, reclassify, recapitalize or otherwise amend any terms of any shares or series of the Company’s or any of its Subsidiaries’ capital stock or other equity interests, except for dividends any such transaction by a wholly owned Subsidiary of Pivotal to Pivotal or any other the Company that remains a wholly owned Subsidiary of Pivotal, the Company after consummation of such transaction;
(iid) purchase, repurchase, redeem or otherwise acquire any issued and outstanding share capital, outstanding shares of capital stock stock, membership interests or other equity interests of Pivotal the Company or its Subsidiaries or any optionsSubsidiaries, warrants, or rights to acquire any such shares or other equity interests, other than except for (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (Bi) the acquisition by Pivotal the Company or any of Pivotal Options its Subsidiaries of any shares of capital stock, membership interests or Pivotal RSUs on other equity interests (other than Company Awards) of the date of this Agreement Company or as permitted by this Agreement its Subsidiaries in connection with the forfeiture or cancellation of such awardsinterests and (ii) transactions between the Company and any wholly owned Subsidiary of the Company or between wholly owned Subsidiaries of the Company;
(e) enter into, modify in any material respect or terminate (other than expiration in accordance with their terms on the date of this Agreement, or (iii) split, combine, reclassify or otherwise amend the terms of any of its capital stock or other equity 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 other equity interests;
(b) issue, deliver, sell, grant, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Lawsterms) any shares Contract of its capital stock or other equity interests or any securities convertible into, exchangeable for or exercisable for any such shares or other equity interestsa type required to be listed on Section 4.12(a) of the Company Disclosure Letter, or any rights, warrants or options to acquire, any such shares or other equity interests, or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive shares of capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof (other than the issuance of Class A Shares upon the exercise of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPPReal Property Lease, in each case, that are outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with their terms as in effect on such date);
(c) amend or otherwise change, or authorize or propose to amend or otherwise change, its certificate of incorporation or bylaws (or similar organizational documents);
(d) directly or indirectly acquire or agree to acquire (i) by merging or consolidating with, purchasing a substantial equity interest in or a substantial portion of the assets of, making an investment in or loan or capital contribution to or in any other manner, any corporation, partnership, association or other business organization or division thereof or (ii) any assets that are otherwise material to Pivotal and its Subsidiaries, except, in each case, for (1) capital expenditures which shall be subject to the limitations of clause (i) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes than in the ordinary course of business consistent with Pivotal’s investment management policypast practice or as required by Law;
(f) sell, and assign, transfer, convey, lease or otherwise dispose of any material tangible assets or properties of the Company or its Subsidiaries, except in the case for (i) sale of clause (ii), acquisitions of inventory, products or services Owned Residential Properties to customers in the ordinary course of business; Table of Contents
(e) directly or indirectly sellbusiness consistent with past practice, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien or otherwise dispose in whole or in part of any of its material properties, assets or rights (including any material Pivotal Intellectual Property Registrations) or any interest therein, except, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Out;
dispositions of obsolete or worthless equipment (fiii) adopt transactions among the Company and its wholly owned Subsidiaries or enter into a plan among its wholly owned Subsidiaries and (iv) transactions in the ordinary course of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganizationbusiness consistent with past practice;
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay the required fees acquire any ownership interest in any jurisdiction, any material Pivotal Intellectual Property Registrationsreal property (other than the acquisition of the Owned Residential Properties in the ordinary course of business consistent with past practice);
(h) except as otherwise required by Law, existing Company Benefit Plans or the Contracts listed on Section 4.12 of the Company Disclosure Letter, (i) incurgrant any severance, createretention, assume change in control or otherwise become liable fortermination or similar pay, except in connection with the promotion, hiring or repaytermination of employment of any employee of the Company or its Subsidiaries (other than the Persons set forth in Section 6.1(h)(i) of the Company Disclosure Letter (the “Excluded Employees”)) in the ordinary course of business consistent with past practice, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (ii) make any loanschange in the key management structure of the Company or any of the Company’s Subsidiaries with respect to any Excluded Employee, advances including the hiring of additional officers or capital contributions to, or investments in, any other Personthe termination of existing officers, other than Pivotal terminations for cause or due to death or disability, (iii) terminate, adopt, enter into or materially amend any Company Benefit Plan, (iv) increase the cash compensation or bonus opportunity of any employee, officer, director or other individual service provider, except in the ordinary course of business consistent with past practice, (v) establish any trust or take any other action to secure the payment of any compensation payable by the Company or any direct of the Company’s Subsidiaries or indirect wholly owned Subsidiary (vi) take any action to amend or waive any performance or vesting criteria or to accelerate the time of Pivotalpayment or vesting of any compensation or benefit payable by the Company or any of the Company’s Subsidiaries, except in the ordinary course of business consistent with past practice;
(i) incur acquire by merger or commit to incur consolidation with, or merge or consolidate with, or purchase substantially all or a material portion of the assets of, any capital expenditure corporation, partnership, association, joint venture or authorization other business organization or commitment with respect thereto that in the aggregate are in excess of $1,000,000division thereof;
(j) except as required by any judgment by a court of competent jurisdiction, (i) payissue or sell any debt securities or warrants or other rights to acquire any debt securities of the Company or any Subsidiary of the Company or otherwise incur or assume any Indebtedness, dischargeor (ii) guarantee any Indebtedness of another Person, settle except (x) under the Inventory Financing Documents or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (Ay) the payment, discharge or satisfaction in the ordinary course of business, (B) as required by their terms as in effect on the date of this Agreement of claims, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements in the ordinary course of business, (ii) cancel any material Indebtedness owed to Pivotal or any of its Subsidiaries, or (iii) waive, release, grant or transfer any right of material valuebusiness consistent with past practice;
(k) (i) materially modifymake or change any material election in respect of material Taxes, (ii) materially amend, terminatemodify or otherwise change any filed material Tax Return, cancel(iii) adopt or request permission of any taxing authority to change any accounting method in respect of material Taxes, waive any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (iiiv) enter into any Contract that if closing agreement in effect respect of material Taxes executed on or prior to the date hereof would be a Material ContractClosing Date or enter into any Tax sharing or similar agreement, other than customer contracts entered into in the ordinary course of business;
(lv) commence any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal or any of its Subsidiaries), or compromise, settle or agree to settle any Legal Proceedingclaim or assessment in respect of material Taxes, other than Transaction Litigation which is subject (vi) surrender or allow to section 5.7), compromises, settlements or agreements in the ordinary course of business that involve only the payment of money damages not in excess of $500,000 individually or $2,000,000 in the aggregate, in expire any case without the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal or any of its Subsidiaries;
(m) change its financial or Tax accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law;
(n) settle or compromise any material liability for Taxes or surrender any material right to claim for a refund of Taxes; file any amended Tax Return material Taxes or claim for Tax refund; make, revoke or modify any material Tax election, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liability; (vii) consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of a material amount Taxes or in respect to any material Tax attribute that would give rise to any claim or assessment of Taxes; ;
(l) take any action, or knowingly fail to take any action, where such action or failure to act could reasonably be expected to prevent the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code and the Treasury Regulations;
(m) issue any additional shares of Company Capital Stock or securities exercisable for or convertible into Company Capital Stock, other than the issuance of Company Common Stock upon the exercise or settlement of Company Options or Restricted Stock Unit Awards in the ordinary course of business under Company Incentive Plan and applicable award agreement, in each case, outstanding on the date of this Agreement in accordance with their terms as in effect as of the date of this Agreement, or grant any power additional Company Awards or other equity or equity-based compensation;
(n) adopt a plan of, or otherwise enter into or effect a, complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of attorney the Company or its Subsidiaries (other than the Merger);
(o) waive, release, settle, compromise or otherwise resolve any inquiry, investigation, claim, Action, litigation or other Legal Proceedings, except in the ordinary course of business or where such waivers, releases, settlements or compromises involve only the payment of monetary damages in an amount less than $1,000,000 in the aggregate;
(p) grant to, or agree to grant to, any Person rights to any Intellectual Property that is material to the Company and its Subsidiaries, or dispose of, abandon or permit to lapse any rights to any Intellectual Property that is material to the Company and its Subsidiaries except for the expiration of Company Registered Intellectual Property in accordance with respect the applicable statutory term (or in the case of domain names, applicable registration period) or in the reasonable exercise of the Company’s or any of its Subsidiaries’ business judgment as to the costs and benefits of maintaining the item;
(q) disclose or agree to disclose to any Person (other than Acquiror or any of its representatives) any trade secret or any other material Taxesconfidential or proprietary information, know-how or process of the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice and pursuant to obligations to maintain the confidentiality thereof;
(r) make or commit to make capital expenditures other than in an amount not in excess of the amount set forth on Section 6.1(r) of the Company Disclosure Letter, in the aggregate;
(s) manage the Company’s and its Subsidiaries’ working capital (including paying amounts payable in a timely manner when due and payable) in a manner other than in the ordinary course of business consistent with past practice;
(t) enter into or extend any collective bargaining agreement or similar labor agreement, other than as required by applicable Law, or recognize or certify any labor union, labor organization, or group of employees of the Company or its Subsidiaries as the bargaining representative for any employees of the Company or its Subsidiaries;
(u) terminate without replacement or fail to use reasonable efforts to maintain any License material to the conduct of the business of the Company and its Subsidiaries, taken as a whole;
(v) waive the restrictive covenant obligations of any current employee of the Company or any of the Company’s Subsidiaries;
(w) (i) limit the right of the Company or any of the Company’s Subsidiaries to engage in any line of business or in any geographic area, to develop, market or sell products or services, or to compete with any Person or (ii) grant any exclusive or similar rights to any Person, in each case, except where such limitation or grant does not, and would not be reasonably likely to, individually or in the aggregate, materially and adversely affect, or materially disrupt, the ordinary course operation of the businesses of the Company and its Subsidiaries, taken as a whole;
(x) terminate or amend in a manner materially detrimental to the Company or any of the Company’s Subsidiaries any Inventory Financing Documents;
(y) terminate without replacement or amend in a manner materially detrimental to the Company and its Subsidiaries, taken as a whole, any insurance policy insuring the business of the Company or any of the Company’s Subsidiaries; or
(z) enter into any Tax Sharing Agreement or agreement to do any closing agreement or other similar agreement; or change any method of accounting for Tax purposes;action prohibited under this Section 6.1.
Appears in 1 contract
Samples: Merger Agreement (Social Capital Hedosophia Holdings Corp. II)
Conduct of Business. During Except as contemplated or permitted by this Agreement or as required by applicable Law or as contemplated by Section 5.2 of the Company Disclosure Schedule, during the period from the date of this Agreement to until the Effective Time, except as consented to unless Parent otherwise consents (which consent shall not, in writing in advance by VMware the case of clauses (d), (g) or as otherwise expressly required (m), be unreasonably withheld or prohibited (including by delayed), the restrictions set forth in subclauses (a) through (r) below) by this Agreement, Pivotal Company shall, and shall cause each of its Subsidiaries to, carry on (x) conduct its business in all material respects in the ordinary coursecourse of business consistent with past practice, including its development (y) comply in all material respects with all applicable Laws and sales efforts as currently contemplatedthe requirements of all Company Material Contracts, and (z) use commercially reasonable efforts to (i) maintain and preserve intact its business organization, assets, rights organization and properties, (ii) keep available the goodwill of those having business relationships with it and retain the services of its current officerspresent officers and key employees, employees and consultants and (iii) preserve in each case, to the end that its goodwill and its relationships with customers, suppliers, licensors, licensees, distributors and others having material ongoing business dealings with itshall be unimpaired at the Effective Time. In addition to and without Without limiting the generality of the foregoing, except as contemplated by Section 5.2 of the Company Disclosure Schedule, during the period from the date of this Agreement to until the Effective Time, except (x) as set forth in section 5.1 of the Pivotal Disclosure Letter, (y) as specifically required by this Agreement or (z) as specifically required by applicable Law, Pivotal Company shall not, and shall not permit any of its Subsidiaries, without VMware’s prior written consent (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), Subsidiaries to:
(a) (i) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock or other equity interests, except for dividends by a wholly owned Subsidiary of Pivotal to Pivotal or any other wholly owned Subsidiary of Pivotal, (ii) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii) split, combine, reclassify or otherwise amend the terms of any of its capital stock or other equity 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 other equity interests;
(b) issue, deliver, sell, grant, pledge sell or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) grant any shares of its capital stock or other equity interests stock, or any securities or rights convertible into, exchangeable for or exercisable for, or evidencing the right to subscribe for any such shares or other equity interestsof its capital stock, or any rights, warrants or options to acquire, purchase any such shares or other equity interestsof its capital stock, or any stock appreciation rightssecurities or rights convertible into, “phantom” stock rightsexchangeable or exercisable for, performance unitsor evidencing the right to subscribe for, rights to receive any shares of its capital stock stock, provided that the Company may issue shares of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof (other than the issuance of Class A Shares Company Common Stock upon the exercise of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPP, in each case, options that are outstanding on the date of this Agreement; (ii) redeem, purchase or otherwise acquire any of its outstanding shares of capital stock, or any rights, warrants or options to acquire any shares of its capital stock, except (x) pursuant to commitments in effect as of the date of this Agreement and Made Available disclosed in Section 3.2(a) of the Company Disclosure Schedule or (y) in connection with withholding to VMware and satisfy tax obligations with respect to options, acquisitions in connection with the forfeiture of equity awards, or acquisitions in connection with the net exercise of options; (iii) declare, set aside for payment or pay any dividend on, or make any other distribution in respect of, any shares of its capital stock or otherwise make any payments to its stockholders in accordance with their terms capacity as in effect on such date(other than dividends by a direct or indirect wholly owned Subsidiary of the Company to its parent); or (iv) split, combine, subdivide or reclassify any shares of its capital stock;
(b) incur or assume any Indebtedness, other than amounts drawn against the Revolver;
(c) amend sell, transfer, lease, mortgage, encumber or otherwise changedispose of any of their respective properties or assets that are individually or in the aggregate material to the Company and its Subsidiaries taken as a whole, or authorize or propose to amend or otherwise change, its certificate of incorporation or bylaws (or similar organizational documents);
(d) directly or indirectly acquire or agree to acquire except (i) by merging or consolidating withsales, purchasing a substantial equity interest in or a substantial portion of the assets ofleases, making an investment in or loan or capital contribution to or in any other manner, any corporation, partnership, association or other business organization or division thereof or (ii) any assets that are otherwise material to Pivotal rentals and its Subsidiaries, except, in each case, for (1) capital expenditures which shall be subject to the limitations of clause (i) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes licenses in the ordinary course of business consistent with Pivotal’s investment management policypast practice, and except in the case of clause (ii), acquisitions of inventory, products or services in the ordinary course of business; Table of Contents
(e) directly or indirectly sell, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien or otherwise dispose in whole or in part of any of its material properties, assets or rights (including any material Pivotal Intellectual Property Registrations) or any interest therein, except, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Out;
(f) adopt or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) fail pursuant to maintain, or allow to lapse, or abandon, including by failure to pay the required fees Contracts in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, other than Pivotal or any direct or indirect wholly owned Subsidiary of Pivotal;
(i) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto that in the aggregate are in excess of $1,000,000;
(j) except as required by any judgment by a court of competent jurisdiction, (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge or satisfaction in the ordinary course of business, (B) as required by their terms as in effect force on the date of this Agreement of claims, liabilities or obligations reflected or reserved against and disclosed in the most recent audited financial statements (or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements in the ordinary course of business, (ii) cancel any material Indebtedness owed to Pivotal or any of its Subsidiaries, or (iii) waive, release, grant or transfer any right of material value;
(k) (i) materially modify, materially amend, terminate, cancel, waive any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (ii) enter into any Contract that if in effect on the date hereof would be a Material Contract, other than customer contracts entered into in the ordinary course of business;
(l) commence any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal or any of its Subsidiaries), or compromise, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements in the ordinary course of business that involve only the payment of money damages not in excess of $500,000 individually or $2,000,000 in the aggregate, in any case without the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal or any of its Subsidiaries;
(m) change its financial or Tax accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law;
(n) settle or compromise any material liability for Taxes or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liability; consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of a material amount of Taxes; grant any power of attorney with respect to material Taxes; enter into any Tax Sharing Agreement or any closing agreement or other similar agreement; or change any method of accounting for Tax purposes;Section
Appears in 1 contract
Samples: Merger Agreement (Dynamex Inc)
Conduct of Business. During the period from commencing on the date hereof and ending on the Closing Date (the "Pre-Closing Period") the Contributor and its Affiliates shall operate the Business in the ordinary course of this Agreement business and shall use their respective commercially reasonable efforts to preserve intact relationships with lessors, contractors, customers, suppliers and other Persons who have business relationships with the Contributor or relating to the Effective TimeBusiness, including applicable regulatory agencies, and to preserve, maintain and protect the value of the Contributed Assets. Without limiting the generality or effect of the previous sentence, during the Pre-Closing Period, the Contributor shall not, except (i) as consented to in writing in advance by VMware or set forth on Schedule 5.1, (ii) as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) contemplated by this Agreement, Pivotal shall, and shall cause each of its Subsidiaries to, carry on its business in the ordinary course, including its development and sales efforts as currently contemplated, and use commercially reasonable efforts to (i) preserve intact its business organization, assets, rights and properties, (ii) keep available the services of its current officers, employees and consultants and (iii) preserve its goodwill and its relationships with customers, suppliers, licensors, licensees, distributors and others having material business dealings with it. In addition to and without limiting the generality of the foregoing, during the period from the date of this Agreement to the Effective Time, except (x) as set forth in section 5.1 of the Pivotal Disclosure Letter, (y) as specifically required by this Agreement Law or (ziv) as specifically required by applicable Law, Pivotal shall not, and shall not permit any of its Subsidiaries, without VMware’s with the prior written consent of the Acquirer (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below consent shall not be unreasonably withheld, conditioned delayed or delayed, and in all other cases shall be in VMware’s sole discretion), to:conditioned):
(a) (i) declare, set aside amend or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any allow to be amended the Organizational Documents of its capital stock or other equity interests, YERR except for dividends by a wholly owned Subsidiary to meet the requirements of Pivotal to Pivotal or any other wholly owned Subsidiary of Pivotal, (ii) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii) split, combine, reclassify or otherwise amend the terms of any of its capital stock or other equity 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 other equity interestssection 5.5 below;
(b) issuecause or permit the merger or consolidation of YERR with or into any other Person or liquidate, deliver, sell, grant, pledge dissolve or recapitalize YERR or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under wind up the Securities Act or other applicable securities Laws) any shares of its capital stock or other equity interests or any securities convertible into, exchangeable for or exercisable for any such shares or other equity interests, or any rights, warrants or options to acquire, any such shares or other equity interests, or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive shares of capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof (other than the issuance of Class A Shares upon the exercise of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPP, in each case, that are outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with their terms as in effect on such date)Business;
(c) amend cause or otherwise change, or authorize or propose to amend or otherwise change, its certificate of incorporation or bylaws (or similar organizational documents);
(d) directly or indirectly acquire or agree permit YERR to acquire (i) including, without limitation, by merging merger, consolidation or consolidating with, purchasing a substantial the acquisition of any equity interest in or a substantial portion of the assets of, making an investment in or loan or capital contribution to or in any other manner, any corporation, partnership, association or other business organization or division thereof or (ii) any assets that are otherwise material to Pivotal and its Subsidiaries, except, in each case, for (1) capital expenditures which shall be subject to the limitations of clause (i) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes in the ordinary course of business consistent with Pivotal’s investment management policy, and except in the case of clause (iiassets), acquisitions of inventory, products or services in the ordinary course of business; Table of Contents
(e) directly or indirectly sell, leaseassign, licensetransfer, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien lease or otherwise dispose in whole or in part of any of its material properties, assets or rights (including any material Pivotal Intellectual Property Registrations) or any interest therein, except, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Out;
(f) adopt or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (ii) make any loans, advances or capital contributions to, or investments in, any other Personassets, other than Pivotal or any direct or indirect wholly owned Subsidiary of Pivotal;
(i) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto that in the aggregate are in excess of $1,000,000;
(j) except as required by any judgment by a court of competent jurisdiction, (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge or satisfaction in the ordinary course of business, (B) as required by their terms as in effect on the date of this Agreement of claims, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements in the ordinary course of business, (ii) cancel any material Indebtedness owed to Pivotal or any of its Subsidiaries, or (iii) waive, release, grant or transfer any right of material value;
(k) (i) materially modify, materially amend, terminate, cancel, waive any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (ii) enter into any Contract that if in effect on the date hereof would be a Material Contract, other than customer contracts entered into in the ordinary course of business;
(ld) commence any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal or any of its Subsidiaries), or compromise, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements in the ordinary course of business that involve only the payment of money damages not in excess of $500,000 individually or $2,000,000 in the aggregate, in any case without the imposition dispose of any equitable relief onYERR Asset, or the admission of wrongdoing by, Pivotal or any of its Subsidiaries;
(m) change its financial or Tax accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law;
(n) settle or compromise any material liability for Taxes or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business business, provided that any Contributed Assets disposed pursuant to this clause have a value less than $100,000 individually and on a basis consistent with past practice that would materially and adversely affect its Tax liability; consent to $500,000 in the aggregate;
(e) permit or allow any extension or waiver of the limitation period applicable to Lien against any claim or assessment in respect of a material amount of Taxes; grant any power of attorney with respect to material Taxes; enter into any Tax Sharing Agreement Contributed Asset or any closing agreement asset owned by YERR other than a Permitted Lien or any Lien that will be terminated and released prior to the Closing;
(f) issue, transfer, sell, deliver or otherwise dispose of (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any equity interests in YERR or securities, options, warrants, calls or other similar agreement; rights to purchase equity interests in YERR (including any notes, bonds or change other securities or obligations convertible into or exchangeable for any method of accounting for Tax purposesequity interests in YERR);
Appears in 1 contract
Samples: Contribution, Conveyance and Assumption Agreement (Yangtze River Development LTD)
Conduct of Business. (a) Conduct of Business by the Company. During the period from the date of this Agreement to the Effective Time, or the date, if any, on which this Agreement is earlier terminated pursuant to Section 7.1, and except as consented to may be agreed in writing in advance by VMware Parent, as may be expressly permitted pursuant to this Agreement or as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) by this AgreementSection 4.1 of the Company Disclosure Schedule, Pivotal the Company shall, and shall cause each of its Subsidiaries to, carry on its business their respective businesses in the ordinary coursecourse consistent with past practice and in compliance in all material respects with all applicable laws and regulations and, including its development and sales efforts as currently contemplatedto the extent consistent therewith, and use commercially all reasonable best efforts to (i) preserve intact its current business organizationorganizations, assets, rights and properties, (ii) keep available the services of its current officers, officers and key employees and consultants and (iii) preserve its goodwill and its relationships with customers, suppliers, licensors, licensees, distributors and others having material business dealings with itthem with the intention that its goodwill and ongoing business shall be preserved. In addition to and without Without limiting the generality of the foregoing, during the period from the date of this Agreement to the Effective Time, or the date, if any, on which this Agreement is earlier terminated pursuant to Section 7.1, and except (x) as may be agreed in writing by Parent, as may be expressly permitted pursuant to this Agreement or as set forth in section 5.1 Section 4.1 of the Pivotal Company Disclosure LetterSchedule, (y) as specifically required by this Agreement or (z) as specifically required by applicable Law, Pivotal the Company shall not, and shall not permit any of its Subsidiaries, without VMware’s prior written consent (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), Subsidiaries to:
(ai) (ix) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) ), in respect of, any of its capital stock stock, other than dividends or other equity interests, except for dividends distributions by a direct or indirect wholly owned Subsidiary of Pivotal the Company to Pivotal or any other wholly owned Subsidiary of Pivotalits parent, (iiy) split, combine or reclassify any of its capital stock or amend the terms of any outstanding securities (including Stock Options) or (z) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii) split, combine, reclassify or otherwise amend the terms of any of its capital stock or other equity 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 any other equity interestssecurities;
(bii) issue, deliver, sell, grant, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) any shares of its capital stock or stock, any other equity interests or any securities convertible into, exchangeable for or exercisable for any such shares or other equity interests, or any rights, warrants or options to acquire, any such shares or other equity interestsshares, or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive securities (other than (x) the issuance of shares of capital stock Company Common Stock upon the exercise of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect Stock Options outstanding on the date hereof and in accordance with their terms on the date hereof, (other than y) the issuance of Class A Shares upon shares of Company Common Stock pursuant to the exercise Option Agreement or (z) the issuance of Pivotal Options, the settlement Company Common Stock pursuant to Warrants outstanding as of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPP, in each case, that are outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with their terms as in effect on such datethe date hereof), or any "phantom" stock, "phantom" stock rights, stock appreciation rights or stock based performance units;
(ciii) amend its Certificate of Incorporation or otherwise change, Bylaws or authorize other comparable charter or propose to amend or otherwise change, its certificate of incorporation or bylaws (or similar organizational documents);
(div) directly or indirectly acquire or agree to acquire (i) by merging or consolidating with, or by purchasing a substantial equity interest in or a substantial portion of the assets of, making an investment in or loan or capital contribution to or in by any other manner, any corporationPerson or division, partnership, association business or equity interest of any Person other business organization than assets which in the aggregate do not exceed $500,000 or division thereof or (ii) any assets that are otherwise material to Pivotal and its Subsidiaries, except, in each case, for (1) capital expenditures which shall be subject to the limitations of clause (i) below and (2) purchases of marketable securities by raw materials or on behalf of Pivotal or its Subsidiaries for cash management purposes supplies in the ordinary course of business consistent with Pivotal’s investment management policy, and except in the case of clause (ii), acquisitions of inventory, products or services in the ordinary course of business; Table of Contentspast practice;
(ev) directly or indirectly sell, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien or otherwise dispose in whole or in part of any of its material properties, properties or assets or rights (including securitizations), except sales of inventory in the ordinary course of business consistent with past practice and sales of goods and services not in excess of $500,000 in the aggregate;
(vi) (x) incur any material Pivotal Intellectual Property Registrations) indebtedness for borrowed money or guarantee any such indebtedness of another Person, issue or sell any debt securities or warrants or other rights to acquire any debt securities of the Company or any interest therein, except, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal and of its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Out;
(f) adopt guarantee any debt securities of another Person, enter into any "keep well" or other agreement to maintain any financial statement condition of another Person or enter into a plan any arrangement having the economic effect of complete or partial liquidationany of the foregoing, dissolution, restructuring, recapitalization or other reorganization;
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay except for short-term borrowings incurred in the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness ordinary course of business consistent with past practice or (iiy) make any loans, advances or capital contributions to, or investments in, any other Person, other than Pivotal in the ordinary course of business or to or in any direct or indirect wholly owned Subsidiary of Pivotalthe Company;
(ivii) incur make or commit agree to incur make any new capital expenditure (including leases and in-licenses), or authorization enter into any agreement or commitment with respect thereto that in the aggregate agreements providing for payments which are in excess of $1,000,000100,000 individually or $500,000 in the aggregate;
(jviii) except as required by any judgment by a court of competent jurisdiction, (iw) pay, discharge, settle or satisfy any claims, liabilities liabilities, obligations or obligations litigation (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge discharge, settlement or satisfaction in the ordinary course of businessbusiness consistent with past practice or in accordance with their terms, (B) as required by their terms as in effect on the date of this Agreement of claimsliabilities disclosed, liabilities or obligations reflected or reserved against in the most recent audited consolidated financial statements (or the notes thereto) of Pivotal the Company included in the Pivotal Filed SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements in the ordinary course of businessbusiness consistent with past practice, (iix) cancel any material Indebtedness owed indebtedness, (y) waive or assign any claims or rights of substantial value or (z) waive any benefits of, or agree to Pivotal modify in any respect (A) any standstill or similar agreements to which the Company or any of its Subsidiaries, Subsidiaries is a party or (iiiB) waive, release, grant or transfer any right of material value;
(k) (i) materially modify, materially amend, terminate, cancel, waive any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (ii) enter into any Contract that if in effect on the date hereof would be a Material Contract, other than customer contracts entered into in the ordinary course of business;
(l) commence any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal or any of its Subsidiaries), or compromise, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements in the ordinary course of business that involve only the payment of money damages not in excess of $500,000 individually or $2,000,000 in the aggregate, in any case without the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal or any of its Subsidiaries;
(m) change its financial or Tax accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law;
(n) settle or compromise any material liability for Taxes or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business, any confidentiality or similar agreements to which the Company or any of its Subsidiaries is a party;
(ix) except in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect practice, modify, amend or terminate any material contract or agreement to which the Company or any of its Tax liability; consent Subsidiaries is a party, including, without limitation, the agreements referred to any extension or waiver in Section 4.1(a)(ix) of the limitation period applicable to any claim or assessment in respect of a material amount of Taxes; grant any power of attorney with respect to material Taxes; Company Disclosure Schedule;
(x) enter into any Tax Sharing contracts, agreements, binding arrangements or understandings relating to the distribution, sale, license, marketing or manufacturing by third parties of the Company's or its Subsidiaries' products or products licensed by the Company or its Subsidiaries, other than pursuant to any such contracts, agreements, arrangements or understandings currently in place (that have been disclosed in writing to Parent prior to the date hereof) in accordance with their terms as of the date hereof;
(xi) except as otherwise set forth in this Agreement or as required to comply with applicable law, (A) adopt, enter into, terminate or amend in any closing material respect (I) any collective bargaining agreement or Benefit Plan or (II) any other similar agreement, plan or policy involving the Company or its Subsidiaries, and one or more of its current or former directors, officers, consultants, or employees, (B) except as disclosed in writing prior to the date hereof, increase in any manner the compensation, bonus or fringe or other benefits of, or pay any bonus to, any current or former officer, director or employee, other than in the case of employees who are neither current nor former officers or directors, increases made in connection with normal periodic reviews and related compensation and benefit increases which are consistent with past practice, (C) pay any benefit or amount not required under any Benefit Plan or any other benefit plan or arrangement of the Company or its Subsidiaries as in effect on the date of this Agreement, (D) increase in any manner the severance or termination pay of any current or former director, officer or employee, (E) enter into or amend any employment, deferred compensation, consulting, severance, termination or indemnification agreement, arrangement or understanding with any current or former employee, officer or director, (F) grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or Benefit Plan (including the grant of stock options, stock appreciation rights, performance units, restricted stock, "phantom" stock or other stock related awards), or remove any existing restrictions in any Benefit Plans or agreements or awards made thereunder, (G) amend or modify any Stock Option, (H) take any action to fund or in any other way secure the payment of compensation or benefits under any employee plan, agreement, contract or arrangement or Benefit Plan, (I) take any action to accelerate the vesting of payment of any compensation or benefit under any Benefit Plan;
(xii) except as otherwise set forth in this Agreement, enter into any material agreement, other than contracts for the sale of the Company's or its Subsidiaries' products in the ordinary course of business, other than pursuant to any contracts, agreements, arrangements or understandings currently in place (that have been disclosed in writing to Parent prior to the date of this Agreement);
(xiii) except as required by GAAP, make any change in accounting methods, principles or practices;
(xiv) take any action that would, or that could reasonably be expected to, result in (i) any of the representations and warranties of the Company set forth in this Agreement or the Option Agreement that are qualified by materiality becoming untrue, (ii) any of such representations and warranties that are not so qualified becoming untrue in any material respect or (iii) any of the conditions to the Merger set forth in ARTICLE VI not being satisfied;
(xv) transfer or license to any Person or otherwise extend, amend or modify any rights to the Intellectual Property Rights of the Company and its Subsidiaries other than pursuant to any contracts, agreements, arrangements or understandings currently in place (that have been disclosed in writing to Parent prior to the date of this Agreement); or
(xvi) authorize, or change commit or agree to take, any method of accounting for Tax purposes;the foregoing actions.
Appears in 1 contract
Conduct of Business. During (a) Except as expressly permitted by this Agreement or the Share Purchase Agreement (including, as contemplated by the Interim Period Development Plan or as authorized by the Management Committee (as such terms are defined in the Share Purchase Agreement)), as approved by Parent or as required by applicable Law, during the period from the date of this Agreement to until the Effective Time, except as consented to in writing in advance by VMware or as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) by this Agreement, Pivotal Company shall, and shall cause each of its Subsidiaries to, carry on (1) conduct its business in the ordinary coursecourse consistent with past practice, including its development and sales efforts as currently contemplated, and (2) use commercially reasonable efforts to (i) maintain and preserve intact its the goodwill of those having business organization, assets, rights and properties, (ii) keep available relationships with it to the services of its current officers, employees and consultants and (iii) preserve end that its goodwill and ongoing business shall be unimpaired at the Effective Time, and (3) comply in all material respects with all applicable Laws and the requirements of all licenses, Permits, leases, agreements and other instruments that are material to the Company and its relationships with customers, suppliers, licensors, licensees, distributors and others having material business dealings with itSubsidiaries taken as a whole. In addition to and without Any transaction specifically approved by Thomas E. Mara acting in his capacity as President of the Company shall xxxxxxxxxx Xxrent approval for purposes of this Section 5.2(a). Without limiting the generality of the foregoing, except as expressly permitted by this Agreement or as required by applicable Law, during the period from the date of this Agreement to the Effective Time, except (x) as set forth in section 5.1 of the Pivotal Disclosure Letter, (y) as specifically required by this Agreement or (z) as specifically required by applicable Law, Pivotal Company shall not, and shall not permit any of its Subsidiaries, without VMware’s prior written consent (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), Subsidiaries to:
(a) (i) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock or other equity interests, except for dividends by a wholly owned Subsidiary of Pivotal to Pivotal or any other wholly owned Subsidiary of Pivotal, (ii) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii) split, combine, reclassify or otherwise amend the terms of any of its capital stock or other equity 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 other equity interests;
(b) issue, deliver, sell, grant, dispose of, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) any shares of its capital stock stock, voting securities or other equity interests interests, or any securities or rights convertible into, exchangeable for or exercisable for, or evidencing the right to subscribe for any such shares of its capital stock, voting securities or other equity interests, or any rights, warrants warrants, options, calls, commitments or options any other agreements of any character to acquirepurchase or acquire any shares of its capital stock, voting securities or equity interests or any securities or rights convertible into, exchangeable or exercisable for, or evidencing the right to subscribe for, any such shares of its capital stock, voting securities or other equity interests, or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive provided that (x) the Company may issue shares of capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof (other than the issuance of Class A Shares Company Common Stock upon the exercise of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights options granted under the Pivotal ESPP, in each case, Company Stock Plans that are outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with the terms thereof and (y) capital stock, voting securities or equity interests of the Company's Subsidiaries may be issued to the Company or a direct or indirect wholly owned Subsidiary of the Company; (B) redeem, purchase or otherwise acquire any of its outstanding shares of capital stock, voting securities or equity interests, or any rights, warrants, options, calls, commitments or any other agreements of any character to acquire any shares of its capital stock, voting securities or equity interests; (C) declare, set aside for payment or pay any dividend on, or make any other distribution in respect of, any shares of its capital stock or otherwise make any payments to its stockholders in their terms capacity as in effect on such date(other than dividends by a direct or indirect wholly owned Subsidiary of the Company to its parent); (D) split, combine, subdivide or reclassify any shares of its capital stock; or (E) amend (including by reducing an exercise price or extending a term) or waive any of its rights under, or accelerate the vesting under, any provision of the Company Stock Plans or any agreement evidencing any outstanding stock option or other right to acquire capital stock of the Company or any restricted stock purchase agreement or any similar or related contract;
(c) amend or otherwise change, or authorize or propose to amend or otherwise change, its certificate of incorporation or bylaws (or similar organizational documents);
(d) directly or indirectly acquire or agree to acquire (i) by merging or consolidating with, purchasing a substantial equity interest in or a substantial portion of the assets of, making an investment in or loan or capital contribution to or in any other manner, any corporation, partnership, association or other business organization or division thereof or (ii) (A) enter into, terminate or amend any assets agreement that are otherwise is material to Pivotal the Company and its SubsidiariesSubsidiaries taken as a whole, except, in each case, for (1) capital expenditures which shall be subject to the limitations of clause (i) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes except in the ordinary course of business consistent with Pivotal’s investment management policy, and except in the case of clause (ii), acquisitions of inventory, products or services in the ordinary course of business; Table of Contents
(e) directly or indirectly sell, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien or otherwise dispose in whole or in part of any of its material properties, assets or rights (including any material Pivotal Intellectual Property Registrations) or any interest therein, except, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Out;
(f) adopt or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, other than Pivotal or any direct or indirect wholly owned Subsidiary of Pivotal;
(i) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto that in the aggregate are in excess of $1,000,000;
(j) except as required by any judgment by a court of competent jurisdiction, (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge or satisfaction in the ordinary course of businesspast practice, (B) as required by their terms as enter into or extend the term or scope of any contract or agreement that purports to restrict the Company, or any Subsidiary or Affiliate of the Company, from engaging in effect on the date any line of this Agreement of claimsbusiness or in any geographic area, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since amend or modify the date of such financial statements in the ordinary course of businessEngagement Letters, (ii) cancel any material Indebtedness owed to Pivotal or any of its Subsidiaries, or (iii) waive, release, grant or transfer any right of material value;
(k) (i) materially modify, materially amend, terminate, cancel, waive any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (iiD) enter into any Contract contract or agreement that if in effect on the date hereof would be a Material Contractbreached by, other than customer contracts entered into or require the consent of any third party in order to continue in full force following, consummation of the ordinary course of businessMerger, or (E) release any Person from, or modify or waive any provision of, any confidentiality or similar agreement;
(liii) commence make any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal or any of its Subsidiaries), or compromise, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements changes in the ordinary course of business that involve only the payment of money damages not in excess of $500,000 individually or $2,000,000 in the aggregate, in any case without the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal or any of its Subsidiaries;
(m) change its financial or Tax accounting methods, principles or practices, except insofar as may have been be required by a change in GAAP or applicable Law;
(niv) make or change any material election concerning Taxes or Tax Returns, file any amended Tax Return, enter into any closing agreement with respect to Taxes, settle any material Tax claim or assessment or surrender any right to claim a refund of Taxes or obtain any Tax ruling;
(v) adopt a plan or agreement of complete or partial liquidation, dissolution, restructuring, recapitalization, merger, consolidation or other reorganization (other than transactions exclusively between wholly owned Subsidiaries of the Company);
(vi) settle or compromise any litigation, proceeding or investigation material liability for Taxes to the Company and its Subsidiaries taken as a whole (this covenant being in addition to the Company's agreement set forth in Section 5.9); or
(vii) agree, in writing or surrender otherwise, to take any of the foregoing actions, or take any action or agree, in writing or otherwise, to take any action which would (A) cause any of the representations or warranties of the Company set forth in this Agreement (1) that are qualified as to materiality or Material Adverse Effect to be untrue or (2) that are not so qualified to be untrue in any material claim for a refund of Taxes; file any amended Tax Return respect, or claim for Tax refund; make, revoke or modify (B) in any material Tax electionrespect impede or delay the ability of the parties to satisfy any of the conditions to the Merger set forth in this Agreement.
(b) Parent agrees that, during the period from the date of this Agreement until the Effective Time, except as expressly contemplated or permitted by this Agreement or as required by applicable Law, or change unless the entity classification Company otherwise agrees in writing, Parent shall, and shall cause each of its Subsidiaries to, conduct their business in compliance in all material respects with all applicable Laws and regulations and shall use their commercially reasonable efforts to preserve intact their material business organizations and material relationships with third parties and shall not take any Subsidiary for U.S. federal tax purposes; file action or engage in any Tax Return other than in the ordinary course of business and on a basis consistent with past practice transactions that would materially and adversely affect its Tax liability; consent to in any extension material respect impede or waiver delay the ability of the limitation period applicable parties to satisfy any claim or assessment of the conditions to the Merger set forth in respect of a material amount of Taxes; grant any power of attorney with respect to material Taxes; enter into any Tax Sharing Agreement or any closing agreement or other similar agreement; or change any method of accounting for Tax purposes;this Agreement.
Appears in 1 contract
Conduct of Business. During the period Except as set forth in Schedule 5.3, from the date of this Agreement to hereof until the Effective TimeClosing Date, and except as consented to expressly contemplated in writing in advance by VMware or as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) by this Agreement, Pivotal shall, Parent will and shall will cause each of its Subsidiaries to, carry on its business in the ordinary course, including its development and sales efforts as currently contemplated, and use commercially reasonable efforts Companies to (i) preserve intact its operate the Business in all material respects in the ordinary course of business organizationconsistent with past practice (including, assetswithout limitation, rights with respect to management of inventory, collection of accounts receivable and propertiestiming of receipts, payment of accounts payable and other disbursements of cash), (ii) keep available use their reasonable best efforts to maintain the services goodwill of its current officersthe Business and the continued employment of their executives and other employees who are engaged in the Business, employees and consultants and (iii) preserve its goodwill and its preserve, in all material respects, their customary relationships with customers, suppliers, licensorsfranchisees and customers consistent with past practice (but shall not be required pursuant to this provision to settle franchisee litigation, licenseesclaims or arbitration), distributors and others having (iv) maintain in force (including necessary renewals thereof) the insurance policies referred to in Section 3.22 which are material business dealings to the Business, and to give reasonable prior notice to the Purchaser of any cancellation or expiration of any such insurance policy and to consult in good faith with itthe Purchaser as to any replacement policy. In addition to and without limiting the generality of the foregoing, during the period from From the date of this Agreement to hereof until the Effective Time, except (x) as set forth in section 5.1 of the Pivotal Disclosure Letter, (y) as specifically required by this Agreement or (z) as specifically required by applicable Law, Pivotal shall not, and shall not permit any of its SubsidiariesClosing Date, without VMware’s prior the written consent of Purchaser (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below consent shall not be unreasonably withheld) and except as expressly contemplated by this Agreement, conditioned or delayed, Parent shall not and in all other cases shall be in VMware’s sole discretion), cause the Companies not to:
(a) amend the certificate of incorporation, articles, by-laws or any other organizational document of the Companies;
(b) make or revoke any election with respect to Taxes (except for elections by which the entity classifications of the Australian weight control businesses will be changed from corporations to divisions for U.S. tax purposes), change any method of Tax accounting, settle or compromise any audit or other proceeding that may affect the post-Closing Tax liability of WWI or any Subsidiary or file any amended Tax Return for, or on behalf of, WWI or any Subsidiary, in each case, except as may be required under applicable law;
(c) issue, sell or pledge, or authorize or propose the issuance, sale or pledge of (i) declareadditional shares of common stock of the Companies, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock or other equity interestsinterest in the Companies, except for dividends by a wholly owned Subsidiary of Pivotal to Pivotal or securities convertible into any such shares or interests or any other wholly owned Subsidiary of Pivotalrights, (ii) purchase, redeem warrants or otherwise acquire shares of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights options to acquire any such shares or interests or other equity interests, other than (A) convertible securities or interests of the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, Companies or (iiiii) split, combine, reclassify or otherwise amend the terms of any of its capital stock or other equity interests or issue or authorize the issuance of any other securities in respect of, in lieu of of, or in substitution for shares of its capital stock or other equity interests;
(b) issuefor, deliver, sell, grant, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) any shares of its capital stock or other equity interests or any securities convertible into, exchangeable for or exercisable for any such shares or other equity interests, or any rights, warrants or options to acquire, any such shares or other equity interests, or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive shares of capital stock of VMware on a deferred basis or other rights linked to any of the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof (other than the issuance of Class A Shares upon the exercise of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPP, in each case, that are Companies outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with their terms as in effect on such date);
(c) amend or otherwise change, or authorize or propose to amend or otherwise change, its certificate of incorporation or bylaws (or similar organizational documents)hereof;
(d) directly redeem, purchase or indirectly otherwise acquire or agree to acquire (i) by merging or consolidating with, purchasing a substantial equity interest in or a substantial portion any outstanding shares of any of the assets ofCompanies;
(e) enter into any Contract or transaction between any of the Companies, making an investment on the one hand, and Parent or any of its Affiliates (other than the Companies), on the other hand, other than operational matters in the ordinary course of business consistent in all material respects with past practice which will not result in any continuing liability or loan obligation of the Companies after the Closing;
(f) enter into, amend or capital contribution cancel any material Real Property Lease or material Permit other than in the ordinary course of business consistent in all material respects with past practice;
(g) grant any increase in compensation to employees of the Companies or any increase in the rate of commission, bonus or other variable compensation or any increase in any other manner, direct or indirect remuneration (including benefits) payable or to become payable to any corporation, partnership, association or such employees other business organization or division thereof or (ii) any assets that are otherwise material to Pivotal and its Subsidiaries, except, in each case, for (1) capital expenditures which shall be subject to the limitations of clause (i) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes than in the ordinary course of business consistent with Pivotal’s investment management policy, and except in the case of clause (ii), acquisitions of inventory, products or services in the ordinary course of business; Table of Contents
(e) directly or indirectly sell, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien or otherwise dispose in whole or in part of any of its material properties, assets or rights (including any material Pivotal Intellectual Property Registrations) or any interest therein, except, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Out;
(f) adopt or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrationspast practice;
(h) (i) incurperform, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (ii) make any loans, advances or capital contributions agree to, or investments incommit to or permit to exist any of the acts, any other Persontransactions, other than Pivotal events or any direct or indirect wholly owned Subsidiary occurrences of Pivotal;the type described in Section 3.11 (a) through (q); or
(i) incur agree or commit to incur any capital expenditure or authorization or commitment with respect thereto that commit, whether in the aggregate are in excess of $1,000,000;
(j) except as required by any judgment by a court of competent jurisdiction, (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent writing or otherwise), other than (A) the payment, discharge or satisfaction in the ordinary course of business, (B) as required by their terms as in effect on the date of this Agreement of claims, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements in the ordinary course of business, (ii) cancel any material Indebtedness owed to Pivotal or take any of its Subsidiaries, or (iii) waive, release, grant or transfer any right of material value;
(k) (i) materially modify, materially amend, terminate, cancel, waive any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (ii) enter into any Contract that if in effect on the date hereof would be a Material Contract, other than customer contracts entered into in the ordinary course of business;
(l) commence any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal or any of its Subsidiaries), or compromise, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements in the ordinary course of business that involve only the payment of money damages not in excess of $500,000 individually or $2,000,000 in the aggregate, in any case without the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal or any of its Subsidiaries;
(m) change its financial or Tax accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law;
(n) settle or compromise any material liability for Taxes or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liability; consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of a material amount of Taxes; grant any power of attorney with respect to material Taxes; enter into any Tax Sharing Agreement or any closing agreement or other similar agreement; or change any method of accounting for Tax purposes;foregoing actions.
Appears in 1 contract
Samples: Recapitalization and Stock Purchase Agreement (Gutbusters Pty LTD)
Conduct of Business. During the period from From the date hereof until the Closing Date, the Company shall conduct its business and shall cause its Subsidiaries to conduct their respective businesses in, and only in, the ordinary course of this Agreement to the Effective Time, except as consented to in writing in advance by VMware or as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) by this Agreement, Pivotal shallbusiness and shall use, and shall cause each of its Subsidiaries toto preserve their respective present business organizations, carry on its business in the ordinary courseoperations, including its development and sales efforts as currently contemplated, and use commercially reasonable efforts to (i) preserve intact its business organization, assets, rights and properties, (ii) keep available the services of its current officers, employees and consultants and (iii) preserve its goodwill and its relationships with customers, suppliers, licensors, licensees, distributors and others having material business dealings with itthird parties. In addition to and without Without limiting the generality of the foregoing, during the period from the date hereof until the Closing Date, without the prior written consent of this Agreement to the Effective TimePurchaser (which consent shall not be unreasonably withheld or delayed), except (x) as set forth in section 5.1 of the Pivotal Disclosure Letter, (y) as specifically expressly permitted or required by this Agreement or (z) as specifically may be required by applicable Lawany Governmental Entity, Pivotal shall not, and the Company shall not or permit any of its Subsidiaries, without VMware’s prior written consent (which consent, in Subsidiaries to do the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), tofollowing:
(a) (i) declare, set aside declare or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock or other equity interests, except for dividends by a wholly owned Subsidiary of Pivotal to Pivotal or any other wholly owned Subsidiary of Pivotal, stock;
(iib) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iiii) split, combine, combine or reclassify or otherwise amend the terms of any shares of its capital stock or other equity interests or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock; (ii) directly or indirectly repurchase, redeem or otherwise acquire any shares of the capital stock of the Company, or other equity interests;
any securities convertible into or exercisable for any shares of the capital stock of the Company, or, except pursuant to the Rights Offering, grant any Person any right to acquire any shares of the capital stock of the Company; or (biii) issue, deliver, sell, grant, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions Permitted Liens) or authorize or propose the issuance, delivery, sale, pledge or encumbrance of general applicability as may be provided under or the Securities Act or imposition of any Lien (other applicable securities Lawsthan Permitted Liens) on, any shares of its capital stock or other equity interests or any securities convertible into, exchangeable for into or exercisable for any such shares or other equity interestsfor, or any rights, warrants or options to acquire, any such shares or other equity interestsshares, or enter into any stock appreciation rightsagreement with respect to any of the foregoing, “phantom” stock rightsexcept, performance unitsin the case of clause (iii), rights to receive shares of capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof (other than for the issuance of Class A Shares the Common Stock in the Subsequent Offering upon the exercise or fulfillment of Pivotal Optionsrights or options issued or existing pursuant to employee benefit plans, programs or arrangements, all to the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPP, extent outstanding and in each case, that are outstanding existence on the date of this Agreement Agreement, and Made Available to VMware and otherwise in accordance with their terms as in effect on such date)present terms;
(c) amend or otherwise change, or authorize or propose to amend or otherwise change, its certificate of incorporation incorporation, by-laws or bylaws (other similar governing documents, or, except as provided in this Agreement, enter into a plan of consolidation, merger, share exchange, reorganization or similar organizational documents)business combination with or involving any other Person, or a letter of intent or agreement in principle with respect thereto;
(d) directly except for loans or indirectly acquire or agree commitments for loans that have previously been approved by the Company prior to acquire the date of this Agreement, (i) by merging make or consolidating with, purchasing a substantial equity interest in or a substantial portion of the assets of, making an investment in or acquire any loan or capital contribution to issue a commitment for any loan except for loans and commitments that are made in the ordinary course of business and with a principal balance of US $2,000,000 or in any other mannerless, any corporation, partnership, association or other business organization or division thereof or (ii) take any assets action that are would result in any discretionary releases of collateral or guarantees or otherwise material to Pivotal restructure any loan or commitment for any loan with a principal balance in excess of US $1,000,000, (iii) incur any indebtedness for borrowed money other than deposit liabilities, Federal Home Loan Bank advances and its Subsidiaries, exceptthe FRB federal discount window and reverse repurchase agreements, in each case, for (1) capital expenditures which shall be subject to the limitations of clause (i) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes entered into in the ordinary course of business consistent with Pivotalpast practice and with a final maturity of one year or less, or (iv) guarantee or agree to guarantee, or endorse or assume responsibility for, the obligations of any Person (other than the endorsement of checks and other negotiable instruments in the normal process of collection, the issuance of standby letters of credit and trade letters of credit and reimbursement of any of its Subsidiaries’ operating expenses, including, but not limited to, tax payments and expenses related to the Transaction);
(e) change its methods of accounting in effect at December 31, 2009 except as required by changes in GAAP or regulatory accounting principles as concurred to by the Company’s investment management policyindependent auditors;
(f) except for contractual obligations existing on the date hereof as set forth in Schedule 3.3(r), and except or in the case of clause (ii)non-executive officers and other employees, acquisitions of inventory, products for increases in salary or services wages in the ordinary course of business; Table of Contents
(e) directly , or indirectly sell, lease, license, sell for payments pursuant to the Company’s severance and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien or otherwise dispose retention plans as set forth in whole or in part of any of its material properties, assets or rights (including any material Pivotal Intellectual Property Registrations) or any interest therein, except, in each case, Schedule 3.3(r): (i) salesincrease the compensation or benefits of any present or former director, pledgesofficer or employee of the Company, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Out;
establish, adopt, enter into, amend or terminate any company employment benefit plan, except as required by applicable law or as required to maintain qualification pursuant to the Code, or (fiii) adopt grant any equity or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganizationequity based awards;
(g) except for any sale, disposition or other transfer of certain real estate owned having a value of US $1,000,000 or less, sell, license, lease, encumber, assign or otherwise dispose of, or agree to sell, license, lease, encumber, assign or otherwise dispose of, or abandon or fail to maintainmaintain any of its assets, properties or other rights or agreements material to the business of the Company and its Subsidiaries, except (i) sales of loans and investment securities in the ordinary course of business, or allow (ii) pledges of assets to lapse, or abandon, including by failure to pay secure public deposits accepted in the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrationsordinary course of business;
(h) (i) incurenter into, create, assume renew, amend or otherwise become liable forterminate, fail to perform any material obligations under, waive or repayrelease any material rights under or give notice of a proposed renewal, cancelamendment, forgive waiver, release or prepaytermination of, any Indebtedness, contract agreement or amend, modify lease to which the Company is a party or refinance any Indebtedness by which the Company or (ii) its properties is bound that calls for aggregate annual payments of US $1,000,000 or more; or make any loansmaterial change in any of such contracts, advances agreements or capital contributions to, or investments in, any other Personleases, other than Pivotal or the renewal in the ordinary course of business of any direct or indirect wholly owned Subsidiary lease the term of Pivotalwhich expires prior to the Closing Date without material changes to the terms thereof;
(i) incur except pursuant to agreements or commit arrangements in effect on the date hereof and previously provided to incur the Purchaser, pay, loan or advance any capital expenditure amount to, or authorization sell, transfer or commitment with respect thereto that lease any properties or assets (real, personal or mixed, tangible or intangible) to, or enter into any agreement or arrangement with, any of its officers or directors or any of their immediate family members or any affiliates or associates (as such terms are defined under the Exchange Act) of any of its officers or directors, except for and transactions in the aggregate are in excess ordinary course of $1,000,000business based on criteria applied to and on substantially same terms as those offered to other customers of the Company and its Subsidiaries;
(j) except other than in the ordinary course of business or as required by any judgment by a court of competent jurisdictionapplicable law, (i) make any material Tax election, (ii) file any amended Tax return with respect to any material Tax, (iii) change any annual Tax accounting period, (iv) enter into any closing agreement relating to any material Tax or (v) surrender any right to claim a material Tax refund;
(k) pay, discharge, settle settle, compromise or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), including taking any action to settle or compromise any litigation, in each case, involving monetary damages in excess of US $1,000,000, other than (A) the payment, discharge discharge, settlement, compromise or satisfaction in the ordinary course of business, (Bi) as required by their terms as in effect on the date of this Agreement of claims, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements in the ordinary course of business, (ii) cancel any material Indebtedness owed with respect to Pivotal or any of its Subsidiariesthe litigation disclosed in Schedule 3.3(o), or (iii) waivein accordance with their terms of liabilities reflected or reserved against in, releaseor contemplated by, grant the most recent consolidated financial statements (or transfer the notes thereto) in the SEC Reports filed prior to the date hereof, or agree or consent to the issuance of any right of material value;
(k) (i) materially modifyinjunction, materially amenddecree, terminate, cancel, waive order or judgment restricting or otherwise affecting in any material right under manner its business or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (ii) enter into any Contract that if in effect on the date hereof would be a Material Contract, other than customer contracts entered into in the ordinary course of business;operations; and
(l) commence any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal or any of its Subsidiaries)authorize, or compromise, settle commit or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements in the ordinary course of business that involve only the payment of money damages not in excess of $500,000 individually or $2,000,000 in the aggregate, in any case without the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal or do any of its Subsidiaries;
(m) change its financial or Tax accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law;
(n) settle or compromise any material liability for Taxes or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liability; consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of a material amount of Taxes; grant any power of attorney with respect to material Taxes; enter into any Tax Sharing Agreement or any closing agreement or other similar agreement; or change any method of accounting for Tax purposes;foregoing actions.
Appears in 1 contract
Samples: Securities Purchase Agreement (Hanmi Financial Corp)
Conduct of Business. During the period from (a) The Company agrees that, between the date of this Agreement to and the Effective Time, except as consented to in writing in advance by VMware or as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (aSection 5.1(a) through (r) below) by this Agreement, Pivotal shall, and shall cause each of its Subsidiaries to, carry on its business in the ordinary course, including its development and sales efforts as currently contemplated, and use commercially reasonable efforts to (i) preserve intact its business organization, assets, rights and properties, (ii) keep available the services of its current officers, employees and consultants and (iii) preserve its goodwill and its relationships with customers, suppliers, licensors, licensees, distributors and others having material business dealings with it. In addition to and without limiting the generality of the foregoingCompany Disclosure Schedule, during the period from the date of this Agreement to the Effective Time, except (x) as set forth in section 5.1 of the Pivotal Disclosure Letter, (y) as specifically expressly required by applicable Law or required or permitted by this Agreement or (z) as specifically required by applicable Law, Pivotal shall not, and shall not permit any of its Subsidiaries, without VMware’s otherwise with the prior written consent of Parent (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below consent shall not be unreasonably withheld, conditioned or delayed), the Company will, and will cause each Company Subsidiary to, (i) conduct its business only in all the ordinary course of business consistent with past practice, (ii) use its commercially reasonable efforts to keep available the services of the current officers, employees and consultants of the Company and each Company Subsidiary and preserve the goodwill and current relationships of the Company and each Company Subsidiary with customers, suppliers and other cases Persons with which the Company or any Company Subsidiary has significant business relations and (iii) use its commercially reasonable efforts to preserve intact its business organization.
(b) Without limiting the foregoing, except as set forth in Section 5.1 of the Company Disclosure Schedule, as expressly required by applicable Law or required by this Agreement, or otherwise with the prior written consent of Parent (which consent shall not be in VMware’s sole discretionunreasonably withheld, conditioned or delayed), the Company shall not, and shall not permit any Company Subsidiary to, between the date of this Agreement and the Effective Time, directly or indirectly, do any of the following:
(ai) amend the certificate of incorporation, bylaws or other comparable charter or organizational documents (whether by merger, consolidation or otherwise) of the Company or any Company Subsidiary;
(ii) (iA) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock stock, property or propertyotherwise) in respect of, or enter into any of its agreement with respect to the voting of, any capital stock of the Company or any Company Subsidiary (other equity interests, except for than dividends and distributions by a direct or indirect wholly owned Subsidiary of Pivotal the Company to Pivotal its parent, distributions under the Company ESPP of no more than 142,000 shares and distributions resulting from the vesting or any other wholly owned Subsidiary exercise of Pivotal, (ii) purchase, redeem Company Options or otherwise acquire shares the vesting and settlement of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and Company RSUs outstanding on the date of this Agreement or as permitted by this Agreement), in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii) split, combine, combine or reclassify or otherwise amend the terms of any of its capital stock of the Company or other equity interests or any Company Subsidiary, (C) issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for for, shares of its capital stock of the Company or other equity interestsany Company Subsidiary, (D) purchase, redeem or otherwise acquire any Equity Interest in the Company or any Company Subsidiary except for acquisitions of Company Common Stock by the Company in satisfaction by holders of Company Options or Company RSUs, outstanding on the date of this Agreement, of the applicable exercise price or withholding taxes or (E) take any action that would result in any amendment, modification or change of any term of any Indebtedness of the Company or any Company Subsidiary;
(biii) (A) issue, deliver, sell, grant, pledge or otherwise encumber or pledge, transfer, subject to any Lien (other than transfer restrictions Permitted Liens) or otherwise encumber or dispose of general applicability as may be provided under any Equity Interest in the Securities Act or other applicable securities Laws) any shares of its capital stock or other equity interests Company or any securities convertible intoCompany Subsidiary, exchangeable for or exercisable for any such shares or other equity interests, or any rights, warrants or options to acquire, any such shares or other equity interests, or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive shares of capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof (other than the issuance of Class A Shares shares of Company Common Stock upon the exercise of Pivotal Options, the settlement of Pivotal Company Options and Company RSUs or the exercise of purchase rights under the Pivotal ESPP, in each case, that are outstanding on the date of this Agreement and Made Available to VMware and otherwise Agreement, in each case in accordance with their terms as in effect on such date);
(c) amend or otherwise change, or authorize or propose to amend or otherwise change, its certificate of incorporation or bylaws (or similar organizational documents);
(d) directly or indirectly acquire or agree to acquire (i) by merging or consolidating with, purchasing a substantial the applicable equity interest in or a substantial portion of the assets of, making an investment in or loan or capital contribution to or in any other manner, any corporation, partnership, association or other business organization or division thereof or (ii) any assets that are otherwise material to Pivotal and its Subsidiaries, except, in each case, for (1) capital expenditures which shall be subject to the limitations of clause (i) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes in the ordinary course of business consistent with Pivotalaward’s investment management policy, and except in the case of clause (ii), acquisitions of inventory, products or services in the ordinary course of business; Table of Contents
(e) directly or indirectly sell, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien or otherwise dispose in whole or in part of any of its material properties, assets or rights (including any material Pivotal Intellectual Property Registrations) or any interest therein, except, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Out;
(f) adopt or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, other than Pivotal or any direct or indirect wholly owned Subsidiary of Pivotal;
(i) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto that in the aggregate are in excess of $1,000,000;
(j) except as required by any judgment by a court of competent jurisdiction, (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge or satisfaction in the ordinary course of business, (B) as required by their terms as in effect on the date of this Agreement of claims, liabilities or obligations reflected or reserved against in and the most recent audited financial statements (or rights to purchase Company Common Stock under the notes thereto) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) Company ESPP or (CB) incurred since amend any term of any Equity Interest of the date of such financial statements in the ordinary course of business, (ii) cancel any material Indebtedness owed to Pivotal Company or any of its SubsidiariesCompany security (in each case, whether by merger, consolidation or (iii) waive, release, grant or transfer any right of material valueotherwise);
(kiv) (i) materially modifyadopt a plan or agreement of, materially amendor resolutions providing for or authorizing, terminatecomplete or partial liquidation, canceldissolution, waive merger, consolidation, restructuring, recapitalization or other reorganization, each with respect to the Company or any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (ii) enter into any Contract that if in effect on the date hereof would be a Material Contract, other than customer contracts entered into in the ordinary course of businessCompany Subsidiary;
(lv) commence any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal Contracts entered into, amended or any of its Subsidiaries), or compromise, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements renewed with customers and suppliers in the ordinary course of business consistent with past practice on terms that involve only are substantially similar in the payment of money damages not aggregate to the existing Company Material Contracts, (A) terminate, cancel, renew or agree to any material amendment of, material change in or material waiver under any Company Material Contract, (B) enter into any Contract that, if existing on the date hereof, would be a Company Material Contract or (C) amend any Contract in existence on the date hereof that, after giving effect to such amendment, would be a Company Material Contract;
(vi) incur any capital expenditures or any obligations or liabilities in respect thereof in excess of $500,000 individually or $2,000,000 250,000 in the aggregate, aggregate in any case without the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal or any of its Subsidiariesfiscal quarter;
(mvii) change its financial or Tax accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law;
acquire (nA) settle or compromise any material liability for Taxes business, assets or surrender capital stock of any material claim for a refund Person or division thereof, whether in whole or in part (and whether by purchase of Taxes; file any amended Tax Return or claim for Tax refund; makestock, revoke or modify any material Tax electionpurchase of assets, merger, consolidation, or change the entity classification of otherwise), or (B) acquire or license from any Subsidiary for U.S. federal tax purposes; file Person any Tax Return Intellectual Property Rights or Technology other than in the ordinary course of business and on a basis consistent with past practice;
(viii) (A) sell, lease, license, pledge, transfer, exchange, abandon, disclaim, forfeit, grant rights in or access to other Persons, subject to any Lien or otherwise dispose of any of its Intellectual Property Rights or Technology, material assets or material properties (including Company Products) except (1) pursuant to existing Contracts or commitments in effect prior to the execution of this Agreement, (2) sales of tangible Inventory or used equipment in the ordinary course of business consistent with past practice that would materially and adversely affect its Tax liability; consent or (3) Permitted Liens, (B) sell, dispose of, disclose, or license the source code for Company Proprietary Software to any extension Person (other than immaterial portions of source code of Company Proprietary Software provided pursuant to a software development kit license or waiver disclosed in connection with trials, demonstrations or similar arrangements, in each case on a non-exclusive basis, in the ordinary course of business consistent with past practice and subject to written non-disclosure and non-use restrictions imposed on and agreed to by the limitation period applicable recipient), (C) disclose any trade secrets or other proprietary and confidential information to any claim Person other than in the ordinary course of business consistent with any contractual obligations and past practice and provided such Person is subject to a confidentiality or assessment in respect of a material amount of Taxes; grant any power of attorney with respect non-disclosure agreement requiring such Person to material Taxes; maintain the confidentiality thereof or (D) enter into any Tax Sharing Agreement arrangement, the result of which is the loss, expiration or termination of any license or right under or to any Third Party Intellectual Property (excluding any licenses to commercially available “off-the-shelf” Software);
(ix) except as required by Law or to comply with any Company Employee Plan as in effect on the date of this Agreement: (A) grant to any current or former director, officer, employee or consultant of the Company or any closing agreement Company Subsidiary any (1) increase in compensation, (2) bonus or (3) other similar benefits, except for increases in the compensation or grants of bonuses in the ordinary course of business consistent with the Company’s or a Company Subsidiary’s past practices for employees below the level of Vice President or as agreed to in writing prior to the date of this Agreement and disclosed in Section 3.11(a) of the Company Disclosure Schedule, (B) grant to any current or former director, officer, employee or consultant of the Company or any Company Subsidiary any severance or termination pay or benefits or any increase in severance, change of control or termination pay or benefits, (C) except as otherwise contemplated pursuant to Section 5.10 hereof, establish, adopt, enter into or amend any Company Employee Plan (other than offer letters that contemplate “at will” employment without severance benefits) or collective bargaining agreement, in each case except as required by applicable Law, (D) take any action to amend or waive any performance or vesting criteria or accelerate any rights or benefits or take any action to fund or in any other way secure the payment of compensation or benefits under any Company Employee Plan except to the extent required pursuant to the terms as in effect as of the date of this Agreement of any Company Employee Plan disclosed in Section 3.11(a) of the Company Disclosure Schedule or applicable Law, (E) make any Person a beneficiary of any retention plan under which such Person is not as of the date of this Agreement a beneficiary which would entitle such Person to vesting, acceleration or any other right as a consequence of consummation of the transactions contemplated by this Agreement, or (F) fire or involuntary terminate any officer of the Company, other than for cause; (x) (A) write-down any of its material assets, including any capitalized Inventory or Company IP, in excess of $250,000, except for depreciation and amortization in accordance with GAAP or in accordance with the ordinary course of business consistent with past practice or (B) make any change in any method of financial accounting principles, method or practices, in each case except for Tax purposesany such change required by GAAP or applicable Law, including Regulation S-X under the Exchange Act (in each case following consultation with the Company’s independent auditor);
Appears in 1 contract
Samples: Merger Agreement (Alliance Fiber Optic Products Inc)
Conduct of Business. During The Company covenants and agrees that, during the period from the date of this Agreement to until the earlier of the Effective TimeTime and the termination of this Agreement in accordance with its terms, except as consented to unless the Purchaser shall otherwise agree in writing in advance by VMware writing, or as is otherwise expressly required permitted or prohibited (including specifically contemplated by this Agreement or the restrictions Plan of Arrangement or set forth in subclauses the Company Disclosure Letter or as is otherwise required by Applicable Law:
(a1) through (r) below) by this Agreement, Pivotal the Company shall, and shall cause each of its Subsidiaries to, carry on conduct its business and their respective businesses in the ordinary course, including its development compliance with Applicable Laws and sales efforts as currently contemplated, and use commercially reasonable efforts to (i) preserve intact its business organization, assets, rights and properties, (ii) keep available the services of its current officers, employees and consultants and (iii) preserve its goodwill and its relationships with customers, suppliers, licensors, licensees, distributors and others having material business dealings with it. In addition to and without limiting the generality of the foregoing, during the period from the date of this Agreement to the Effective Time, except (x) as set forth in section 5.1 of the Pivotal Disclosure Letter, (y) as specifically required by this Agreement or (z) as specifically required by applicable Law, Pivotal shall not, and shall not permit any of its Subsidiaries, without VMware’s prior written consent (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), to:
(a) (i) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock or other equity interests, except for dividends by a wholly owned Subsidiary of Pivotal to Pivotal or any other wholly owned Subsidiary of Pivotal, (ii) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii) split, combine, reclassify or otherwise amend the terms of any of its capital stock or other equity 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 other equity interests;
(b) issue, deliver, sell, grant, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) any shares of its capital stock or other equity interests or any securities convertible into, exchangeable for or exercisable for any such shares or other equity interests, or any rights, warrants or options to acquire, any such shares or other equity interests, or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive shares of capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof (other than the issuance of Class A Shares upon the exercise of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPP, in each case, that are outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with their terms as in effect on such date);
(c) amend or otherwise change, or authorize or propose to amend or otherwise change, its certificate of incorporation or bylaws (or similar organizational documents);
(d) directly or indirectly acquire or agree to acquire (i) by merging or consolidating with, purchasing a substantial equity interest in or a substantial portion of the assets of, making an investment in or loan or capital contribution to or in any other manner, any corporation, partnership, association or other business organization or division thereof or (ii) any assets that are otherwise material to Pivotal and its Subsidiaries, except, in each case, for (1) capital expenditures which shall be subject to the limitations of clause (i) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes in the ordinary course of business consistent with Pivotal’s investment management policypast practice except as may be required to comply with the terms of this Agreement and shall use its commercially reasonable efforts to preserve intact the present business organization of the Company and its Subsidiaries and to preserve the current relationships of the Company and its Subsidiaries with customers, suppliers, distributors, licensors, landlords, employees and other Persons with which the Company or any of its Subsidiaries has significant business relations;
(2) without limiting the generality of Section 6.1(1), and except as otherwise expressly contemplated by this Agreement, the Company shall not, directly or indirectly, and shall cause each of its Subsidiaries not to:
(a) amend its articles, charter or by-laws or other comparable organizational documents;
(b) without the consent of the Purchaser, declare, set aside or pay any dividend or other distribution or payment (whether in cash, shares or property) in respect of the Company Shares owned by any Person or the securities of any Subsidiary owned by a Person other than the Company;
(c) issue, grant, sell or pledge or agree to issue, grant, sell or pledge any shares of the Company or its Subsidiaries, or securities convertible into or exchangeable or exercisable for, or otherwise evidencing a right to acquire, shares of the Company or its Subsidiaries, other than the issuance of Company Shares issuable pursuant to the outstanding Options previously granted under the terms of the Stock Option Plan or any of the outstanding Warrants (none of which Options or Warrants have a strike price equal to or less than the Consideration);
(d) except as disclosed in the case Company Disclosure Letter and other than with respect to Permitted Liens, sell, pledge, lease, dispose of, encumber or agree to sell, pledge, lease, dispose of clause (ii), acquisitions or encumber any assets of inventory, products the Company or services of any Subsidiary other than assets with a value of less than $50,000 in the aggregate or inventory purchased or sold in the ordinary course of business; Table of Contents;
(e) directly or indirectly sellredeem, leasepurchase, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber acquire or subject offer to any Lien redeem, purchase or otherwise dispose in whole acquire any shares or in part other securities of the Company or any of its material properties, assets or rights (including any material Pivotal Intellectual Property Registrations) or any interest therein, except, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal and its Subsidiaries, taken including under any normal course issuer bid, except as a whole required by the terms thereof and (ii) Ordinary Course Licenses Outin accordance with such terms;
(f) adopt or enter into a plan amend the terms of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganizationany of its securities;
(g) fail to maintainsplit, consolidate or allow to lapse, reclassify any of the Company Shares or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property RegistrationsSubsidiary’s shares of capital stock;
(h) adopt a plan of liquidation or resolution providing for the liquidation, dissolution, merger, consolidation or reorganization of the Company or any of its Subsidiaries;
(i) incurreorganize, createamalgamate or merge the Company or any of its Subsidiaries with any other Person;
(j) reduce the capital or stated capital of the Company or any of its Subsidiaries;
(k) acquire or agree to acquire (by merger, assume amalgamation, acquisition of stock or otherwise become liable forassets or otherwise), directly or repayindirectly, cancel, forgive in one transaction or prepayseries of related transactions, any IndebtednessPerson, assets, securities, properties, interests or amendbusinesses, modify other than for greater certainty the acquisition of inventory or refinance other assets for resale or use by the Company and/or any Indebtedness of its Subsidiaries or their respective customers in connection with the ordinary course operation of their businesses;
(iil) make any loans, advances or capital contributions to, or investments in(either by purchase of shares or securities, contributions of capital or otherwise) in any other Person, other than Pivotal the Company or any direct or indirect wholly of the Company’s existing wholly-owned Subsidiary of PivotalSubsidiaries;
(im) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto that in indebtedness under the aggregate are RBC Credit Agreement (including the RBC Additional Advances) in excess of $1,000,0009,500,000 principal amount in the aggregate;
(jn) except other than pursuant to the RBC Credit Agreement (including the RBC Additional Advances), incur or commit to incur any indebtedness for borrowed money or issue any debt securities, or guarantee, endorse or otherwise as required by an accommodation become responsible for the obligations of any judgment by a court of competent jurisdictionother Person, or make any loans or advances;
(io) pay, settle, discharge, settle waive, release, compromise or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (Ai) the payment, settlement, discharge or satisfaction satisfaction, in the ordinary course of business, (B) as required by their terms as in effect on the date of this Agreement of claims, liabilities or obligations reflected or reserved against in the most recent audited financial statements (Company Financial Statements or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements in the ordinary course of business, or (ii) cancel any material Indebtedness owed to Pivotal or any of its Subsidiaries, or (iii) waive, release, grant or transfer any right of material valuethe claims that are set forth in the Company Disclosure Letter;
(kp) (i) materially modify, materially amendenter into, terminate, cancelmodify or amend, waive or breach any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (ii) submit any proposal that could lead to or enter into a Contract involving expenditures by or payments to the Company or its Subsidiaries pursuant to the terms of such Contract aggregating in excess of $50,000 per year, or fail to enforce any Contract that if in effect on the date hereof would be a breach or threatened breach of any Material Contract;
(q) amend its accounting policies or adopt new accounting policies, in each case except as required in accordance with GAAP;
(r) sell, lease or otherwise transfer, in one transaction or in a series of related transactions, any assets, securities, properties, interests or businesses, having a cost or proceeds, as applicable, on a per transaction or series of related transactions basis, in excess of $50,000, other than customer contracts entered into than, for greater certainty, the sale, lease or other use or transfer of inventories and products in the ordinary course of business;
(ls) commence except as required by Applicable Law or by the terms of the Employee Plans or Contracts in effect on the date hereof or with the prior written consent of the Purchaser: (i) increase any Legal Proceeding severance, change of control or termination pay to (or amend any existing arrangement with) any Company Employee; (ii) increase the benefits payable under any existing severance or termination pay policies with any Company Employee; (iii) increase the benefits payable under any employment agreements with any Company Employee; (iv) enter into any employment, deferred compensation or other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal similar agreement (or amend any of its Subsidiaries)such existing agreement) with any Company Employee; or (v) increase compensation, bonus levels or compromise, settle or agree other benefits payable to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements in the ordinary course of business that involve only the payment of money damages not in excess of $500,000 individually or $2,000,000 in the aggregate, in any case without the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal or any of its SubsidiariesCompany Employee;
(mt) change enter into any union recognition agreement, collective agreement or similar agreement with any trade union or representative body; (u) grant or commit to grant an exclusive licence or otherwise transfer any Intellectual Property Rights or exclusive rights in or in respect thereto that is material to the Company and its financial or Tax accounting methods, principles or practices, except insofar Subsidiaries taken as may have been required by a change in GAAP or applicable Lawwhole;
(nv) make, change or revoke any material Tax election, change any method of Tax accounting, settle or compromise any material liability for Taxes or surrender any material claim for a refund of Taxes; Tax liability, file any amended Tax Return or Return, enter into a material closing agreement, surrender any right to claim for a material Tax refund; make, revoke assign any agreement entered into with a Governmental Authority which allowed for a Tax refund or modify fail to take any material Tax electionmeasures necessary to meet the requirements for those agreements to be kept in effect, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liability; consent to any the extension or waiver of the limitation period applicable to any material Tax claim or assessment assessment;
(w) close any stores; or
(x) agree, resolve or commit to do any of the foregoing.
(3) neither the Company nor any of its Subsidiaries shall grant to any officer or director of the Company or any of its Subsidiaries an increase in compensation in any form, grant any general salary increase to any officer or director, make any loan to any officer or director of the Company or any of its Subsidiaries, increase any benefits payable to any officer or director under its current severance or termination pay policies, or adopt or materially amend or make any contribution to any Company plan or other bonus, profit sharing, option, pension, retirement, deferred compensation, insurance, incentive compensation, compensation or other similar plan, agreement, trust, fund or arrangement for the benefit of directors or officers of the Company or any of its Subsidiaries, except with the prior consent of the Purchaser;
(4) the Company shall, and shall cause each of its Subsidiaries to, use its and their commercially reasonable efforts to cause the current insurance (or re-insurance) policies maintained by the Company or any of its Subsidiaries, including directors’ and officers’ insurance, not to be cancelled or terminated or any of the coverage thereunder to lapse, unless simultaneously with such termination, cancellation or lapse, replacement policies underwritten by insurance or re-insurance companies of nationally recognized standing having comparable deductions and providing coverage equal to or greater than the coverage under the cancelled, terminated or lapsed policies for substantially similar premiums are in full force and effect; provided that none of the Company or any of its Subsidiaries shall obtain or renew any insurance (or re-insurance) policy for a term exceeding twelve (12) months;
(5) subject to compliance with applicable competition or anti-trust laws, the Company shall promptly notify the Purchaser in writing of any fact, circumstance, event or development that, to the Knowledge of the Company, is or would, individually or in the aggregate, reasonably be expected to constitute a Material Adverse Effect;
(6) the Company shall not take any action, or permit any of its Subsidiaries to take any action, that would render, or that reasonably may be expected to render, any representation or warranty made by it in this Agreement untrue or inaccurate in any material respect at any time prior to the Effective Time;
(7) the Company shall promptly notify the Purchaser orally and in writing upon becoming aware of (i) any Material Adverse Effect with respect to the Company and its Subsidiaries or (ii) any occurrence or non-occurrence of any event whose occurrence or non-occurrence is reasonably likely to cause: (A) any representation or warranty of the Company contained in this Agreement to be untrue or inaccurate in any material respect to the extent not qualified by materiality or by reference to a Material Adverse Effect or in any respect if so qualified or (B) any covenant, condition or agreement contained in this Agreement not to be complied with or satisfied in all material respects;
(8) the Company shall promptly notify the Purchaser orally and in writing of any material change in the normal course of operation consistent with past practice of the Company’s or any of its Subsidiaries’ businesses, assets or properties, and of any material governmental or third party complaints, investigations or hearings (or communications indicating that the same may be contemplated);
(9) the Company shall deliver to the Purchaser within five (5) Business Days of the date of this Agreement written confirmation from Royal Bank of Canada that, until such time as this Agreement is terminated, Royal Bank of Canada will not terminate any of its commitments under the RBC Credit Agreement and will not take any action to enforce any of its rights or remedies under or in connection with the RBC Credit Agreement solely by reason of the breach of the Tangible Net Worth Covenant set out in Section 16(cc) of the RBC Credit Agreement, which breach of covenant was referred to in the letter from Royal Bank of Canada to the Company dated May 3, 2011;
(10) the Company shall promptly notify the Purchaser orally and in writing if the Company or any guarantor of the Company’s obligations:
(a) fails to pay any debt (including any guaranty obligation) to Royal Bank of Canada (or any of its affiliates, successors or assigns) or to any other lender to the Company or an affiliate of the Company on the scheduled or original due date with respect thereto; or
(b) defaults in the observance or performance of any other agreement or condition relating to any debt referred to in Section 6.1(10)(a) or contained in any instrument or agreement evidencing or relating thereto, or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or beneficiary of such debt (or a trustee or agent on behalf of such holder or beneficiary) to (A) terminate any commitment to make advances to the Company, or (B) cause such debt to become due prior to its stated maturity (or in the case of any such debt constituting a guaranty obligation to become payable); or any such debt shall be declared to be due and payable, or required to be prepaid or redeemed, purchased or defeased, or an offer to prepay, redeem, purchase or defease such debt shall be required to be made, in each case prior to the stated maturity thereof;
(11) without limiting the generality of Section 6.1(10)(b), the Company shall promptly notify the Purchaser orally and in writing if the Royal Bank of Canada or any of its successors or assigns in respect of a material amount the RBC Credit Agreement, takes any action to accelerate payment under such debt or to enforce its security, as applicable, in respect thereto;
(12) the Company shall duly and timely make all filings and applications under Applicable Laws (including applicable Securities Laws) required to be made on the part of Taxesthe Company, including in connection with the completion of the Arrangement, take all reasonable action necessary to be in compliance with such Applicable Laws and duly and timely file all Tax Returns and pay all Taxes due and payable; grant any power of attorney with respect and
(13) the Company shall cause the Financial Advisor to material Taxes; enter into any Tax Sharing Agreement deliver the Fairness Opinion on or any closing agreement or other similar agreement; or change any method of accounting for Tax purposes;before June 3, 2011.
Appears in 1 contract
Samples: Acquisition Agreement (Big Lots Inc)
Conduct of Business. During (a) Except as set forth in Section 4.01 of the Company Disclosure Letter, contemplated, required or permitted by this Agreement, required by Law or consented to in writing by H&H Group (such consent not to be unreasonably withheld, conditioned or delayed), during the period from the date of this Agreement to the Effective Time, except as consented to in writing in advance by VMware or as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) by this Agreement, Pivotal Company shall, and shall cause each of its Subsidiaries to, carry on its business in the ordinary coursecourse and, including its development and sales efforts as currently contemplatedto the extent consistent therewith, and use commercially reasonable best efforts to (i) preserve materially intact its current business organization, assets, rights organization and properties, (ii) keep available the services of its current officers, employees and consultants and (iii) to preserve its goodwill and its relationships with significant customers, suppliers, licensors, licensees, distributors vendors and others having material significant business dealings with itthe Company or any of its Subsidiaries, in each case, consistent with past practice. In addition to and without Without limiting the generality of the foregoing, except as set forth in Section 4.01 of the Company Disclosure Letter, contemplated, required or permitted by this Agreement, required by Law or consented to in writing by H&H Group (such consent not to be unreasonably withheld, conditioned or delayed), during the period from the date of this Agreement to the Effective Time, except (x) as set forth in section 5.1 of the Pivotal Disclosure Letter, (y) as specifically required by this Agreement or (z) as specifically required by applicable Law, Pivotal Company shall not, and shall not permit any of its Subsidiaries, without VMware’s prior written consent (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), Subsidiaries to:
(a) (i) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock stock, other than dividends or other equity interests, except for dividends distributions by a direct or indirect wholly owned Subsidiary of Pivotal the Company to Pivotal or any other wholly owned Subsidiary of Pivotal, its parent;
(ii) purchasesplit, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in lieu of or in substitution for shares of its capital stock;
(iii) repurchase, redeem or otherwise acquire any shares of its capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, warrants or other rights to acquire any such shares or other equity interestsshares, other than (A) the acquisition by the Company of shares of Company Common Stock in connection with the surrender of shares of Company Common Stock by holders of Company Stock Options in order to pay the exercise price of the Company Stock Options, (B) the withholding of Class A Shares shares of Company Common Stock to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Company Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (BC) the acquisition by Pivotal the Company of Pivotal Company Stock Options or Pivotal RSUs on the date and shares of this Agreement or as permitted by this Agreement Company Restricted Stock in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii) split, combine, reclassify or otherwise amend the terms of any of its capital stock or other equity 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 other equity interests;
(biv) issue, deliver, sell, grant, pledge deliver or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) sell any shares of its capital stock or other voting securities or equity interests, any securities convertible or exchangeable into any such shares, voting securities or equity interests, any options, warrants or other rights to acquire any such shares, voting securities, equity interests or any securities convertible into, or exchangeable for or exercisable for any such shares or other equity interests, or any rights, warrants or options to acquiresecurities, any such shares or other equity interests, or any stock appreciation rights, “phantom” stock rights, stock-based performance units, any Voting Company Debt or any other rights that give any person the right to receive shares any economic interest of capital stock a nature accruing to the holders of VMware Company Common Stock, other than (A) upon the exercise or settlement of awards under the Company Stock Plan outstanding on a deferred basis the date of this Agreement, in accordance with their present terms and (B) as required to comply with any Company Benefit Plan, Company Benefit Agreement or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts written agreement as in effect on the date hereof (other than the issuance of Class A Shares upon the exercise of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPP, in each case, that are outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with their terms as in effect on such date)Agreement;
(cv) (A) amend the Company Certificate of Incorporation or otherwise change, the Company By-Laws or authorize or propose to (B) amend or otherwise change, its certificate in any material respect the comparable organizational documents of incorporation or bylaws (or similar organizational documents)any Subsidiary of the Company;
(dvi) directly merge or indirectly acquire or agree to acquire (i) by merging or consolidating consolidate with, purchasing a substantial or purchase an equity interest in or a substantial portion of the assets of, making an investment in any person or loan any division or capital contribution to business thereof, if the aggregate amount of the consideration paid or in transferred by the Company and its Subsidiaries would exceed $500,000, other than any other manner, any corporation, partnership, association such action solely between or other business organization or division thereof or (ii) any assets that are otherwise material to Pivotal among the Company and its Subsidiaries;
(vii) sell, exceptlease or otherwise dispose of any of its properties or assets (including capital stock of any Subsidiary of the Company), in each case, for other than (1A) capital expenditures which shall be subject to the limitations sales or other dispositions of clause (i) below and (2) purchases of marketable securities by inventory or on behalf of Pivotal or its Subsidiaries for cash management purposes other assets in the ordinary course of business consistent with Pivotal’s investment management policy, and except or equipment that is no longer used or useful in the case operations of clause the Company or any of its Subsidiaries, (ii), acquisitions B) the licensing or sublicensing of inventory, products or services Intellectual Property in the ordinary course of business; Table , (C) the sublease with respect to the Company’s real property located in Anderson, South Carolina, (D) the sale of Contentsthe Company’s facility in Westfield, North Carolina, which is listed for sale and (E) other sales, leases or other dispositions for aggregate consideration of $500,000 or less;
(eviii) directly or indirectly sell(A) incur any indebtedness for borrowed money (other than (1) trade indebtedness in the ordinary course of business, lease(2) the ordinary course use of the Xxxxx Fargo Line of Credit, license(3) in connection with this Agreement and the transactions contemplated hereby for those items set forth in Section 4.01(a)(viii) of the Company Disclosure Letter, sell and leaseback(4) any refinancing of the Xxxxx Fargo Line of Credit; provided, abandonthat any fees payable to Xxxxx Fargo in connection with such refinancing, allow to lapse, mortgage or otherwise encumber or subject to any Lien or otherwise dispose in whole or in part connection with the subsequent termination of the Xxxxx Fargo Line of Credit at or prior to the Merger Closing, shall not exceed thirty thousand dollars ($30,000) in the aggregate, and expenses incurred by the Company (including the fees and expenses of counsel to Xxxxx Fargo and counsel to the Company, but excluding the fees payable to Xxxxx Fargo as contemplated in the proviso in this clause) in connection with such refinancing or termination shall be reasonable and documented), issue or sell any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its material properties, assets Subsidiaries or rights (including guarantee any material Pivotal Intellectual Property Registrations) such indebtedness or any interest thereindebt securities of another person (collectively, except“Indebtedness”), other than as described in the parenthetical set forth in clause (A) above; or (B) make any loans or capital contributions to, or investments in, any other person, other than (1) to any Subsidiary of the Company, (2) pursuant to clause (vi) above or (3) in the ordinary course of business;
(ix) except (A) in the ordinary course of business for employees (other than executive officers) (for purposes of this clause (A), ordinary course of business shall include the Company-wide general wage increase anticipated to occur in fiscal year 2015 (which wage increase will not apply to executive officers) in accordance with the Company Board’s approval in December 2014), (B) as required pursuant to the terms of any Company Benefit Plan or Company Benefit Agreement or other written agreement, in each case, in effect on the date of this Agreement, (iC) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, as otherwise expressly permitted by this Agreement or encumbrances (D) as may be required to be effected prior avoid adverse treatment under Section 409A of the Code, (1) grant to any director, executive officer or employee any increase in compensation, (2) grant to any director, executive officer or employee any increase in severance or termination pay, (3) enter into any employment, consulting, severance, retention or termination agreement with any director, executive officer or employee, (4) establish, adopt, enter into or amend in any material respect any collective bargaining agreement or Company Benefit Plan or Company Benefit Agreement or (5) take any action to accelerate any rights or benefits under any Company Benefit Plan or Company Benefit Agreement; provided, however, that the Effective Time pursuant foregoing clauses (1), (2), (3) and (4) shall not restrict the Company or any of its Subsidiaries from entering into or making available to existing Contracts newly hired employees or to employees (other than executive officers) in the context of promotions based on job performance or workplace requirements, in each case, in the ordinary course of business, plans, agreements, benefits and compensation arrangements (not including any grants) that are not have a value that is consistent with the past practice of making compensation and benefits available to newly hired or promoted employees in similar positions;
(x) settle any material to Pivotal and claim or material litigation, in each case, made or pending against the Company or any of its Subsidiaries, taken other than (A) the settlement of claims or litigation in which the Company or any of its Subsidiaries is named as a whole nominal defendant, (B) the settlement of any claims or litigation involving Parent, H&H Acquisition Sub, H&H Group, Sub or any of their respective Affiliates and (iiC) Ordinary Course Licenses Outthe settlement of any other claims or litigation for an amount payable by the Company and its Subsidiaries (net of any insurance payments and any payments by other parties thereto) not in excess of $200,000;
(fxi) make any material change in accounting methods, principles or practices by the Company or any of its Subsidiaries affecting the consolidated assets, liabilities or results of operations of the Company, except as required (A) by GAAP (or any interpretation thereof), including pursuant to standards, guidelines and interpretations of the Financial Accounting Standards Board or any similar organization, or (B) by Law;
(xii) adopt or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganizationreorganization of the Company or any of its Subsidiaries (other than the dissolution of any inactive Subsidiary of the Company and reorganizations solely among Subsidiaries of the Company);
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (iixiii) make any loans, advances or capital contributions to, or investments in, any other Personmaterial tax election, other than Pivotal or any direct or indirect wholly owned Subsidiary of Pivotal;
(i) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto that in the aggregate are in excess of $1,000,000;
(j) except as required by any judgment by a court of competent jurisdiction, (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge or satisfaction in the ordinary course of business, (B) as required by their terms as in effect on the date of this Agreement of claims, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements in the ordinary course of business, (ii) cancel any material Indebtedness owed to Pivotal or any of its Subsidiaries, or (iii) waive, release, grant or transfer any right of material value;
(k) (i) materially modify, materially amend, terminate, cancel, waive any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (ii) enter into any Contract that if in effect on the date hereof would be a Material Contract, other than customer contracts entered into in the ordinary course of business;
(l) commence any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal or any of its Subsidiaries), or compromise, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements in the ordinary course of business that involve only the payment of money damages not in excess of $500,000 individually or $2,000,000 in the aggregate, in any case without the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal or any of its Subsidiaries;
(m) change its financial or Tax accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law;
(n) settle or compromise any material tax liability or refund;
(xiv) make any capital expenditures, other than (A) in accordance with the Company’s capital expenditure plan previously provided to H&H Group, and (B) otherwise in an aggregate amount for Taxes or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return all such capital expenditures made pursuant to this clause (B) not to exceed $500,000;
(xv) other than in the ordinary course of business and on a basis consistent with past practice practice, materially reduce the amount of insurance coverage or fail to renew any material existing insurance policies;
(xvi) amend in a manner that would materially and adversely affect impacts in any material respect the ability to conduct its Tax liability; consent business, terminate or allow to lapse any material permits of the Company or any Subsidiary;
(xvii) (1) cancel or permit to lapse any material Intellectual Property of the Company other than in the ordinary course of business or (2) disclose to any extension third party, other than representatives of Parent, H&H Acquisition Sub or waiver H&H Group or under a confidentiality agreement, any trade secret included in the Intellectual Property of the limitation period applicable Company in a way that results in loss of material trade secret protection; or
(xviii) authorize any of, or commit or agree to take any claim of, the foregoing actions.
(b) Neither Parent, H&H Acquisition Sub, H&H Group, Sub nor the Company shall knowingly take or assessment in respect permit any of a material amount their respective Affiliates to take any action that could reasonably be expected to prevent or materially impede, interfere with, hinder or delay the consummation of Taxes; grant any power of attorney with respect to material Taxes; enter into any Tax Sharing Agreement the Merger or any closing agreement or of the other similar agreement; or change any method of accounting for Tax purposes;transactions contemplated hereby.
Appears in 1 contract
Conduct of Business. During the period from the date of this Agreement to the Effective TimeTime or termination of this Agreement pursuant to Section 9.1 hereof, except as consented otherwise contemplated hereby or to the extent that Parent shall otherwise consent in writing in advance by VMware or as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) by this Agreementwriting, Pivotal Company shall, and shall cause each of its Subsidiaries subsidiaries to, carry on its business in all material respects in the ordinary coursecourse consistent with past practice and, including its development and sales efforts as currently contemplatedto the extent consistent therewith, and use commercially reasonable efforts to (i) preserve preserve, in all material respects, intact its current business organization, assets, rights and properties, (ii) keep available the services of its current officersofficers and employees, employees in all material respects, and consultants and (iii) preserve its goodwill and its relationships with customers, suppliers, licensors, licensees, distributors and others having material significant business dealings with it. In addition to and without Without limiting the generality of the foregoing, during the period from the date of this Agreement to the Effective Time, except (x) as set forth in section 5.1 of the Pivotal Disclosure Letter, (y) as specifically required by this Agreement or (z) as specifically required by applicable Law, Pivotal Company shall not, and shall not permit any of its Subsidiaries, without VMware’s prior written consent subsidiaries to (which consent, in the cases of the matters except as expressly permitted by this Agreement or as set forth in subclauses (e), (g), Schedule 6.1 to the Company Disclosure Schedule or to the extent that Parent shall otherwise consent in writing):
(i), (j) or (k) below shall not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), to:
(a) (iA) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock or other equity interests, except for dividends by a wholly owned Subsidiary of Pivotal to Pivotal or any other wholly owned Subsidiary of Pivotal, (ii) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interestsstock, other than (A1) the withholding dividends and distributions by a direct or indirect wholly-owned subsidiary of Class A Shares Company to satisfy tax obligations its parent, (2) contractually required distributions to partners in joint ventures, and (3) earn-out payments in connection with respect to awards granted pursuant acquisitions consummated prior to the Pivotal Stock Plans and outstanding on date hereof as set forth in Section 6.1(i) of the date of this Agreement or as permitted by this AgreementCompany Disclosure Schedule, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii) split, combine, combine or reclassify or otherwise amend the terms of any of its capital stock or other equity 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 (C) purchase, redeem or otherwise acquire any shares of its capital stock or any other equity interestssecurities thereof or any rights, warrants or options to acquire any such shares or other securities;
(bii) issue, deliver, sell, grant, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) any shares of its capital stock or stock, any other equity interests voting securities or any securities convertible into, exchangeable for or exercisable for any such shares or other equity interests, or any rights, warrants or options to acquire, any such shares shares, voting securities or other equity interests, or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive shares of capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof convertible securities (other than the issuance of Class A Shares shares of Company Common Stock upon the exercise of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPP, in each case, that are Company Stock Options outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with their terms as in effect on such datepresent terms);
(ciii) amend the Company Certificate of Incorporation or otherwise change, the Company By-laws or authorize other comparable charter or propose to amend or otherwise change, its certificate of incorporation or bylaws (or similar organizational documents);
(div) directly or indirectly acquire or agree to acquire (iA) by merging or consolidating with, or by purchasing a substantial equity interest in or a substantial portion of the assets or any stock of, making an investment in or loan or capital contribution to or in by any other manner, any business or any corporation, partnership, joint venture, association or other business organization or division thereof or (iiB) except as set forth on Schedule 6.1(iv) to Company Disclosure Schedule, any assets that are otherwise material material, individually or in the aggregate, to Pivotal and its SubsidiariesCompany, except, in each case, for (1) capital expenditures which shall be subject to the limitations of clause (i) below and (2) except purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes supplies and inventory in the ordinary course of business consistent with Pivotal’s investment management policy, and except in the case of clause (ii), acquisitions of inventory, products or services in the ordinary course of business; Table of Contentspast practice;
(ev) directly or indirectly sell, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien or otherwise dispose in whole or in part of any of its material propertiesproperties or assets, assets except sales of inventory or rights (including any material Pivotal Intellectual Property Registrations) sales or any interest therein, exceptlicenses of immaterial assets, in each casecase in the ordinary course of business consistent with past practice and except for sales of assets for consideration that does not exceed, (i) salesindividually or in the aggregate, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Out$1,000,000;
(fvi) adopt (A) incur or suffer to exist any new indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or warrants or other rights to acquire any debt securities of Company or any of its subsidiaries, guarantee any debt securities of another person, enter into any "keep well" or other agreement to maintain any financial statement condition of another person or enter into a plan any arrangement having the economic effect of complete or partial liquidationany of the foregoing, dissolution, restructuring, recapitalization or other reorganization;
(g) fail to maintainexcept for short-term borrowings incurred in the ordinary course of business consistent with past practice, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (iiB) make any loans, advances (other than to employees of Company in the ordinary course of business) or capital contributions to, or investments in, any other Personperson, other than Pivotal or any direct or indirect wholly owned Subsidiary of Pivotalexcept as permitted by Section 6.1(iv);
(ivii) incur except as set forth on Schedule 6.1(vii) to the Company Disclosure Schedule, make or commit agree to incur make any capital expenditure or authorization or commitment expenditures with respect thereto that to property, plant or equipment except in the ordinary course of business and except for any capital expenditure that, individually, is in excess of $200,000 or, in the aggregate for the Company and such subsidiaries with respect to all capital expenditures after the date hereof, are in excess of $1,000,0001,500,000;
(jviii) except as required by make any judgment by a court of competent jurisdictionmaterial tax election or settle or compromise any material income tax liability or make any change in accounting methods, principles or practices;
(iix) pay, discharge, settle or satisfy any material claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), (other than (A) the payment, discharge or satisfaction satisfaction, in the ordinary course of businessbusiness consistent with past practice or in accordance with their terms, (B) as required by their terms as in effect on the date of this Agreement of claims, liabilities or obligations reflected or reserved against in in, or contemplated by, the most recent audited consolidated financial statements (or the notes thereto) of Pivotal Company included in the Pivotal Filed Company SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements in the ordinary course of business, (ii) cancel any material Indebtedness owed to Pivotal or any of its Subsidiaries, or (iii) waive, release, grant or transfer any right of material value;
(k) (i) materially modify, materially amend, terminate, cancel, waive any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (ii) enter into any Contract that if in effect on the date hereof would be a Material Contract, other than customer contracts entered into in the ordinary course of business;
(l) commence any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal or any of its Subsidiaries), or compromise, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements thereafter in the ordinary course of business that involve only consistent with past practice and other than settlements or compromises of claims, liabilities or obligations not involving any obligation of the Company other than the payment of money damages where the amount paid or to be paid in settlement or compromise does not exceed $500,000, provided that the aggregate amount paid in excess connection with the settlement or compromise of all such matters shall not exceed $500,000 individually or $2,000,000 in the aggregate, in any case without the imposition of any equitable relief on1,000,000), or the admission of wrongdoing by, Pivotal or any of its Subsidiaries;
(m) change its financial or Tax accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law;
(n) settle or compromise waive any material liability for Taxes or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liability; consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of a material amount of Taxes; grant any power of attorney with respect to material Taxes; enter into any Tax Sharing Agreement or any closing agreement or other similar agreement; or change any method of accounting for Tax purposes;benefits of,
Appears in 1 contract
Samples: Merger Agreement (Urs Corp /New/)
Conduct of Business. During the period from the date of this Agreement to the Effective Time, except as consented to in writing in advance by VMware or as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) Except as required by applicable Law or expressly required by this Agreement, Pivotal shall, and shall cause each of its Subsidiaries to, carry on its business Agreement or as described in the ordinary course, including its development and sales efforts as currently contemplated, and use commercially reasonable efforts to (iSection 5.1(a) preserve intact its business organization, assets, rights and properties, (ii) keep available the services of its current officers, employees and consultants and (iii) preserve its goodwill and its relationships with customers, suppliers, licensors, licensees, distributors and others having material business dealings with it. In addition to and without limiting the generality of the foregoingCompany Disclosure Letter, during the period from the date of this Agreement to until the Effective TimeTime (or such earlier date on which this Agreement is terminated pursuant to Section 7.1), except unless Parent otherwise consents in writing (x) as set forth which consent shall not be unreasonably withheld, delayed or conditioned), the Company shall, and shall cause each of its Subsidiaries to carry on its business in section 5.1 all material respects in the ordinary course consistent with past practice. To the extent consistent with the foregoing, the Company shall, and shall cause its Subsidiaries to, use its and their commercially reasonable efforts to preserve its and each of its Subsidiaries’ business organizations intact and maintain existing relations with key customers, suppliers, distributors, employees and other Persons with whom the Company or its Subsidiaries have business relationships, assets, rights and properties. Without limiting the generality of the Pivotal Disclosure Letterforegoing, (y) and except as specifically required by applicable Law or as expressly required by this Agreement or (zas described in Section 5.1(a) as specifically required by applicable Lawof the Company Disclosure Letter, Pivotal during such period, the Company shall not, and shall not permit any of its SubsidiariesSubsidiaries to, without VMware’s prior written consent unless Parent otherwise consents in writing (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below consent shall not be unreasonably withheld, conditioned delayed or delayed, and in all other cases shall be in VMware’s sole discretion), to:conditioned):
(a) (i) declare(A) issue, set aside sell or pay grant any dividends onshares of its capital stock or other equity or voting interest, or make any other distributions (whether in cashsecurities or rights convertible into, exchangeable or exercisable for, or evidencing the right to subscribe for any shares of its capital stock or property) in respect ofother equity or voting interest, or any rights, warrants or options to purchase any shares of its capital stock or other equity or voting interest, or any securities or rights convertible into, exchangeable or exercisable for, or evidencing the right to subscribe for, any of its capital stock or other equity interestsor voting interest; provided that the Company may issue shares of Company Common Stock as required to be issued upon exercise or settlement of Options or other equity rights or obligations under the Company Stock Plans outstanding on the date hereof in accordance with the terms of the applicable Company Stock Plan in effect on the date hereof; (B) redeem, except for dividends by a wholly owned Subsidiary of Pivotal to Pivotal or any other wholly owned Subsidiary of Pivotal, (ii) purchase, redeem purchase or otherwise acquire any of its outstanding shares of capital stock or other equity interests of Pivotal or its Subsidiaries voting interest, or any optionsrights, warrants, warrants or rights options to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii) split, combine, reclassify or otherwise amend the terms of any of its capital stock or other equity 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 other equity interests;
(b) issue, deliver, sell, grant, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) any shares of its capital stock or other equity interests or voting interest, except (x) pursuant to written commitments in effect as of the date hereof only from former employees or directors in connection with any termination of services to the Company or any securities convertible intoof its Subsidiaries or (y) in connection with withholding to satisfy Tax obligations with respect to Options or Restricted Stock Units, exchangeable acquisitions in connection with the forfeiture of equity awards under the Company Stock Plans, or acquisitions in connection with the net exercise of Options; (C) establish a record date for, declare, set aside for payment or exercisable for pay any such dividend on, or make any other distribution in respect of, any shares of its capital stock or other equity interestsor voting interest; or (D) split, combine, subdivide or reclassify any rights, warrants or options to acquire, any such shares of its capital stock or other equity interestsor voting interest, it being understood that nothing in this Section 5.1(a)(i) shall restrict or otherwise impact the Company’s ability to adopt a rights agreement, “poison pill” or similar agreement or plan, provided that any such agreement or plan shall not be applicable to the Merger;
(ii) enter into any collective bargaining agreement or similar agreement with a labor union or works council;
(iii) (A) incur, issue, modify, renew, syndicate or refinance any Indebtedness, except (x) any obligations for the deferred purchase price of property, goods or services to any Person incurred in connection with any acquisition permitted pursuant to Section 5.1(a)(vii), (y) capital contributions pursuant to any limited partnership agreements to which the Company or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive shares Subsidiary is a party as of capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof (other than the issuance of Class A Shares upon the exercise of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPP, in each case, that are outstanding on the date of this Agreement or as allowed to be entered into, or (z) minority investments not to exceed $2,000,000, individually, or $10,000,000, in the aggregate, (B) enter into any swap or hedging transaction or other derivative agreements other than in the ordinary course of business or (C) make any loans, capital contributions or advances to any Person (other than the Company and Made Available to VMware and otherwise in accordance with their terms as in effect on such dateany wholly-owned Subsidiary of the Company);
(civ) amend adopt or otherwise changeimplement any stockholder rights plan, or authorize or propose to amend or otherwise change, its certificate of incorporation or bylaws (“poison pill” or similar organizational documents)arrangement or plan that is applicable to the Merger;
(dv) directly sell or indirectly acquire lease, in a single transaction or agree to acquire (i) by merging series of related transactions, any of its properties or consolidating withassets whose value or purchase price, purchasing a substantial equity interest in or a substantial portion of the assets of, making an investment in or loan or capital contribution to individually or in any other mannerthe aggregate, any corporationexceeds $10,000,000, partnershipexcept (A) dispositions of obsolete or worthless assets, association or other business organization or division thereof (B) transfers among the Company and its Subsidiaries or (iiC) any assets that are otherwise material to Pivotal and its Subsidiaries, except, in each case, for the ordinary course of business;
(1vi) make or authorize capital expenditures which shall be subject except (x) as budgeted in the Company’s current plan approved by the Company Board that was made available to the limitations of clause Parent, (iy) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes in the ordinary course of business consistent with Pivotal’s investment management policypast practice, and except or (z) such expenditures as do not exceed $2,000,000, individually, or $10,000,000, in the case aggregate;
(vii) make any acquisition (including by merger) of clause (ii)the capital stock or, acquisitions of inventory, products or services except in the ordinary course of business; Table , a material portion of Contents
(e) directly or indirectly sell, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien or otherwise dispose in whole or in part the assets of any of its material properties, assets or rights (including any material Pivotal Intellectual Property Registrations) or any interest therein, except, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Out;
(f) adopt or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, other than Pivotal or any direct or indirect wholly owned Subsidiary of Pivotal;
(i) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto that in the aggregate are each case for consideration in excess of $1,000,0005,000,000, individually, or $15,000,000, in the aggregate;
(jviii) except (A) increase the compensation or benefits in respect of, any of its directors or executive officers, other than as required by the terms of any judgment Company Plan or as required by a court of competent jurisdictionapplicable Law, (iB) payincrease the salaries, discharge, settle wages or satisfy any claims, liabilities benefits of employees who are not executive officers or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise)directors of the Company, other than (x) as required by the terms of any Company Plan, (y) as required by applicable Law, (z) in the ordinary course of business and consistent with past practice, or (aa) as the Company deems in its reasonable discretion to be necessary in order to compensate such employee at a level consistent with market practice, up to an aggregate of $250,000, (C) enter into any severance, change-in-control, retention, employment or other agreement with any employee, director or independent contractor, (D) establish, adopt, terminate or amend any Company Plan or any plan, program, arrangement, practice or agreement that would be a Company Plan if it were in existence on the date hereof, other than as required by Law; (E) take any action to fund the payment of compensation or benefits under any Company Plan (unless required by the terms of any Company Plan); (F) exercise any discretion to accelerate the vesting or payment or any compensation or benefit under any Company Plan; or (G) extend an offer of employment to, or hire, any candidate for a senior vice president or more senior position, or any employee with an annual base salary in excess of $175,000; provided that the foregoing shall not restrict the Company or any of its Subsidiaries from entering into or making available to newly hired employees or to employees in the context of promotions based on job performance or workplace requirements (in each case in the ordinary course of business consistent with past practice) plans, agreements, benefits and compensation arrangements that have a value that is consistent with the past practice of making compensation and benefits available to newly hired or promoted employees in similar positions;
(ix) make any material changes in financial accounting methods, principles or practices (or change an annual accounting period), except insofar as may be required by applicable Law, including without limitation a change in GAAP;
(x) (A) modify, amend, terminate or waive in a manner that is adverse to the payment, discharge or satisfaction Company any rights under any material provision of a Material Contract other than in the ordinary course of business, (B) enter into any Contract, which if entered into prior to the date hereof would have been a Material Contract, other than in the ordinary course of business or (C) enter into any new Contract that contains a change in control provision in favor of the other party or parties thereto or would otherwise require a payment to or give rise to any rights to such other party or parties in connection with the transactions contemplated hereby (except as required by their terms as set forth in effect on Section 5.1(a)(vii));
(xi) amend the Company Charter Documents or organizational documents of any Subsidiary, other than (A) Subsidiaries acquired after the date of this Agreement of claimsor (B) in accordance with Section 5.1(a)(xiii), liabilities and it being understood that nothing in this Section 5.1(a)(xi) shall restrict or obligations reflected otherwise impact the Company’s ability to adopt a rights agreement, “poison pill” or reserved against in the most recent audited financial statements (similar agreement or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed prior plan, provided that any such agreement or plan shall not be applicable to the date hereof Merger;
(for amounts not xii) fail to make any material filing, pay any fee, or take another action necessary to maintain in full force and effect any Intellectual Property right owned by the Company or any Subsidiary that is material to the conduct of the business of the Company or any Subsidiary, or enter into any license or transfer agreement granting or transferring to a third party an exclusive right to use any such Intellectual Property;
(xiii) adopt a plan or agreement of complete or partial liquidation or dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than among wholly-owned Subsidiaries);
(xiv) grant (A) any Lien (other than Permitted Liens) in any of its material assets, or (B) any Encumbrance (other than Permitted Encumbrances) in any of the Company Real Property;
(xv) fail to use its commercially reasonable efforts to maintain in full force and effect the existing insurance policies or to replace such insurance policies with comparable insurance policies covering the Company, its Subsidiaries and their respective properties, assets and businesses;
(xvi) pay, discharge, settle or compromise any pending or threatened suit, action or claim which (A) requires payment to or by the Company or any Subsidiary of the Company (exclusive of attorney’s fees) in excess of such reserves) $5,000,000 in any single instance or (C) incurred since the date in excess of such financial statements $10,000,000 in the ordinary course of businessaggregate, (iiB) cancel any material Indebtedness owed to Pivotal involves injunctive or equitable relief or restrictions on the business activities of the Company or any of its Subsidiaries, or (iiiC) waive, release, grant involves the issuance of Company Securities or transfer equity or voting interests in any right Subsidiary of material valuethe Company;
(kxvii) except as required by Law, (ia) materially modify, materially amend, terminate, cancel, waive make any material change (or file a request to make any such change) in any method of Tax accounting or any annual Tax accounting period; (b) make, change or rescind any material Tax election; (c) settle or compromise any material Tax liability, audit claim or assessment; (d) intentionally surrender any right under or extend to claim for a material Tax refund; (e) file any Material Contract amended Tax Return (other than renewals to correct an identified error); (f) enter into any closing agreement or (g) waive or extend the statute of Contracts with customers limitations in respect of Pivotal Products any income or other material Taxes other than pursuant to extensions of time to file Tax Returns obtained in the ordinary course of business) or (ii) enter into any Contract that if in effect on the date hereof would be a Material Contract, other than customer contracts entered into in the ordinary course of business;; or
(lxviii) commence authorize any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal or any of its Subsidiaries)of, or compromise, settle commit or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements in the ordinary course of business that involve only the payment of money damages not in excess of $500,000 individually or $2,000,000 in the aggregateagree, in writing or otherwise, to take any case without of, the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal or any of its Subsidiaries;
(m) change its financial or Tax accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law;
(n) settle or compromise any material liability for Taxes or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liability; consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of a material amount of Taxes; grant any power of attorney with respect to material Taxes; enter into any Tax Sharing Agreement or any closing agreement or other similar agreement; or change any method of accounting for Tax purposes;foregoing actions.
Appears in 1 contract
Conduct of Business. (a) During the period from the date of this Agreement to hereof until the Effective Time, except as consented to required by applicable Law, as contemplated, required or permitted by this Agreement or as described in Section 5.01(a) of the Company Disclosure Letter, unless Parent otherwise consents in writing in advance by VMware (such consent not to be unreasonably withheld, delayed or as otherwise expressly required or prohibited (including by conditioned), the restrictions set forth in subclauses (a) through (r) below) by this Agreement, Pivotal Company shall, and shall cause each of its Subsidiaries to, carry on its business in all material respects in the ordinary coursecourse of business. To the extent consistent with the foregoing, including its development and sales efforts as currently contemplatedthe Company shall, and shall cause its Subsidiaries to, use its and their commercially reasonable efforts to (i) preserve intact its business organization, assets, rights and properties, (ii) keep available the services each of its current officers, employees Subsidiaries’ business organizations substantially intact and consultants and (iii) preserve its goodwill and its relationships existing relations with key customers, suppliers, licensorsdistributors, licenseespartners, distributors employees, Governmental Authorities and others having material other persons with whom the Company or its Subsidiaries have significant business dealings relationships, in each case, consistent with itpast practice. In addition to and without Without limiting the generality of the foregoing, during the period from the date of this Agreement to the Effective Time, and except (x) as set forth in section 5.1 of the Pivotal Disclosure Letter, (y) as specifically required by this Agreement or (z) as specifically required by applicable Law, Pivotal as contemplated, required or permitted by this Agreement or as described in Section 5.01(a) of the Company Disclosure Letter, during such period, unless Parent otherwise consents in writing (such consent not to be unreasonably withheld, delayed or conditioned), the Company shall not, and shall not permit any of its Subsidiaries, without VMware’s prior written consent (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), Subsidiaries to:
(a) (i) declare, set aside amend the Company Certificate or pay the Company Bylaws or amend in any dividends on, or make material respect the comparable organizational documents of any other distributions (whether in cash, stock or property) in respect of, any of its capital stock or other equity interests, except for dividends by a wholly owned Subsidiary of Pivotal to Pivotal or any other wholly owned Subsidiary of Pivotal, the Company;
(ii) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii) split, combine, reclassify or otherwise amend the terms of any of its capital stock or other equity 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 other equity interests;
(b) issue, deliver, sell, grant, pledge or otherwise deliver, pledge, transfer, encumber or subject to any Lien (other than authorize the issuance, sale, grant, delivery, pledge, transfer restrictions or encumbrance by the Company of general applicability as may be provided under the Securities Act or other applicable securities Laws) any shares of its capital stock or other equity interests or voting interests, or any securities or rights convertible into, exchangeable for or exercisable for, or evidencing the right to subscribe for any such shares of its capital stock or other equity or voting interests, or any rights, calls, warrants, restricted securities, right to acquire or options to purchase any shares of its capital stock or other equity or voting interests, except for any issuance, sale or grant (1) between or among the Company and its Subsidiaries or (2) required pursuant to the exercise or settlement of Company Equity Awards, ESPP Purchase Rights or other equity awards or obligations under the Company Plans outstanding on the date hereof in accordance with the terms of the applicable Company Plan in effect on the date hereof or granted after the date hereof not in violation of this Agreement, (B) redeem, purchase or otherwise acquire any of its outstanding shares of capital stock or other equity or voting interests, or any rights, warrants or options to acquire, acquire any such shares of its capital stock or other equity or voting interests, except (x) pursuant to written commitments in effect as of the date hereof with former directors or employees in connection with the termination of their services to the Company or any of its Subsidiaries or (y) in connection with the satisfaction of Tax withholding obligations with respect to Company Equity Awards, ESPP Purchase Rights or other equity awards, acquisitions by the Company in connection with the forfeiture of such equity awards, or acquisitions by the Company in connection with the net exercise of Company Stock Options, (C) in the case of the Company, establish a record date for, declare, accrue, set aside for payment or pay any dividend on, or make any other distribution in respect of, any shares of its capital stock appreciation rightsor other equity or voting interests or (D) split, combine, subdivide or reclassify any shares of its capital stock or other equity or voting interests;
(iii) (A) incur or guarantee any Indebtedness or enter into any “keep well” or other Contract to maintain any financial statement condition of another person, except for (1) Indebtedness, guarantees, “phantomkeep well” stock rights, performance units, rights to receive shares of capital stock of VMware on a deferred basis or other rights linked Contracts between or among any of the Company and any of its Subsidiaries, (2) letters of credit issued in the ordinary course of business) and (3) Indebtedness incurred under the Credit Agreements (including in respect of letters of credit), or (B) make any loans, capital contributions or advances to any person, other than to the value Company or any Subsidiary of Class A Shares the Company;
(iv) adopt or Class B Sharesimplement any stockholder rights plan or similar arrangement;
(v) other than with respect to Intellectual Property, including sell, lease, license or otherwise transfer to any person, in a single transaction or series of related transactions, material properties or assets, except (A) dispositions of obsolete, worn out or surplus assets or assets that are no longer used or useful in the conduct of the business of the Company or any of its Subsidiaries, (B) transfers between or among the Company and its Subsidiaries, (C) pursuant to existing Contracts as in effect on the date hereof or (D) in the ordinary course of business (which for the avoidance of doubt shall include (i) leases, subleases or licenses of immaterial portions of Owned Real Property or Leased Real Property in the ordinary course of business and (ii) sales or other dispositions of supplies, inventory, merchandise or products in the ordinary course of business);
(vi) sell, transfer, license, encumber, abandon, cancel, permit to lapse or otherwise dispose of any Intellectual Property owned by the Company or any of its Subsidiaries except grant non-exclusive licenses (without any right to sublicense) of such Intellectual Property in the ordinary course of business;
(vii) make or authorize capital expenditures, except (A) in an aggregate amount not to exceed the aggregate amount budgeted in the Company’s capital expense budget approved by its Board of Directors that was made available to Parent prior to the date of this Agreement (the “Capital Expense Budget”) and (B) capital expenditures in excess of the aggregate amount budgeted in the Capital Expense Budget not exceeding $1 million in the aggregate during any fiscal quarter;
(viii) make any acquisition of any business (whether by merger, sale of stock, sale of assets or otherwise), except in the ordinary course of business (which for the avoidance of doubt shall include acquisitions of supplies, inventory, merchandise or products in the ordinary course of business);
(A) grant to any director, officer or employee any increase in compensation (except that the Company: (1) may provide increases in compensation or benefits to employees at the director level and below in the ordinary course of business and (2) may make annual or quarterly bonus payments and sales commission payments in the ordinary course of business pursuant to the terms of a Company Plan in effect on the date hereof, (B) grant to any director, officer or employee any increase in severance, change-in-control, retention or termination pay (other than in connection with promotions in the issuance ordinary course of Class A Shares upon business), (C) enter into any employment or consulting agreement with any director, officer or employee, (D) except as permitted under clause (B), establish, adopt, enter into, terminate or amend any collective bargaining agreement or Company Plan (or any plan, program, arrangement, practice or agreement that would be a Company Plan if it were in existence on the exercise date hereof) other than amendments that do not materially increase the cost of Pivotal Optionsmaintaining such Company Plan, (E) take any action to accelerate any compensation, rights or benefits under any Company Plan, fund or in any other way secure the settlement payment of Pivotal RSUs any compensation, rights or benefits under any Company Plan, or amend or waive any vesting criteria under any Company Plan, (F) materially change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan that is required by applicable Law to be funded or change the manner in which contributions to such plans are made or the exercise basis on which such contributions are determined, except as may be required by GAAP or applicable Law, (G) forgive any loans to any director, officer or employee, or (H) hire any employee above the director level or engage any independent contractor or consultant (who is a natural person) with annual fees in excess of purchase rights under $250,000, except, in the Pivotal ESPPcase of each of clauses (A) through (H), as required pursuant to the terms of any Company Plan in effect on the date hereof; provided, however, that the foregoing shall not restrict the Company or any of its Subsidiaries from (i) entering into or making available to newly hired employees or to employees in the context of promotions based on job performance or workplace requirements, in each case, in the ordinary course of business, plans, agreements, benefits and compensation arrangements that have a value that is consistent with the past practice of making compensation and benefits available to newly hired or promoted employees in similar positions and (ii) providing newly hired employees with cash-based awards of up to $25,000 per employee for employees below the director level and up to $50,000 per employee for employees at the director level, in amounts and with vesting schedules and other material terms that are outstanding on consistent with those of the date equity awards historically granted to similarly situated newly hired employees of this Agreement and Made Available to VMware and otherwise the Company or its Subsidiaries in accordance the ordinary course of business; provided that the consummation of the Transactions shall not, either alone or in combination with their terms as in effect on another event, accelerate the time of payment or vesting of such datecash-based awards);
(cx) amend make any material change in (A) its financial accounting methods, principles or otherwise changepolicies materially affecting the consolidated assets, liabilities or authorize or propose to amend or otherwise change, its certificate results of incorporation or bylaws (or similar organizational documents);
(d) directly or indirectly acquire or agree to acquire (i) by merging or consolidating with, purchasing a substantial equity interest in or a substantial portion operations of the assets of, making an investment in or loan or capital contribution to or in any other manner, any corporation, partnership, association or other business organization or division thereof or (ii) any assets that are otherwise material to Pivotal Company and its Subsidiaries, exceptexcept as may be required by a change in GAAP or (B) its policies regarding inventory, sales or receivables, except in each case, for (1) capital expenditures which shall be subject to the limitations case of this clause (iB) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes in the ordinary course of business consistent with Pivotal’s investment management policy, and except in the case of clause (ii), acquisitions of inventory, products or services in the ordinary course of business; Table of Contents
(e) directly or indirectly sell, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien or otherwise dispose in whole or in part of any of its material properties, assets or rights (including any material Pivotal Intellectual Property Registrations) or any interest therein, except, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Outpast practice;
(fxi) adopt or enter into a plan or agreement of complete or partial liquidationliquidation or dissolution, dissolutionmerger, consolidation, restructuring, recapitalization or other reorganization;
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay reorganization of the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, other than Pivotal or any direct or indirect wholly owned Subsidiary of Pivotal;
(i) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto that in the aggregate are in excess of $1,000,000;
(j) except as required by any judgment by a court of competent jurisdiction, (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge or satisfaction in the ordinary course of business, (B) as required by their terms as in effect on the date of this Agreement of claims, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements in the ordinary course of business, (ii) cancel any material Indebtedness owed to Pivotal Company or any of its Subsidiaries;
(xii) grant any Lien, or other than Permitted Liens, on any of its material assets other than to secure Indebtedness permitted under Section 5.01(a)(iii);
(iiixiii) waivesettle, release, grant waive or transfer compromise any right pending or threatened Action, other than Actions (A) relating to a breach of material valuethis Agreement or (B) pursuant to a settlement that does not relate to any of the Transactions and that results solely in a monetary obligation involving only the payment of monies by the Company or any of its Subsidiaries in settlement or compromise of amounts that do not, individually or in the aggregate, exceed $500,000 (inclusive of insurance proceeds);
(kxiv) other than as required by applicable Law, (iA) materially modifymake any change (or file a request to make any such change) in any method of Tax accounting, materially amend, terminate, cancel, waive any annual Tax accounting period or any material right under Tax election, (B) file any material amendment to any Tax Return, (C) settle or extend compromise any Material Contract claim or assessment in respect of material Taxes, (D) surrender any claim for a refund of material Taxes, (E) enter into any closing agreement relating to material Taxes, (F) file any material Tax Return that is inconsistent with past practice, (G) consent to any extension or waiver of the limitations period applicable to any Tax claim or assessment in respect of material Taxes (in each case of clauses (A) through (G), other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (iiH) enter into take any Contract that if in effect on the date hereof would be a Material Contract, action (other than customer contracts entered into in the ordinary course of business;
(l) commence any Legal Proceeding (other than which would reasonably be expected to result in a Legal Proceeding as a result material increase in the Tax liability of a Legal Proceeding commenced against Pivotal the Company or any of its Subsidiaries), or compromise, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements in the ordinary course of business that involve only the payment of money damages not in excess of $500,000 individually or $2,000,000 in the aggregateor, in any case without the imposition respect of any equitable relief ontaxable period (or portion thereof) ending after the Closing Date, the Tax liability of Parent or the admission of wrongdoing by, Pivotal or any of its SubsidiariesCompany;
(mxv) change its financial form any Subsidiary or Tax accounting methodsenter into any joint venture, principles partnership, limited liability corporation or practices, except insofar as may have been required by a change in GAAP or applicable Lawsimilar arrangement;
(nxvi) settle amend or compromise modify in any material liability for Taxes or surrender respect any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; makeMaterial Contract, revoke or modify any material Tax election, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis consistent with past practice practice; or
(xvii) authorize any of, or commit or agree, in writing or otherwise, to take any of, the foregoing actions.
(b) Neither Parent nor Merger Sub shall knowingly take or permit any of their respective Affiliates to take any action that would materially and adversely affect its Tax liability; consent could reasonably be expected to prevent or to impede, interfere with, hinder or delay in any extension or waiver material respect the consummation of the limitation period applicable Transactions.
(c) Nothing contained in this Agreement is intended to any claim give Parent, directly or assessment indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time, and nothing contained in respect this Agreement is intended to give the Company, directly or indirectly, the right to control or direct Parent’s or its Subsidiaries’ operations. Prior to the Effective Time, each of a material amount Parent and the Company shall exercise, consistent with the terms and conditions of Taxes; grant any power of attorney with respect to material Taxes; enter into any Tax Sharing Agreement or any closing agreement or other similar agreement; or change any method of accounting for Tax purposes;this Agreement, complete control and supervision over its and its Subsidiaries’ respective operations.
Appears in 1 contract
Conduct of Business. During the period from the date of this Agreement to the Effective Time, except (a) Except as consented to set forth in writing in advance by VMware Schedule 6.1(a) or as otherwise expressly required or prohibited (including permitted by the restrictions set forth in subclauses (a) through (r) below) by terms of this Agreement, Pivotal shall, and shall cause each of its Subsidiaries to, carry on its business in the ordinary course, including its development and sales efforts as currently contemplated, and use commercially reasonable efforts to (i) preserve intact its business organization, assets, rights and properties, (ii) keep available the services of its current officers, employees and consultants and (iii) preserve its goodwill and its relationships with customers, suppliers, licensors, licensees, distributors and others having material business dealings with it. In addition to and without limiting the generality of the foregoing, during the period from the date of this Agreement to the Effective Timeearlier of (i) the Closing Date and (ii) the termination of this Agreement in accordance with Article IX, except each of the Company and the Parent shall, and the Company shall cause the Company Subsidiaries to, conduct their respective business and operations in the ordinary course of business consistent with past practices and, to the extent consistent therewith, use commercially reasonable efforts to preserve intact their respective businesses, to retain the services of their respective executive officers and key employees and to preserve their respective existing business relationships with material customers and suppliers; provided, however, that in the case of the retention of executive officers and key employees of the Company or any Company Subsidiary and the preservation of their existing business relationships, none of the Company, the Company Subsidiaries or the Securityholders shall be required to make any payments outside of the ordinary course and consistent with past practice, and the Securityholders shall not be obligated to, directly or indirectly, provide any funds to the Company or any Company Subsidiary.
(xb) Except as set forth in section 5.1 Schedule 6.1(b) or as otherwise expressly permitted by the terms of this Agreement, during the Pivotal Disclosure Letter, (y) as specifically required by period from the date of this Agreement or to the earlier of (zi) as specifically required by applicable Lawthe Closing Date and (ii) the termination of this Agreement in accordance with Article IX, Pivotal the Company shall not, and the Company shall not permit any Company Subsidiary to, undertake any of its Subsidiariesthe following actions, without VMware’s the prior written consent of the other party (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below consent shall not be unreasonably withheld, conditioned withheld or delayed, and in all other cases shall be in VMware’s sole discretion), to:):
(a) (i) declareissue, set aside sell or pay any dividends onpledge, or make any other distributions authorize or propose the issuance, sale or pledge of (whether in cash, stock or propertyA) in respect of, any of its capital stock or other equity interests, except for dividends by a wholly owned Subsidiary of Pivotal to Pivotal or any other wholly owned Subsidiary of Pivotal, (ii) purchase, redeem or otherwise acquire additional shares of capital stock or other equity interests of Pivotal or its Subsidiaries any class of the Company or any options, warrantsCompany Subsidiary, or rights securities convertible into or exchangeable for any such shares, or any rights, warrants or options to acquire any such shares or other equity interests, other than (A) convertible securities of the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement Company or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and any Company Subsidiary or (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii) split, combine, reclassify or otherwise amend the terms of any of its capital stock or other equity interests or issue or authorize the issuance of any other securities in respect of, in lieu of of, or in substitution for shares of its capital stock of the Company or other equity interestsany Company Subsidiary outstanding on the date hereof;
(bii) redeem, purchase or otherwise acquire any outstanding shares of the capital stock of the Company or any Company Subsidiary;
(iii) adopt any amendment to the certificate of incorporation or by-laws of the Company or any Company Subsidiary;
(iv) incur any Indebtedness, other than in the ordinary course consistent with past borrowings and other performance bonds or letters of credit entered into in the ordinary course of business (for purposes of clarification, any borrowings or repayments with respect to the Revolving Credit Facility in the ordinary course of business and consistent with past practices shall not be deemed a breach of this covenant);
(v) (A) increase in any material manner the rate or terms of compensation or benefits of any of its directors or senior officers except as may be required under existing employment agreements or such increases as are granted in the ordinary course of business consistent with past practices, or (B) pay or agree to pay any pension, retirement allowance or other employee benefit not contemplated by any Company Benefit Plan to any director, officer or employee, whether past or present, other than in the ordinary course of business consistent with past practices, or (C) enter into, adopt or amend any employment, bonus, severance or retirement Contract or adopt any employee benefit plan, other than in the ordinary course of business consistent with past practices or as required by Law, including without limitation Section 409A of the Code;
(A) except in the ordinary course of business consistent with past practice, sell, lease, transfer or otherwise dispose of, any of its material property or assets or (B) create any Encumbrance (other than a Permitted Encumbrance) on any material property or assets;
(vii) make any loans, advances or capital contributions, except advances for travel and other normal business expenses to officers and employees in the ordinary course of business consistent with past practices;
(viii) except as contemplated by Section 7.13, acquire any business or Person, by merger or consolidation, purchase of substantial assets or equity interests, or by any other manner, in a single transaction or a series of related transactions;
(ix) make any change in any method of accounting other than those required by GAAP;
(x) enter into, amend or modify any Material Contracts (including any modification of the Target 1 Asset Purchase Agreement or the Target 2 LOI) other than in the ordinary course of business consistent with past practices;
(xi) make any capital expenditures, other than capital expenditures in an aggregate amount not to exceed $2,000,000 over the 2008 capital expenditure budget;
(xii) declare, pay or otherwise make any dividend or distribution (in cash or in any other form) to the Securityholders or otherwise make any cash payments or withdrawals of cash from the Company or any Company Subsidiary other than in the ordinary course of business consistent with past practices (for purposes of clarification, any borrowings or repayments with respect to the Revolving Credit Facility in the ordinary course of business and consistent with past practices shall not be deemed a breach of this covenant);
(xiii) accelerate the collection of or discount any accounts receivable, delay the payment of accounts payable or defer or reduce inventories, except in the ordinary course of business consistent with past practice;
(xiv) prepay any Indebtedness other than scheduled payments of principal and interest in accordance with the terms of such Indebtedness and payments in the ordinary course of business consistent with past practice (for purposes of clarification, any borrowings or repayments with respect to the Revolving Credit Facility in the ordinary course of business and consistent with past practices shall not be deemed a breach of this covenant); or
(xv) authorize, propose or agree in writing to take any of the foregoing actions.
(c) Except as set forth in Schedule 6.1(c) or as otherwise expressly permitted or contemplated by the terms of this Agreement, during the period from the date of this Agreement to the earlier of (i) the Closing Date and (ii) the termination of this Agreement in accordance with Article IX, the Parent shall not, and the Parent shall not permit either of the Merger Subs to, undertake any of the following actions, without the prior written consent of the other party (which consent shall not be unreasonably withheld or delayed):
(i) issue, deliversell or pledge, sellor authorize or propose the issuance, grant, sale or pledge or otherwise encumber or subject to any Lien of (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities LawsA) any additional shares of its capital stock of any class of the Parent or other equity interests the Merger Subs, or any securities convertible into, into or exchangeable for or exercisable for any such shares or other equity interestsshares, or any rights, warrants or options to acquire, acquire any such shares or other equity interestsconvertible securities of the Parent or the Merger Subs or (B) any other securities in respect of, in lieu of, or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive in substitution for shares of capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof (other than the issuance of Class A Shares upon the exercise of Pivotal Options, the settlement of Pivotal RSUs Parent or the exercise of purchase rights under the Pivotal ESPP, in each case, that are Merger Subs outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with their terms as in effect on such date)hereof;
(cii) amend redeem, purchase or otherwise change, acquire any outstanding shares of the capital stock of the Parent or authorize or propose the Merger Subs;
(iii) adopt any amendment to amend or otherwise change, its the certificate of incorporation or bylaws (by-laws of the Parent or similar organizational documents)the Merger Subs;
(div) directly incur any Indebtedness;
(v) (A) increase in any manner the rate or indirectly acquire terms of compensation or benefits of any of its directors, or senior officers except as may be required under existing employment agreements, or (B) pay or agree to acquire pay any pension, retirement allowance or other employee benefit not contemplated by any benefit plan to any director, officer or employee, whether past or present, or (iC) enter into, adopt or amend any employment, bonus, severance or retirement Contract or adopt any employee benefit plan, other than as required by merging or consolidating withlaw, purchasing a substantial equity interest in or a substantial portion including without limitation Section 409A of the assets Code;
(vi) (A) sell, lease, transfer or otherwise dispose of, making an investment in any of its material property or loan assets or (B) create any Encumbrance (other than a Permitted Encumbrance) on any property or assets;
(vii) make any loans, advances or capital contribution contributions, except advances for travel and other normal business expenses to or in any other manner, any corporation, partnership, association or other business organization or division thereof or (ii) any assets that are otherwise material to Pivotal officers and its Subsidiaries, except, in each case, for (1) capital expenditures which shall be subject to the limitations of clause (i) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes employees in the ordinary course of business consistent with Pivotal’s investment management policy, and except in the case of clause (ii), acquisitions of inventory, products or services in the ordinary course of business; Table of Contents
(e) directly or indirectly sell, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien or otherwise dispose in whole or in part of any of its material properties, assets or rights (including any material Pivotal Intellectual Property Registrations) or any interest therein, except, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Outpast practices;
(fviii) adopt acquire any business or enter into Person, by merger or consolidation, purchase of substantial assets or equity interests, or by any other manner, in a plan single transaction or a series of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganizationrelated transactions;
(gix) fail to maintain, or allow to lapse, or abandon, including by failure to pay the required fees make any change in any jurisdiction, any material Pivotal Intellectual Property Registrationsmethod of accounting other than those required by GAAP;
(hx) (i) incurenter into, create, assume amend or otherwise become liable for, or repay, cancel, forgive or prepay, modify any Indebtedness, or amend, modify or refinance any Indebtedness or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, Contract other than Pivotal or any direct or indirect wholly owned Subsidiary Contracts which do not require payment by Parent of Pivotal;
(i) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto that in the aggregate are consideration in excess of $1,000,00025,000 or Contracts with financial, legal, accounting, tax and other professional advisors;
(jxi) except as required by make any judgment by a court of competent jurisdiction, (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge or satisfaction in the ordinary course of business, (B) as required by their terms as in effect on the date of this Agreement of claims, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements in the ordinary course of business, (ii) cancel any material Indebtedness owed to Pivotal or any of its Subsidiaries, or (iii) waive, release, grant or transfer any right of material valuecapital expenditures;
(kxii) declare, pay or otherwise make any dividend or distribution (i) materially modify, materially amend, terminate, cancel, waive in cash or in any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of businessform) or (ii) enter into otherwise make any Contract that if in effect on cash payments or withdrawals of cash from the date hereof would be a Material Contract, other than customer contracts entered into in the ordinary course of business;
(l) commence any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal or any of its Subsidiaries), or compromise, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements in the ordinary course of business that involve only the payment of money damages not in excess of $500,000 individually or $2,000,000 in the aggregate, in any case without the imposition of any equitable relief on, Parent or the admission of wrongdoing by, Pivotal or any of its Subsidiaries;
(m) change its financial or Tax accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law;
(n) settle or compromise any material liability for Taxes or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return Merger Subs other than in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liabilitypractices; consent or
(xiii) authorize, propose or agree in writing to take any extension or waiver of the limitation period applicable to any claim or assessment in respect of a material amount of Taxes; grant any power of attorney with respect to material Taxes; enter into any Tax Sharing Agreement or any closing agreement or other similar agreement; or change any method of accounting for Tax purposes;foregoing actions.
Appears in 1 contract
Conduct of Business. (a) During the period from the date hereof until the Closing or earlier valid termination of this Agreement to the Effective TimeAgreement, except as consented to in writing in advance by VMware or as (w) otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) contemplated by this Agreement, Pivotal shall, and shall cause each of its Subsidiaries to, carry on its business in the ordinary course, including its development and sales efforts as currently contemplated, and use commercially reasonable efforts to (i) preserve intact its business organization, assets, rights and properties, (ii) keep available the services of its current officers, employees and consultants and (iii) preserve its goodwill and its relationships with customers, suppliers, licensors, licensees, distributors and others having material business dealings with it. In addition to and without limiting the generality of the foregoing, during the period from the date of this Agreement to the Effective Time, except (x) as set forth in section 5.1 of the Pivotal Disclosure Letterprohibited or required by, or necessary to comply with, Law, (y) as specifically required by this Agreement Bank reasonably determines in good faith is necessary or appropriate in respect of any Contagion Event or (z) as specifically required otherwise authorized by applicable Law, Pivotal shall not, and shall not permit any of its Subsidiaries, without VMware’s prior the written consent of Purchaser (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below consent shall not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), toBank will not:
(ai) fail to use commercially reasonable efforts to operate in the ordinary course of business in all material respects (it being understood and agreed that no act or omission by Bank with respect to the matters specifically addressed by Section 7.01(a)(ii)–(xxi) shall be deemed to be a breach of this Section 7.01(a)(i));
(ii) (iA) declarechange, set aside amend or pay waive any dividends onprovision of Bank’s organizational documents, (B) change the number of authorized or make issued shares of Bank Common Stock or authorize or issue any other distributions equity securities of Bank, (whether in cashC) issue, stock sell or property) in respect of, otherwise permit to become outstanding any additional shares of its capital stock the Bank Common Stock or other equity interestssecurities of Bank or securities convertible or exchangeable into, except for dividends by a wholly owned Subsidiary of Pivotal to Pivotal or exercisable for, any other wholly owned Subsidiary of Pivotal, (ii) purchase, redeem or otherwise acquire shares of capital stock the Bank Common Stock or other equity interests securities of Pivotal or its Subsidiaries Bank or any options, warrants, or other rights of any kind to acquire any such shares of Bank Common Stock or other equity interestssecurities of Bank, (D) issue or grant any right to, make any equity grant or equity-based award of, or split, combine or reclassify, any shares of Bank Common Stock or other than (A) the withholding equity securities of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this AgreementBank, or (iii) split, combine, reclassify or otherwise amend the terms of any of its capital stock or other equity 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 other equity interests;
(b) issue, deliver, sell, grant, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) any shares of its capital stock or other equity interests or any securities convertible into, exchangeable for or exercisable for any such shares or other equity interests, or any rights, warrants or options to acquire, any such shares or other equity interests, or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive shares of capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof (other than the issuance of Class A Shares upon the exercise of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPP, in each case, that are outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with their terms as in effect on such date);
(c) amend or otherwise change, or authorize or propose to amend or otherwise change, its certificate of incorporation or bylaws (or similar organizational documents);
(dE) directly or indirectly acquire redeem, purchase or agree to acquire (i) by merging or consolidating withotherwise acquire, purchasing a substantial equity interest in or a substantial portion any shares of the assets of, making an investment in or loan or capital contribution to or in any other manner, any corporation, partnership, association Bank Common Stock or other business organization or division thereof or (ii) any assets that are otherwise material to Pivotal and its Subsidiaries, except, in each case, for (1) capital expenditures which shall be subject to the limitations equity securities of clause (i) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes in the ordinary course of business consistent with Pivotal’s investment management policy, and except in the case of clause (ii), acquisitions of inventory, products or services in the ordinary course of business; Table of Contents
(e) directly or indirectly sell, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien or otherwise dispose in whole or in part of any of its material properties, assets or rights (including any material Pivotal Intellectual Property Registrations) Bank or any interest therein, except, in each case, securities or obligations convertible (iwhether currently convertible or convertible only after the passage of time or the occurrence of certain events) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, into or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Outexchangeable for any shares of Bank Common Stock or other equity securities of Bank;
(fiii) adopt or enter into a plan of complete or partial liquidation, restructuring, recapitalization, dissolution, restructuring, recapitalization restructuring or other reorganizationreorganization of Bank;
(giv) fail to maintainenter into, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amendrenew, modify or refinance amend in any Indebtedness material respect or (ii) make terminate any loans, advances Contract that is a Material Contract or capital contributions to, or investments in, any other Person, other than Pivotal or any direct or indirect wholly owned Subsidiary would be a Material Contract if entered into prior to the date of Pivotal;
(i) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto that in the aggregate are in excess of $1,000,000;
(j) except as required by any judgment by a court of competent jurisdiction, (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise)this Agreement, other than (A) the payment, discharge or satisfaction in the ordinary course of business, (B) as required by their renewals in accordance with the applicable terms as in effect of such Contract or under which the financial obligations of Bank are less than one hundred and five percent (105%) of the financial obligations of Bank under such Contract on the date of this Agreement of claimshereof, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since modifications, amendments and terminations that Bank does not reasonably expect will materially reduce the date expected business or economic benefits to, or impose additional material obligations on, Bank under such Contract or (D) automatic terminations in accordance with the applicable terms of such financial statements in the ordinary course of business, (ii) cancel any material Indebtedness owed to Pivotal or any of its Subsidiaries, or (iii) waive, release, grant or transfer any right of material valueContract;
(kv) (i) materially modifysell, materially amendtransfer, terminate, cancel, waive license or otherwise dispose of any material right under property or extend any Material Contract asset of Bank (other than renewals of Contracts Intellectual Property) with customers of Pivotal Products in the ordinary course of business) or (ii) enter into any Contract that if in effect on the date hereof would be a Material Contract, other value greater than customer contracts entered into in the ordinary course of business;
(l) commence any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal or any of its Subsidiaries), or compromise, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements in the ordinary course of business that involve only the payment of money damages not in excess of $500,000 250,000 individually or $2,000,000 5,000,000 in the aggregate, in any case without the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal or any of its Subsidiaries;
(m) change its financial or Tax accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law;
(n) settle or compromise any material liability for Taxes or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis or as contemplated by the Annual Budget;
(vi) sell, transfer, license, let lapse, abandon, or otherwise dispose of any material Bank Intellectual Property, other than non-exclusive licenses granted by Bank in the ordinary course of business consistent with past practice practice;
(vii) subject any assets of Bank to a Lien, other than in (x) connection with deposits, repurchase agreements, bankers acceptances, “treasury tax and loan” accounts established in the ordinary course of business and transactions in “federal funds” or (y) the ordinary course of business consistent with past practice;
(viii) merge or consolidate with any other Person;
(ix) acquire any material assets or make any material investment, whether by purchase of stock or securities, contributions to capital, property transfers, or purchase of any property or assets of any other Person;
(x) incur any liability for borrowed money (or guarantee any indebtedness for borrowed money) in excess of $250,000 individually or $1,500,000 in the aggregate, or assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other Person (it being understood and agreed that the foregoing does not relate to accepting deposits), in each case, other than in the ordinary course of business or as contemplated by the Annual Budget;
(xi) sell or securitize Loans (A) from the date hereof until December 31, 2021, with a value greater than $100,000 individually or $250,000,000 in the aggregate, other than as contemplated by the Annual Budget and (B) from January 1, 2022, until the Closing, other than as required pursuant to the terms of a Material Contract;
(xii) other than as contemplated by the Annual Budget or as required by any Bank Employee Plan set forth on Section 5.14(a) of the Bank and Seller Disclosure Schedule, (A) increase, grant or provide any severance or termination payments or benefits to any employee of Bank, (B) increase the base salary or wage rate, grant any retention, change in control, transaction or other bonus or similar awards, or make any new equity awards to, any employee of Bank, (C) hire any employee or engage any independent contractor (who is a natural person) with an annual target cash compensation greater than $115,000, (D) terminate the employment of any Key Employee (other than for cause) or otherwise implement a layoff or other reduction in force of Bank employees that would materially trigger any obligation under the WARN Act (other than pursuant to Section 7.09(a)), (E) accelerate the payment or vesting of amounts payable under any Bank Employee Plan or (F) amend or modify in any material respect (including changing the eligibility or participation terms thereof) or terminate any existing Bank Employee Plan or adopt or enter into any new arrangement that would be a Bank Employee Plan if in effect on the date hereof;
(xiii) voluntarily recognize any union or other employee representative body;
(xiv) settle or compromise any Action, or release, dismiss or otherwise dispose of any claim, liability, obligation or arbitration, other than settlements or compromises or releases, dismissals or dispositions that (A) involve solely the payment prior to the Measurement Time of consideration in an amount not in excess of $100,000 individually and adversely affect (B) do not include any admission of guilt or wrongdoing by Bank;
(xv) enter into any new line of business outside of its Tax liability; consent existing business or offer any new products outside of its existing product line (provided that the foregoing shall not restrict or limit alterations, modifications or other changes to existing products that do not change the nature and classification of such product);
(xvi) increase the pricing terms of any extension deposit account of Bank, or waiver alter the mix of the limitation period applicable to any claim or assessment in respect of a material amount of Taxes; grant any power of attorney rate, products, terms and account types with respect to Deposit Liabilities, other than ordinary course changes in response to changes in the market for similar Deposit Liabilities;
(xvii) open or accept any new deposits instruments with a term of greater than eighteen (18) months;
(xviii) materially alter any of its policies or practices with respect to (A) lending, investment, underwriting, risk and asset liability management and other banking, operating and servicing and (B) the rates, fees, interest, charges, levels or types of services or products available to customers of Bank (other than ordinary course changes to its policies or practices in response to changes in the market for similar items), in each case, from those in effect on the date of this Agreement;
(xix) make or authorize any capital expenditures, except for (x) as contemplated by the Annual Budget or (y) unbudgeted capital expenditures in an amount not to exceed $250,000 individually or $1,500,000 in the aggregate (capital expenditures contemplated in the foregoing clause (x) shall not count towards such amount in this clause (y));
(xx) (A) make or rescind any material Taxeselection relating to Taxes of Bank in a manner that is inconsistent with past practice or (B) make any material change Bank’s method of accounting, keeping of books of account, accounting practices, or material method of Tax accounting, other than as required by GAAP (without regard to any optional early adoption date); enter into or
(xxi) agree to take or make any Tax Sharing commitment to take any of the actions prohibited by this Section 7.01(a).
(b) Other than Purchaser’s right to consent or withhold consent with respect to the foregoing matters, prior to the Closing, nothing contained in this Agreement shall give Purchaser or any closing agreement of its Affiliates, directly or other similar agreement; indirectly, the right to control or change direct Seller’s or any method of accounting for Tax purposes;its Affiliates’ (including Bank’s) business, conduct or operations. Prior to the Closing, each of Seller and Bank shall exercise, subject to the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ respective business, conduct and operations, as applicable.
(c) Notwithstanding anything herein to the contrary, nothing herein shall restrict, limit or prevent Seller or Bank from taking, or refraining from taking, any and all actions, whether or not in the ordinary course of business, if such action (or inaction) has been requested or required by (or is necessary to comply with the request or a requirement of) a Governmental Authority.
Appears in 1 contract
Conduct of Business. During the period from From the date of this Agreement to through the Effective Timeearlier of the Closing or the termination of this Agreement in accordance with its terms, except as consented to in writing in advance by VMware or as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) by this Agreement, Pivotal Company shall, and shall cause each of its the Company Subsidiaries to, carry on except as contemplated by this Agreement or as consented to by Acquiror in writing (which consent shall not be unreasonably conditioned, withheld, delayed or denied), operate its business in the ordinary course, including its development and sales efforts as currently contemplated, and use commercially reasonable efforts to (i) preserve intact its business organization, assets, rights and properties, (ii) keep available the services of its current officers, employees and consultants and (iii) preserve its goodwill and its relationships with customers, suppliers, licensors, licensees, distributors and others having material business dealings with it. In addition to and without Without limiting the generality of the foregoing, during the period from the date of this Agreement to the Effective Time, except (x) as set forth in section 5.1 of the Pivotal Disclosure Letter, (y) as specifically required otherwise contemplated by this Agreement or any of the Transaction Documents, as set forth on Schedule 6.1 or as consented to by Acquiror in writing (z) as specifically required by applicable Lawwhich consent shall not be unreasonably conditioned, Pivotal withheld, delayed or denied), the Company shall not, and the Company shall cause the Company Subsidiaries not permit any of its Subsidiariesto, without VMware’s prior written consent (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), toexcept as otherwise contemplated by this Agreement:
(a) (i) declarechange or amend the articles of incorporation, set aside bylaws or pay any dividends on, other Organizational Documents of the Company or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock or other equity intereststhe Company Subsidiaries, except for dividends as otherwise required by a wholly owned Subsidiary of Pivotal to Pivotal or any other wholly owned Subsidiary of PivotalLaw, (ii) purchasesplit, redeem combine or reclassify any of the Equity Interests of the Company or any of the Company Subsidiaries, or (iii) issue, sale or dispose of any Equity Interests, or grant options, warrants or other rights to purchase or obtain any Equity Interests (whether upon conversion, exchange or exercise) of the Company or any of the Company Subsidiaries;
(b) make or declare any non-cash dividend or non-cash distribution to the stockholders of the Company in their capacities as stockholders;
(c) materially modify or terminate (excluding any expiration in accordance with its terms) any Contract of a type required to be listed on Schedule 4.11(a) or Real Property Lease, except in the ordinary course of business;
(d) sell, assign, transfer, convey, lease or otherwise acquire shares dispose of capital stock any material tangible assets or other equity interests properties of Pivotal the Company and the Company Subsidiaries, taken as a whole, except in the ordinary course of business;
(e) except (i) as otherwise required by Law, (ii) pursuant to existing Company Benefit Plans, policies or its Subsidiaries Contracts of the Company or any options, warrants, or rights to acquire any such shares or other equity interests, other than (A) of the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding Company Subsidiaries in effect on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, any Change in accordance with their terms on the date of this Agreement, Control Payments or (iii) splitin the ordinary course of business or as required by Law, combine, reclassify grant any severance or otherwise amend material termination pay that will become due and payable after the terms of any of its capital stock or other equity 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 other equity interestsClosing Date;
(bf) issuemake any change in the key management structure of the Company or any of the Company Subsidiaries, deliverincluding the hiring of additional officers or the termination of existing officers, sell, grant, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions for cause or in the ordinary course of general applicability as may be provided under the Securities Act or other applicable securities Laws) any shares of its capital stock or other equity interests or any securities convertible into, exchangeable for or exercisable for any such shares or other equity interests, or any rights, warrants or options to acquire, any such shares or other equity interests, or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive shares of capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof (other than the issuance of Class A Shares upon the exercise of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPP, in each case, that are outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with their terms as in effect on such date)business;
(cg) except (i) as otherwise required by Law or (ii) in the ordinary course of business, adopt, enter into or amend or otherwise change, or authorize or propose to amend or otherwise change, its certificate of incorporation or bylaws (or similar organizational documents)any Company Benefit Plan;
(dh) directly acquire by merger or indirectly acquire or agree to acquire (i) by merging or consolidating consolidation with, purchasing a substantial equity interest in or a substantial portion merge or consolidate with, or purchase substantially all of the assets of, making an investment in or loan or capital contribution to or in any other manner, any corporation, partnership, association association, joint venture or other business organization or division thereof or (ii) any assets that are otherwise material to Pivotal and its Subsidiaries, except, in each case, for (1) capital expenditures which shall be subject to the limitations of clause thereof;
(i) below enter into any new commitments to make any capital expenditures in excess of $100,000 individually;
(j) make any loans or material advances to any Person, except for advances to employees or officers of the Company or any of the Company Subsidiaries in the ordinary course of business;
(k) except as required by Law, make or change any material Tax election or adopt or change any material Tax accounting method;
(l) assign, transfer, license or abandon any material Intellectual Property owned by the Company or any of the Company Subsidiaries, except in the ordinary course of business;
(m) enter into any agreement that restricts the ability of the Company or any of the Company Subsidiaries to engage or compete in any line of business, or enter into any agreement that restricts the ability of the Company or any of the Company Subsidiaries to enter a new line of business;
(n) enter into, renew or amend in any respect any Affiliate Agreement (other than renewals in the ordinary course of the Company’s and the Company Subsidiaries’ director and officer liability insurance policy);
(2o) purchases of marketable securities by waive, settle or on behalf of Pivotal satisfy any material claim (which shall include, but not be limited to, any pending or its Subsidiaries for cash management purposes threatened material Action), other than in the ordinary course of business consistent with Pivotal’s investment management policy, and except in the case or that otherwise do not exceed $100,000 individually (net of clause (iiinsurance recoveries), acquisitions of inventory, products or services in the ordinary course of business; Table of Contents
(e) directly or indirectly sell, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien or otherwise dispose in whole or in part of any of its material properties, assets or rights (including any material Pivotal Intellectual Property Registrations) or any interest therein, except, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Out;
(fp) incur or guarantee any indebtedness for borrowed money other than in connection with borrowings and extensions of credit under the Company’s Credit Documents;
(q) subject any of the properties or assets of the Company and the Company Subsidiaries, to any Lien, except for Permitted Liens;
(r) adopt or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay reorganization of the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, other than Pivotal or any direct or indirect wholly owned Subsidiary of Pivotal;
(i) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto that in the aggregate are in excess of $1,000,000;
(j) except as required by any judgment by a court of competent jurisdiction, (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge or satisfaction in the ordinary course of business, (B) as required by their terms as in effect on the date of this Agreement of claims, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements in the ordinary course of business, (ii) cancel any material Indebtedness owed to Pivotal Company or any of its Subsidiaries, or (iii) waive, release, grant or transfer any right of material value;
(k) (i) materially modify, materially amend, terminate, cancel, waive any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (ii) enter into any Contract that if in effect on the date hereof would be a Material Contract, other than customer contracts entered into in the ordinary course of business;
(l) commence any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal or any of its Subsidiaries), or compromise, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements in the ordinary course of business that involve only the payment of money damages not in excess of $500,000 individually or $2,000,000 in the aggregate, in any case without the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal or any of its Company Subsidiaries;
(ms) make any change its in financial or Tax accounting methods, principles or practicespractices affecting the reported consolidated assets, liabilities or results of operations of the Company and the Company Subsidiaries, except insofar as may have been required by a change in GAAP or applicable Law;
(nt) settle write up, write down or compromise any material liability for Taxes or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change write off the entity classification book value of any Subsidiary for U.S. federal tax purposes; file any Tax Return of its assets, other than (i) in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liabilityor (ii) as may be required by GAAP; consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of a material amount of Taxes; grant any power of attorney with respect to material Taxes; or
(u) enter into any Tax Sharing agreement to do any action prohibited under this Section 6.1. Notwithstanding anything in this Agreement to the contrary, prior to Closing, Acquiror shall not interfere with or control, or attempt to interfere with or control, the Company’s or any closing agreement of the Company Subsidiaries’ conduct of business in the ordinary course and in no event shall the Company or other similar agreement; any Company Subsidiary be deemed in breach of this Section 6.1 arising from any making or change failure to make any method of accounting for Tax purposes;capital expenditure.
Appears in 1 contract
Conduct of Business. During Except with the period prior written consent of Parent (which will not be unreasonably withheld) or as expressly permitted by the terms of this Agreement, from the date of this Agreement hereof to the Effective Time, except as consented to in writing in advance by VMware or as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) by this Agreement, Pivotal Company shall, and shall cause each of its Subsidiaries to, carry on (i) conduct its business businesses in the ordinary course, including its development Ordinary Course of Business and sales efforts as currently contemplated, in accordance with all applicable Laws and (ii) use commercially reasonable efforts to (i) preserve intact its current business organization, assetskeep its physical assets in good working condition, rights preserve, maintain the value of, renew, extend and propertieskeep in full force and effect all Intellectual Property Rights, (ii) keep available the services of its current officers, officers and employees and consultants and (iii) preserve its goodwill and its relationships with customers, suppliers, licensors, licensees, distributors and others having material business dealings with it. In addition to and without Without limiting the generality of the foregoing, during except as expressly permitted by the period from the date terms of this Agreement to Agreement, the Effective Time, except (x) as set forth in section 5.1 of the Pivotal Disclosure Letter, (y) as specifically required by this Agreement or (z) as specifically required by applicable Law, Pivotal Company shall not, not and shall not permit cause any of its SubsidiariesSubsidiaries to, without VMware’s the prior written consent of Parent (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall will not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), to:):
(a) amend its Constitutive Documents;
(b) (i) declare, set aside or pay any dividends dividend on, or make any other distributions distribution (whether in cash, stock or property) in respect of, any of its capital stock or other equity interests, except for dividends by a wholly owned Subsidiary of Pivotal to Pivotal or any other wholly owned Subsidiary of Pivotal, Capital Stock; (ii) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii) split, combine, combine or reclassify or otherwise amend the terms of any of its capital stock or other equity interests 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 Capital Stock; or (iii) purchase, redeem or otherwise acquire any shares of its Capital Stock, or any option, warrant, call or right relating to such shares, interests or other equity interestssecurities (including any Options);
(bc) issue, deliver, sell, grant, pledge sell or otherwise encumber or subject to any Lien grant (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Lawsi) any shares of its capital stock Capital Stock, (ii) any Voting Company Debt or other equity interests or voting securities, (iii) any securities convertible into, into or exchangeable for or exercisable for any such shares or other equity interestsfor, or any rightsoptions, warrants or options rights to acquire, any such shares shares, Voting Company Debt, voting securities or other equity interests, convertible or exchangeable securities or (iv) any stock appreciation rights“phantom” stock, “phantom” stock rights, stock appreciation rights or stock-based performance units, rights to receive shares of capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof (other than the issuance of Class A Shares shares of Company Common Stock upon the exercise of Pivotal Options, the settlement of Pivotal RSUs Options or the exercise conversion of purchase rights under the Pivotal ESPPPreferred Stock, in each case, that are case outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with their the terms as in effect of such Options or Preferred Stock on such date);
(c) amend or otherwise change, or authorize or propose to amend or otherwise change, its certificate the date of incorporation or bylaws (or similar organizational documents)this Agreement;
(d) directly repurchase, prepay, create, incur, assume or indirectly acquire or agree to acquire (i) by merging or consolidating with, purchasing a substantial equity interest in or a substantial portion modify any terms of any Indebtedness of the assets of, making an investment in Company or loan or capital contribution to or in any other manner, any corporation, partnership, association or other business organization or division thereof or (ii) any assets that are otherwise material to Pivotal and of its Subsidiaries, except, in each case, for (1) capital expenditures which shall be subject issue or sell any warrants or other rights to acquire any Indebtedness of the limitations of clause (i) below and (2) purchases of marketable securities by Company or on behalf of Pivotal or its Subsidiaries for cash management purposes in the ordinary course of business consistent with Pivotal’s investment management policy, and except in the case of clause (ii), acquisitions of inventory, products or services in the ordinary course of business; Table of Contents
(e) directly or indirectly sell, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien or otherwise dispose in whole or in part of any of its material properties, assets or rights (including any material Pivotal Intellectual Property Registrations) or any interest therein, except, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Out;
(f) adopt or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, other than Pivotal enter into any Contract to maintain any financial statement condition of another Person or enter into any Contract having the economic effect of any of the foregoing;
(e) sell, lease (as lessor), license or otherwise dispose of or subject to any Lien any properties or assets that are material, individually or in the aggregate, to the Company or any direct of its Subsidiaries, except sales of inventory in the Ordinary Course of Business;
(f) enter into any lease or indirect wholly owned Subsidiary sublease of Pivotalreal property (whether as a lessor, sublessor, lessee or sublessee) or modify, amend, terminate or fail to exercise any right to renew any lease or sublease of real property;
(g) acquire or agree to acquire (i) by merging or consolidating with, or by purchasing a substantial portion of the assets of, or by any other manner, any equity interest in or business of any Person or (ii) any assets that are material, individually or in the aggregate, to the Company or any of its Subsidiaries, except purchases of inventory in the Ordinary Course of Business;
(h) change its fiscal year, revalue any of its material assets or make any changes in financial accounting methods, principles, practices or policies, except as required by GAAP or applicable Law;
(i) make or change any Tax election; change any Tax accounting period or method; file any amended Tax Return; enter into any closing agreement with respect to Taxes; settle any Tax claim or assessment; surrender any right to claim a refund of Taxes; consent to any extension or waiver of the limitations period for the assessment of any Tax; take any action outside the Ordinary Course of Business whose effect would be to increase the Company’s or any of its Subsidiaries’ present or future Tax liability or to decrease the Company’s or any of its Subsidiaries’ present or future Tax assets;
(j) (i) grant any awards under any Benefit Plan (including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock or the removal of existing restrictions in any Contract, Benefit Plan or Benefit Agreement or awards made thereunder), (ii) pay or provide to any Company Personnel any bonus, other amount or other benefit, or make any advance or loan to any Company Personnel, not provided for under any Contract, Benefit Plan or Benefit Agreement in effect on the date of this Agreement other than the payment of bonus amounts which, in the aggregate, do not constitute Excess Bonus Costs, or the payment of base compensation or advances for business expenses in the Ordinary Course of Business, (iii) grant to any Company Personnel any increase in compensation (including any increase in severance or termination pay) except to the extent required under existing employment agreements, (iv) enter into any employment, consulting, indemnification, severance or termination agreement with any Company Personnel (v) establish, adopt, enter into or amend in any material respect any collective bargaining agreement, other Benefit Agreement or Benefit Plan or (vi) take any action to accelerate the vesting or payment of any compensation or benefit under any Contract, Benefit Plan or Benefit Agreement or to fund or in any other way secure the payment of compensation or benefits under any Contract, Benefit Plan or Benefit Agreement or make any material determinations not in the Ordinary Course of Business under any Benefit Agreement or Benefit Plan;
(k) incur or commit to incur any capital expenditure (or authorization any obligation or commitment with respect thereto that liability in connection therewith), in an amount greater than $100,000 individually or $500,000 in the aggregate are in excess of $1,000,000aggregate;
(jl) except as required by enter into any judgment by Contract (or any substantially related Contracts, taken together) (i) that would constitute a court Material Contract, other than Contracts with customers, suppliers and vendors that are entered into in the Ordinary Course of competent jurisdictionBusiness, (iii) that, if consummation of the Merger or any of the other transactions contemplated hereby or compliance by the Company with the provisions of this Agreement will conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a benefit under, or result in the creation of any Lien in or upon any of the properties or assets of the Company or Parent or any of Parent’s Subsidiaries under, or give rise to any increased, additional, accelerated or guaranteed rights or entitlements under, any provision of such Contract, or (iii) containing any restriction on the ability of the Company or any of its Subsidiaries to assign all or any portion of its rights, interests or obligations thereunder, unless such restriction expressly permits any assignment to Parent and Parent’s Subsidiaries in connection with or following the consummation of the Merger and the other transactions contemplated hereby;
(m) pay, discharge, settle or satisfy any claimsmaterial Lien or material claims (including claims of stockholders and any stockholder litigation relating to the Merger or any other transaction contemplated hereby), liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge or satisfaction satisfaction, in the ordinary course Ordinary Course of businessBusiness or in accordance with their terms, (B) as required by their terms as in effect on the date of this Agreement of claims, liabilities or obligations reflected or reserved against in the most recent audited financial statements (Most Recent Balance Sheet or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements Most Recent Balance Sheet Date in the ordinary Ordinary Course of Business (and all such liabilities incurred in the Ordinary Course of Business shall be paid or otherwise satisfied in the manner and time period consistent with past practice in the normal course of business); waive, (ii) release or assign any material rights or material claims under, fail to take a required action under, permit the lapse of or default under, or modify, amend or terminate any Material Contract; or cancel any material Indebtedness owed to Pivotal or any of its Subsidiaries, or (iii) waive, release, grant or transfer any right of material valueanother Person;
(kn) (i) materially modify, materially amend, terminate, cancel, waive collect its accounts receivable in any material right under manner or extend over any Material Contract (other than renewals time period that is inconsistent with past practices of Contracts with customers of Pivotal Products the Company and its Subsidiaries in the ordinary course of business) or (ii) enter into any Contract that if in effect on the date hereof would be a Material Contract, other than customer contracts entered into in the ordinary normal course of business;
(lo) commence create or dissolve any Legal Proceeding Subsidiary of the Company; or
(other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal p) authorize any of, or commit, resolve or agree, to take any of its Subsidiaries), or compromise, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements in the ordinary course of business that involve only the payment of money damages not in excess of $500,000 individually or $2,000,000 in the aggregate, in any case without the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal or any of its Subsidiaries;
(m) change its financial or Tax accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law;
(n) settle or compromise any material liability for Taxes or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liability; consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of a material amount of Taxes; grant any power of attorney with respect to material Taxes; enter into any Tax Sharing Agreement or any closing agreement or other similar agreement; or change any method of accounting for Tax purposes;foregoing actions.
Appears in 1 contract
Samples: Merger Agreement (Audiocodes LTD)
Conduct of Business. During (a) Conduct of Business by the period Company. Except for matters set forth in Section 5.01 of the Company Disclosure Letter or otherwise contemplated or required by this Agreement, or as required by a Governmental Entity (including pursuant to a Judgment issued by the FERC, the FCC or any State Commission) or by applicable Law, or as contemplated by the Proceedings, or with the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed), from the date of this Agreement to until the Effective Time, except as consented to in writing in advance by VMware or as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) by this Agreement, Pivotal shallCompany shall use commercially reasonable efforts to, and shall to cause each of its Subsidiaries Company Subsidiary to, carry on (x) conduct its business in the ordinary coursecourse of business in all material respects and (y) to the extent consistent with the foregoing clause (x), including its development and sales efforts as currently contemplatedpreserve intact, and use commercially reasonable efforts to (i) preserve intact in all material respects, its business organization, assets, rights organization and properties, (ii) keep available the services of its current officers, employees and consultants and (iii) preserve its goodwill and its existing relationships with customers, suppliers, licensors, licensees, distributors and others having material business dealings with itGovernmental Entities. In addition to addition, and without limiting the generality of the foregoing, during the period from the date of this Agreement to the Effective Time, except (x) as set forth in section 5.1 of the Pivotal Company Disclosure Letter, (y) as specifically Letter or otherwise contemplated or required by this Agreement Agreement, or as required by a Governmental Entity (zincluding pursuant to a Judgment issued by the FERC, the FCC or any State Commission) as specifically required or by applicable Law, Pivotal shall notor as contemplated by the Proceedings, and shall not permit any of its Subsidiaries, without VMware’s or with the prior written consent of Parent (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below consent shall not be unreasonably withheld, conditioned or delayed), from the date of this Agreement until the Effective Time, the Company shall not, and in all other cases shall be in VMware’s sole discretion)not permit any Company Subsidiary to, todo any of the following:
(a) (i) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or propertyproperty or any combination thereof) in respect of, any of its capital stock or stock, other equity interestsinterests or voting securities, except for (1) quarterly cash dividends payable by the Company or any Company Subsidiary in respect of shares of Company Common Stock on a schedule and in an amount per share of Company Common Stock consistent with the Company’s past practices but without increase in the amount per share, (2) dividends and distributions by a wholly owned direct or indirect Company Subsidiary to its parent and (3) a “stub period” dividend to holders of Pivotal record of Company Common Stock as of immediately prior to Pivotal or any other wholly owned Subsidiary the Effective Time equal to the product of Pivotal(A) the number of days from the record date for payment of the last quarterly dividend paid by the Company prior to the Effective Time, multiplied by (B) a daily dividend rate determined by dividing the amount of the last quarterly dividend prior to the Effective Time by ninety-one (91);
(ii) purchaseamend any of its Organizational Documents (except for immaterial or ministerial amendments);
(iii) except as permitted by Section 5.01(a)(v) or for transactions among the Company and the Company Subsidiaries or among the Company Subsidiaries, redeem split, combine, consolidate, subdivide or otherwise acquire shares reclassify any of its capital stock, other equity interests or voting securities, or securities convertible into or exchangeable or exercisable for capital stock or other equity interests of Pivotal or its Subsidiaries or any optionsvoting securities, warrants, or rights to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii) split, combine, reclassify or otherwise amend the terms of any of its capital stock or other equity 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, other equity interests or voting securities;
(iv) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any capital stock or voting securities of, or equity interests in, the Company or any Company Subsidiary or any securities of the Company or any Company Subsidiary convertible into or exchangeable or exercisable for capital stock or voting securities of, or equity interests in, the Company or any Company Subsidiary, or any warrants, calls, options or other equity rights to acquire any such capital stock, securities or interests, except for (1) the acquisition by the Company of shares of Company Common Stock in the open market to satisfy its obligations under all Company Benefit Plans or under the Company’s dividend reinvestment and direct stock purchase plan (the “Company DRIP”), (2) the withholding of shares of Company Common Stock to satisfy Tax obligations with respect to awards granted pursuant to the Company Benefit Plans and (3) the acquisition by the Company of awards granted pursuant to the Company Benefit Plans in connection with the forfeiture of such awards;
(bv) issue, deliver, sell, grant, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the any Equity Securities Act or other applicable securities Laws) any shares of its capital stock or other equity interests or any securities convertible into, exchangeable for or exercisable for any such shares or other equity interests, or any rights, warrants or options to acquire, any such shares or other equity interests, or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive shares of capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof (other than the issuance of Class A Shares upon the exercise of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPPCompany Voting Debt, in each case, that are except for the issuance of (1) Equity Securities pursuant to the Company Benefit Plans as permitted by Section 5.01(a)(vi), (2) shares of Company Common Stock pursuant to Director Stock Units, Time-Vested Restricted Stock Awards and Performance-Based Restricted Stock Awards outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with their terms as in effect on such datethe date of this Agreement or granted after the date of this Agreement pursuant to the foregoing clause (1), or (3) shares of Company Common Stock under the Company DRIP;
(cvi) (1) grant to any Company Personnel any increase in compensation or benefits except in the ordinary course of business and consistent with past practices, (2) grant to Company Personnel increases, in the aggregate, in change-in-control, severance, retention or termination pay, (3) enter into or amend any change-in-control, severance, retention or otherwise changetermination agreement with any Company Personnel, except in order to effect changes permitted by clause (2) of this Section 5.01(a)(vi), (4) establish, adopt, enter into, amend in any material respect or authorize terminate any Company Union Contract or propose to amend Company Benefit Plan or otherwise change, its certificate of incorporation or bylaws Company Benefit Agreement (or similar organizational documentsany plan or agreement that would be a Company Union Contract, Company Benefit Plan or Company Benefit Agreement if in existence on the date hereof);
(d) directly or indirectly acquire or agree to acquire (i) by merging or consolidating with, purchasing a substantial equity interest in or a substantial portion of the assets of, making an investment in or loan or capital contribution to or in any other manner, any corporation, partnership, association or other business organization or division thereof or (ii) any assets that are otherwise material to Pivotal and its Subsidiaries, except, in each case, for (1) capital expenditures which shall be subject to the limitations of clause (i) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes except in the ordinary course of business consistent with Pivotal’s investment management policypast practices or (5) take any action to accelerate the time of vesting, and funding or payment of any compensation or benefits under any Company Benefit Plan or Company Benefit Agreement, except in the case of clause the foregoing clauses (ii), acquisitions of inventory, products or services in 1) through (5) for actions required pursuant to the ordinary course of business; Table of Contents
(e) directly or indirectly sell, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien or otherwise dispose in whole or in part terms of any of its material properties, assets Company Benefit Plan or rights (including any material Pivotal Intellectual Property Registrations) or any interest therein, except, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirationsCompany Benefit Agreement existing on the date hereof, or encumbrances as required to be effected prior to by the Effective Time pursuant to existing Contracts that are not material to Pivotal terms and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Outconditions of this Agreement;
(fvii) adopt make any material change in financial accounting methods, principles or enter into practices, except to the extent as may have been required by a plan of complete change in applicable Law or partial liquidation, dissolution, restructuring, recapitalization GAAP or other reorganizationby any Governmental Entity (including the SEC or the Public Company Accounting Oversight Board);
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (iiviii) make any loansacquisition or disposition of a material asset or business (including by merger, advances consolidation or capital contributions toacquisition of stock or assets), except for (1) any acquisition or investments in, any other Person, other than Pivotal or any direct or indirect wholly owned Subsidiary of Pivotal;
(i) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto disposition for consideration that in the aggregate are is individually not in excess of $1,000,000;
(j) except as required by any judgment by a court of competent jurisdiction, (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge or satisfaction 5,000,000 and in the ordinary course of business, (B) as required by their terms as in effect on the date of this Agreement of claims, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof (for amounts aggregate not in excess of such reserves) $20,000,000 or (C2) incurred since the date any disposition of such financial statements in the ordinary course of business, (ii) cancel any material Indebtedness owed to Pivotal obsolete or any of its Subsidiaries, or (iii) waive, release, grant or transfer any right of material value;
(k) (i) materially modify, materially amend, terminate, cancel, waive any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (ii) enter into any Contract that if in effect on the date hereof would be a Material Contract, other than customer contracts entered into worn-out equipment in the ordinary course of business;
(lix) commence incur any Legal Proceeding Indebtedness, except for (other than a Legal Proceeding 1) Indebtedness incurred in the ordinary course of business, (2) as a result of a Legal Proceeding commenced against Pivotal or reasonably necessary to finance any of its Subsidiariescapital expenditures permitted under
Section 5.01 (a)(x), or compromise(3) Indebtedness in replacement of existing Indebtedness, settle or agree to settle (4) guarantees by the Company of existing Indebtedness of any Legal Proceedingwholly owned Company Subsidiary, (5) guarantees and other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements credit support by the Company of obligations of any Company Subsidiary in the ordinary course of business that involve only the payment of money damages not in excess of $500,000 individually consistent with past practice, (6) borrowings under existing revolving credit facilities (or $2,000,000 in the aggregate, in any case without the imposition of any equitable relief on, replacements thereof on comparable terms) or the admission of wrongdoing by, Pivotal or any of its Subsidiaries;
(m) change its financial or Tax accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law;
(n) settle or compromise any material liability for Taxes or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than existing commercial paper programs in the ordinary course of business or (7) Indebtedness in amounts necessary to maintain the capital structure of the Company Subsidiaries, as authorized by the State Commissions, and on a basis to maintain the present capital structure of the Company consistent with past practice that would materially and adversely affect its Tax liability; consent in all material respects;
(x) make, or agree or commit to make, any extension or waiver capital expenditure, except for capital expenditures (1) in the ordinary course of business, (2) in accordance with the capital plan set forth in Section 5.01(a)(x) of the limitation period applicable to any claim Company Disclosure Letter, plus a 10% aggregate variance or assessment in respect of a material amount of Taxes; grant any power of attorney (3) with respect to any capital expenditure not addressed by the foregoing clauses (1) or (2), not to exceed $15,000,000 in any twelve (12) month period;
(xi) (1) modify or amend in any material Taxes; respect, or terminate or waive any material right under, any Filed Company Contract (except for (A) any modification, amendment, termination or waiver in the ordinary course of business or (B) a termination without material penalty to the Company or the appropriate Company Subsidiary) or (2) without limiting Parent’s obligations under Section 6.03, enter into any Tax Sharing Agreement Contract that, from and after the Closing, purports to bind Parent or any closing agreement or of its Affiliates (other similar agreement; than the Company and the Company Subsidiaries);
(xii) make or change any material Tax election, change any material method of accounting Tax accounting, settle or compromise any material Tax liability or refund or amend any material Tax Return, in each case, except as may be required by a change in applicable Law or GAAP or by any Governmental Entity;
(xiii) waive, release, assign, settle or compromise any material Claim against the Company or any Company Subsidiary, except for Tax purposes;(1) waivers, releases, assignments, settlements or compromises in the ordinary course of business or (2) waivers, releases, assignments, settlements or compromises that (A) with respect to the payment of monetary damages, the amount of monetary damages to be paid by the Company or the Company Subsidiaries does not exceed (I) the amount with respect thereto reflected on the Company Financial Statements (including the notes thereto) or (II) $10,000,000, in the aggregate, in excess of the proceeds received or to be received from any insurance policies in connection with such payment or (B) with respect to any nonmonetary terms and conditions thereof, would not have or would not reasonably be expected to have, individually or in the aggregate, a material effect on the continuing operations of the Company and the Company Subsidiaries (taken as a whole); or
(xiv) enter into any Contract to do any of the foregoing.
Appears in 1 contract
Conduct of Business. During Except as expressly permitted by this Agreement or as required by applicable Law, during the period from the date of this Agreement to until the earlier of the termination of this Agreement and the Effective Time, except as consented to in writing in advance by VMware or as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) by this Agreement, Pivotal Company shall, and shall cause each of its Subsidiaries to, carry on conduct its business in the ordinary coursecourse consistent with past practice, including its development and sales efforts as currently contemplated, and to use commercially reasonable efforts to (i) maintain and preserve intact in all material respects its business organization, assets, rights organization and properties, (ii) keep available the goodwill of its business relationships and to retain the services of its current officers, employees present officers and consultants and (iii) preserve its goodwill and its relationships with customers, suppliers, licensors, licensees, distributors and others having material business dealings with itkey employees. In addition to and without Without limiting the generality of the foregoing, except as expressly permitted by this Agreement, as set forth on Schedule 5.1 or as required by applicable Law, during the period from the date of this Agreement to the Effective Time, except (x) as set forth in section 5.1 of the Pivotal Disclosure Letter, (y) as specifically required by this Agreement or (z) as specifically required by applicable Law, Pivotal Company shall not, and shall not permit any of its SubsidiariesSubsidiaries to, without VMware’s prior written consent of Parent (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), to:):
(a) (i) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock or other equity interests, except for dividends by a wholly owned Subsidiary of Pivotal to Pivotal or any other wholly owned Subsidiary of Pivotal, (ii) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii) split, combine, reclassify or otherwise amend the terms of any of its capital stock or other equity 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 other equity interests;
(b) issue, deliver, sell, grant, dispose of, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) any shares of its capital stock stock, voting securities or other equity interests interests, or any securities or rights convertible into, exchangeable for or exercisable for, or evidencing the right to subscribe for any such shares of its capital stock, voting securities or other equity interests, or any rights, warrants warrants, options, calls, commitments or options any other agreements of any character to acquirepurchase or acquire any shares of its capital stock, voting securities or equity interests or any securities or rights convertible into, exchangeable or exercisable for, or evidencing the right to subscribe for, any such shares of its capital stock, voting securities or other equity interests, or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive provided that the Company may issue shares of capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof (other than the issuance of Class A Shares Company Common Stock upon the exercise of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights Options granted under the Pivotal ESPP, in each case, Equity Compensation Plan that are outstanding on the date of this Agreement and Made Available Agreement;
(i) redeem, purchase or otherwise acquire any of its outstanding shares of capital stock, voting securities or equity interests, or any rights, warrants, options, calls, commitments or any other agreements of any character to VMware and acquire any shares of its capital stock, voting securities or equity interests; (ii) declare, set aside for payment or pay any dividend on, or make any other distribution in respect of, any shares of its capital stock or otherwise make any payments to its stockholders in accordance with their terms capacity as in effect on such date(other than dividends by a direct or indirect wholly owned Subsidiary of the Company to its parent); (iii) split, combine, subdivide or reclassify any shares of its capital stock; or (iv) amend (including by reducing an exercise price or extending a term) or waive any of its rights under, or amend to add new provisions to accelerate the vesting under, any provision of the Company Stock Plans or any agreement evidencing any outstanding stock option or other right to acquire capital stock of the Company or any restricted stock purchase agreement or any similar or related contract;
(c) amend incur or otherwise changeassume any indebtedness for borrowed money or guarantee any indebtedness or issue or sell any debt securities or options, warrants, calls or authorize other rights to acquire any debt securities of the Company or propose to amend or otherwise change, any of its certificate of incorporation or bylaws (or similar organizational documents)Subsidiaries other than indebtedness for borrowed money between and amongst the Company and its wholly-own Subsidiaries;
(d) directly sell, transfer, lease, mortgage, encumber or indirectly acquire otherwise dispose of or agree subject to any Lien (including pursuant to a sale-leaseback transaction or an asset securitization transaction) any of its properties or assets (including securities of Subsidiaries) to any Person, except (i) pursuant to Contracts in force on the date of this Agreement and listed on Section 5.1(d) of the Company Disclosure Schedule, (ii) dispositions of obsolete or worthless assets, or (iii) sales of properties or assets (excluding securities of Subsidiaries) in the ordinary course of business consistent with the Company’s past practices and that are not material in amount or significance;
(e) sell, transfer, license, lease, mortgage, encumber or otherwise dispose of or subject to any Lien (including pursuant to a sale-leaseback transaction or an asset securitization transaction) any of the Company Intellectual Property, other than in the ordinary course of business and consistent with past practice;
(f) acquire (i) by merging or consolidating with, or by purchasing all of or a substantial equity interest in in, or a substantial portion of the assets of, making an investment in or loan or capital contribution to or in by any other manner, any corporationPerson or division, partnershipbusiness or equity interest of any Person, association or other business organization or division thereof or (ii) any assets that are otherwise material to Pivotal and its Subsidiaries, except, in each case, for (1) capital expenditures which shall be subject to the limitations of clause (i) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes except in the ordinary course of business consistent with Pivotal’s past practice;
(g) make any material investment management (by contribution to capital, property transfers, purchase of securities or otherwise) in, or loan or advance (other than travel and similar advances to its employees in the ordinary course of business consistent with past practice) to, any Person other than a direct or indirect wholly-owned Subsidiary of the Company;
(h) (i) terminate or amend any Material Contract, (ii) enter into or extend the term or scope of any Contract that purports to restrict the Company, or any existing or future Subsidiary or Affiliate of the Company, from engaging in any line of business, including in any geographic area;
(i) (i) pay any bonus or make any profit-sharing or similar payment to or increase the compensation of any of its directors, officers or employees or (ii) enter into, establish, amend or terminate any employment, consulting, retention, change in control, collective bargaining, bonus, incentive compensation, profit sharing, health or other welfare, stock option or other equity (or equity-based), pension, retirement, vacation, severance, deferred compensation or other compensation or benefit plan, policy, agreement, trust, fund or arrangement with, for or in respect of, any stockholder, director, officer, other employee, consultant or Affiliate, other than (x) as required pursuant to applicable Law, Section 5.10 or the terms of the agreements set forth on Section 5.1(i) of the Company Disclosure Schedule and except (y) increases in salaries, wages and benefits of employees (other than officers) made in the case ordinary course of clause business and in amounts and in a manner consistent with past practice;
(ii)j) make, acquisitions revoke or change any material election concerning Taxes or Tax Returns, enter into any closing agreement with respect to Taxes, settle or compromise any material Tax claim or assessment or surrender any right to claim a refund of inventoryTaxes or obtain any Tax ruling, products or services waive or extend the statute of limitations in respect of any Material Tax (other than pursuant to extensions of time to file Tax Returns in the ordinary course of business; Table of Contents
(e) directly or indirectly sell, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien or otherwise dispose in whole or in part of any of its material properties, assets or rights (including any material Pivotal Intellectual Property Registrations) or any interest therein, except, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Out);
(fk) make any changes in financial or tax accounting methods, principles or practices (or change an annual accounting period), except insofar as may be required by a change in GAAP or applicable Law;
(l) amend or otherwise change the Company Charter Documents or the Subsidiary Organizational Documents;
(m) adopt any new stockholder rights or enter into similar plans;
(n) adopt a plan or agreement of complete or partial liquidation, dissolution, restructuring, recapitalization recapitalization, merger, consolidation or other reorganizationreorganization (other than transactions exclusively between wholly-owned Subsidiaries of the Company);
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, other than Pivotal or any direct or indirect wholly owned Subsidiary of Pivotal;
(i) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto that in the aggregate are in excess of $1,000,000;
(j) except as required by any judgment by a court of competent jurisdiction, (io) pay, discharge, settle or satisfy any material claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge discharge, settlement or satisfaction in the ordinary course of business, (B) as required by accordance with their terms as in effect on the date of this Agreement of claimsliabilities, liabilities claims or obligations reflected or reserved against in the most recent audited consolidated financial statements (or the notes thereto) of Pivotal the Company included in the Pivotal Recent SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements in the ordinary course of businessbusiness consistent with past practice; (p) commence, (ii) cancel any material Indebtedness owed to Pivotal or any of its Subsidiaries, or (iii) waive, release, grant or transfer any right of material value;
(k) (i) materially modify, materially amend, terminate, cancel, waive any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (ii) enter into any Contract that if in effect on the date hereof would be a Material Contract, other than customer contracts entered into in the ordinary course of business;
(l) commence any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal or any of its Subsidiaries), or compromise, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements in the ordinary course of business that involve only the payment of money damages not in excess of $500,000 individually or $2,000,000 in the aggregate, in any case without the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal or any of its Subsidiaries;
(m) change its financial or Tax accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law;
(n) settle or compromise any litigation, proceeding or investigation material liability for Taxes or surrender any material claim for to the Company and its Subsidiaries taken as a refund of Taxeswhole (this covenant being in addition to the Company’s agreement set forth in Section 5.8 hereof); file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liability; consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of a material amount of Taxes; grant any power of attorney with respect to material Taxes; enter into any Tax Sharing Agreement or any closing agreement or other similar agreement; or change any method of accounting for Tax purposes;or
Appears in 1 contract
Conduct of Business. During the period from the date of this Agreement to the Effective Time, except as consented to in writing in advance by VMware or as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) Except as contemplated or permitted by this Agreement, Pivotal shall, and shall cause each of its Subsidiaries to, carry on its business in the ordinary course, including its development and sales efforts as currently contemplated, and use commercially reasonable efforts to (i) preserve intact its business organization, assets, rights and properties, (ii) keep available the services of its current officers, employees and consultants and (iii) preserve its goodwill and its relationships with customers, suppliers, licensors, licensees, distributors and others having material business dealings with it. In addition to and without limiting the generality Agreement or Section 6.1 of the foregoingDisclosure Schedule or as required by applicable Law, during the period from the date of this Agreement until the Closing, unless the Buyer otherwise consents (which consent shall not be unreasonably withheld or delayed), the Seller shall use Commercially Reasonable Efforts to cause the Effective TimeCompany to conduct the business of the Company in all material respects in the ordinary course consistent with past practice.
(b) Without limiting the generality of Section 6.1(a), except (x) as set forth in section 5.1 contemplated or permitted by this Agreement, or Section 6.1 of the Pivotal Disclosure Letter, (y) Schedule or as specifically required by this Agreement or (z) as specifically required by applicable Law, Pivotal shall not, and shall not permit any of its Subsidiaries, without VMware’s prior written consent (which consent, in during the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), to:
(a) (i) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock or other equity interests, except for dividends by a wholly owned Subsidiary of Pivotal to Pivotal or any other wholly owned Subsidiary of Pivotal, (ii) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on period from the date of this Agreement until the Closing, unless the Buyer otherwise consents (which consent shall not be unreasonably withheld or as permitted by this Agreementdelayed), in accordance with their terms on the date of this Agreement and (B) Seller shall cause the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii) split, combine, reclassify or otherwise amend the terms of any of its capital stock or other equity 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 other equity interests;Company not to:
(bi) (A) issue, deliver, sell, grant, pledge sell or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) grant any shares of its capital stock or other equity interests stock, or any securities or rights convertible into, exchangeable for or exercisable for, or evidencing the right to subscribe for any such shares or other equity interestsof its capital stock, or any rights, warrants or options to acquirepurchase any shares of its capital stock; (B) redeem, purchase or otherwise acquire any such of its outstanding shares or other equity interestsof capital stock, or any stock appreciation rights, “phantom” stock rightswarrants or options to acquire any shares of its capital stock; (C) declare, performance unitsset aside for payment or pay any dividend on, rights or make any other distribution in respect of, any shares of its capital stock, except for regular dividends consistent with past practice or any other dividends declared prior to receive the Closing Date; or (D) split, combine, subdivide or reclassify any shares of its capital stock, in the case of clauses (A) through (D), except for transactions solely between the Company and Seller prior to the Closing which would not cause the closing condition in Section 8.2(a) to not be satisfied as of the Closing;
(ii) except as otherwise contemplated herein or to increase the number of authorized shares of capital stock stock, amend its certificate of VMware on incorporation, bylaws or analogous charter documents;
(iii) adopt a deferred basis plan or other rights linked agreement of complete or partial liquidation or dissolution;
(iv) sell, pledge, transfer, dispose of or encumber or suffer or permit to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof exist any Lien (other than Permitted Liens) on any of the issuance material properties or assets of Class A Shares upon the exercise Company; or
(v) enter into any Contract, commitment or arrangement to do, or take, or agree to take any of Pivotal Optionsthe foregoing actions.
(c) The Buyer agrees that, during the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPP, in each case, that are outstanding on period from the date of this Agreement until the Closing Date, the Buyer shall not and Made Available to VMware and otherwise in accordance with their terms as in effect on such date);
(c) amend or otherwise changeshall not permit any of its subsidiaries to, take, or authorize agree or propose commit to amend take, any action that could reasonably be expected to (i) impose any material delay in the obtaining of, or significantly increase the risk of not obtaining, any authorizations, consents, Transactions or the expiration or termination of any applicable waiting period, (ii) significantly increase the risk of any Governmental Authority entering an order or Restraint prohibiting or impeding the consummation of the Transactions or (iii) otherwise change, its certificate materially delay the consummation of incorporation or bylaws (or similar organizational documents);the Transactions. The Buyer also acknowledges that any dividends declared prior to the Closing in compliance with Section 6.1(b)(i) shall be for the Seller’s account and the Buyer shall have no rights whatsoever in connection therewith.
(d) directly or indirectly acquire or agree Notwithstanding anything in this agreement to acquire (i) by merging or consolidating withthe contrary, purchasing a substantial equity interest in or a substantial portion the Seller shall, and shall cause the Company to, use commercially reasonable efforts to provide Net Working Capital of the assets of, making Company on the Closing Date in an investment in or loan or capital contribution amount equal to or in any other manner, any corporation, partnership, association or other business organization or division thereof or (ii) any assets that are otherwise material to Pivotal and its Subsidiaries, except, in each case, for (1) capital expenditures which shall be subject to the limitations of clause (i) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes in the ordinary course of business consistent with Pivotal’s investment management policy, and except in the case of clause (ii), acquisitions of inventory, products or services in the ordinary course of business; Table of Contents
(e) directly or indirectly sell, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien or otherwise dispose in whole or in part of any of its material properties, assets or rights (including any material Pivotal Intellectual Property Registrations) or any interest therein, except, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Out;
(f) adopt or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, other greater than Pivotal or any direct or indirect wholly owned Subsidiary of Pivotal;
(i) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto that in the aggregate are in excess of $1,000,000;
(j) except as required by any judgment by a court of competent jurisdiction, (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge or satisfaction in the ordinary course of business, (B) as required by their terms as in effect on the date of this Agreement of claims, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements in the ordinary course of business, (ii) cancel any material Indebtedness owed to Pivotal or any of its Subsidiaries, or (iii) waive, release, grant or transfer any right of material value;
(k) (i) materially modify, materially amend, terminate, cancel, waive any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (ii) enter into any Contract that if in effect on the date hereof would be a Material Contract, other than customer contracts entered into in the ordinary course of business;
(l) commence any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal or any of its Subsidiaries), or compromise, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements in the ordinary course of business that involve only the payment of money damages not in excess of $500,000 individually or $2,000,000 in the aggregate, in any case without the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal or any of its Subsidiaries;
(m) change its financial or Tax accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law;
(n) settle or compromise any material liability for Taxes or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liability; consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of a material amount of Taxes; grant any power of attorney with respect to material Taxes; enter into any Tax Sharing Agreement or any closing agreement or other similar agreement; or change any method of accounting for Tax purposes;100,000.
Appears in 1 contract
Samples: Stock Purchase Agreement
Conduct of Business. (1) During the period from the date of this Agreement to until the Effective TimeClosing or earlier termination of this Agreement, except as consented otherwise permitted by, or reasonably necessary to in writing in advance by VMware or effectuate the transactions contemplated by, this Agreement, as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses Section 5.01 of the Company Disclosure Letter, in response to or related to any Contagion Event or any change in applicable Law or policy as a result of or related to any Contagion Event, as required by applicable Law, Order, fiduciary obligations, existing Contracts or the rules or regulation of NASDAQ or with the prior written consent of Parent (awhich consent shall not be unreasonably withheld, delayed or conditioned), (x) through (r) below) by this Agreement, Pivotal the Company shall, and shall cause each of its Subsidiaries to, carry on use its business and their reasonable best efforts to conduct their respective businesses and operations in the ordinary coursecourse of business in all material respects, including its development and sales efforts as currently contemplated(y) the Company shall, and shall cause its Subsidiaries to, use commercially its and their reasonable best efforts to (i) preserve intact preserve, in all material respects, its business organization, assets, rights and properties, (ii) keep available the services each of its current Subsidiaries’ business organizations substantially intact and preserve existing relationships with key customers, cedents, brokers, reinsurance providers, regulators, rating agencies, officers, employees and consultants other Persons with whom the Company or any of its Subsidiaries have significant business relationships, and (iii) preserve its goodwill and its relationships with customers, suppliers, licensors, licensees, distributors and others having material business dealings with it. In addition to and without limiting the generality of the foregoing, during the period from the date of this Agreement to the Effective Time, except (x) as set forth in section 5.1 of the Pivotal Disclosure Letter, (y) as specifically required by this Agreement or (z) as specifically required by applicable Law, Pivotal the Company shall not, not and shall not permit any cause each of its Subsidiaries, without VMware’s prior written consent (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall Subsidiaries not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), to:
(a) (i) declare, set aside issue or pay authorize the issuance of any dividends onequity securities in the Company or any Subsidiary of the Company, or make any other distributions (whether in cashsecurities convertible into, stock or property) in respect ofexchangeable or exercisable for, any of its capital stock or other such equity interestssecurities, except for dividends by a wholly owned Subsidiary of Pivotal to Pivotal or any other wholly owned Subsidiary rights of Pivotal, (ii) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights kind to acquire any such shares equity securities or such convertible or exchangeable securities, other than as required pursuant to the vesting, settlement or exercise of Company Awards or other equity interests, other than awards (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their the terms on of the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options applicable Company Award, other equity award or Pivotal RSUs Company Right in effect on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on (B) granted after the date of this Agreement in accordance with this Agreement;
(b) establish a record date for, declare, set aside or pay, or propose to declare, set aside or pay, any dividends on or make other distributions in respect of any of its share capital, options, warrants or other equity or voting interests (iiiwhether in cash, shares or property or any combination thereof), except for dividends or other distributions paid by a direct or indirect wholly owned Subsidiary to the Company or its Subsidiaries;
(c) adjust, split, combine, subdivide or reclassify or otherwise amend the terms of any of its share capital stock or other equity interests or issue voting interests, or authorize the issuance of any other securities in respect of, in lieu of or in substitution for for, shares of its share capital stock or other equity or voting interests;
(bd) issue(A) amend or waive the material terms of any option, deliverwarrant or other right to acquire shares of its share capital or (B) repurchase, sell, grant, pledge redeem or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) acquire any shares of its (or any of its Subsidiaries’) share capital stock or other equity interests or any securities convertible into, exchangeable for into or exercisable for any such shares of its (or any of its Subsidiaries’) share capital or other equity or voting interests, other than (1) repurchases, redemptions or acquisitions by a wholly owned Subsidiary of share capital or such other securities or equity or voting interests, as the case may be, of another of its wholly owned Subsidiaries or (2) the withholding of shares to satisfy applicable tax withholding requirements upon the exercise or settlement of any equity-based compensation award;
(e) incur, assume, guarantee or otherwise become responsible for any Indebtedness, except for (A) any borrowings under the Company’s existing credit facilities in an amount not in excess of $70,000,000 in the aggregate, consisting of $35,000,000 to be used for interest servicing and $35,000,000 to be used for run rate holding company operating expenses; provided that borrowings under this Section 5.01(a)(v)(A) shall be permitted only to the extent dividends from the Company’s Subsidiaries are unavailable or insufficient to pay such amounts, (B) draws under existing letters of credit in order to pay catastrophe (CAT) claims, (C) issuing or posting letters of credit as collateral for reinsurance arrangements and (D) Indebtedness incurred in connection with the refinancing upon expiration of the Company’s existing credit facilities;
(f) sell or lease to any Person, in a single transaction or series of related transactions, any of its owned properties or assets whose value or purchase price exceeds $1,000,000 individually or $5,000,000 in the aggregate, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer used or useful in the conduct of the business of the Company or any rightsof its Subsidiaries, warrants (B) transfers among the Company and its Subsidiaries, (C) leases and subleases of real property owned by the Company or options to acquireits Subsidiaries, any such shares (D) Company Investment Assets sold or other equity interestsleased in the ordinary course of business, or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive shares of capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including (E) pursuant to Contracts as in effect on the date hereof (other than the issuance of Class A Shares upon the exercise of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPP, in each case, that are outstanding on the date of this Agreement and Made Available to VMware and otherwise (or entered into after the date of this Agreement in accordance compliance with their terms as this Agreement) or (F) other transactions in effect on such date)the ordinary course of business or consistent with the Company Investment Guidelines;
(cg) amend (A) acquire any business or otherwise change, or authorize or propose to amend or otherwise change, its certificate of incorporation or bylaws (or similar organizational documents);
(d) directly or indirectly acquire or agree to acquire (i) by merging or consolidating with, purchasing a substantial equity interest in or a substantial portion of the assets of, making an investment in or loan or capital contribution to or in any other manner, any corporation, partnership, joint venture, association or other business organization or division thereof thereof, or (ii) substantially all of the assets of any assets that are otherwise material to Pivotal and its Subsidiariesof the foregoing, except, in each case, except for (1) capital expenditures which shall be subject to the limitations of clause (i) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes in the ordinary course of business consistent with Pivotal’s investment management policy, and except in the case of clause (ii), acquisitions of inventory, products or services Company Investment Assets acquired in the ordinary course of business; Table of Contents
(e) directly or indirectly sell, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien or otherwise dispose in whole or in part of any of its material properties, assets or rights (including any material Pivotal Intellectual Property Registrations) or any interest therein, except, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Out;
(f) adopt or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (iiB) make any loans, advances or capital contributions to, or investments in, any other Person, person (other than Pivotal or any direct or indirect wholly owned Subsidiary of Pivotal;
(ithe Company) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto that in the aggregate are in excess of $1,000,000;
(j) except as required by any judgment by a court of competent jurisdiction, (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A1) loans made in the paymentordinary course of business not to exceed $5,000,000 in the aggregate, discharge or satisfaction (2) advances for expenses incurred in the ordinary course of business, (B3) as relates to Company Investment Assets made in the ordinary course of business and (4) in connection with transactions permitted pursuant to Section 5.01(a)(viii);
(h) except as permitted under Section 5.01(a)(vii), make any acquisition (including by merger or amalgamation) of the share capital or capital stock or a material portion of the assets of any other Person, in each case for consideration that is individually in excess of $1,000,000, or in the aggregate of $5,000,000;
(i) except as required by their pursuant to the terms of any Company Plan as in effect on the date of this Agreement of claimsor applicable Law, liabilities (A) grant to any employee, director, officer or obligations reflected other service provider any increase in salary or reserved against bonus compensation opportunity (other than increases in base salary and corresponding increases in annual bonus opportunities for employees who do not participate in the most recent audited financial statements (or the notes thereto) of Pivotal included Company Severance Plan in the Pivotal SEC Documents filed prior ordinary course of business and consistent with past practice), (B) grant to the date hereof (for amounts not in excess of such reserves) or provide any employee, director, officer or other service provider any severance pay, retention or transaction bonuses or termination pay or benefits, (C) incurred since establish, adopt, enter into or amend any Company Plan or collective bargaining agreement in a manner that materially increases the date cost to the Company or any of such financial statements its Subsidiaries above current budgeted levels, (D) enter into or amend any employment, consulting, severance or termination plan, agreement or arrangement with any employee, director, officer or other service provider of the Company or any of its Subsidiaries or (E) take any action to accelerate the time of payment, vesting or funding of compensation or benefits under any Company Plan; provided, however, that the foregoing shall not restrict the Company or any of its Subsidiaries from (1) entering into or making available to newly hired employees or to current employees who are not officers or directors in the context of promotions based on job performance or workplace requirements, in each case, in the ordinary course of business, plans, agreements, benefits and compensation arrangements that have a value that is consistent with the past practice of making compensation and benefits available to newly hired or promoted employees in similar positions, or consistent with the compensation and benefits of the then-current employee whom such newly hired or promoted employee is engaged to replace or succeed (iiin each case, excluding equity-based and cash-based incentive grants, transaction or retention benefits, or change in control enhancements to severance entitlements), (2) cancel any material Indebtedness owed to Pivotal or taking any of its Subsidiariesthe foregoing actions to comply with, satisfy Tax-qualification requirements under, or (iii) waiveavoid the imposition of Tax under, releasethe Code and any applicable guidance thereunder, grant or transfer any right of material value;
(k) (i) materially modify, materially amend, terminate, cancel, waive any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) applicable Law or (ii3) enter into any Contract that if in effect on the date hereof would be a Material Contract, other than customer contracts entered into in the ordinary course of business;
(l) commence any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal or any of its Subsidiaries), or compromise, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements making immaterial changes in the ordinary course of business that involve only the payment of money damages not in excess of $500,000 individually or $2,000,000 in the aggregate, in any case without the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal or any of its Subsidiariesto nondiscriminatory health and welfare plans available to all employees generally;
(m) change its financial or Tax accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law;
(n) settle or compromise any material liability for Taxes or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liability; consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of a material amount of Taxes; grant any power of attorney with respect to material Taxes; enter into any Tax Sharing Agreement or any closing agreement or other similar agreement; or change any method of accounting for Tax purposes;
Appears in 1 contract
Conduct of Business. During (a) Except as expressly permitted by this Agreement, as required by applicable Law or as set forth in Section 5.2(a) of the Company Disclosure Schedule, during the period from the date of this Agreement to until the Reverse Merger Effective Time, except as consented to in writing in advance by VMware or as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) by this Agreement, Pivotal Company shall, and shall cause each of its Subsidiaries to, carry on (w) conduct its business in the ordinary coursecourse consistent with past practice, including its development (x) comply in all material respects with all applicable Laws and sales efforts as currently contemplatedthe requirements of all Material Contracts, and (y) use commercially reasonable efforts to (i) maintain and preserve intact its business organization, assets, rights organization and properties, (ii) keep available the goodwill of those having business relationships with it and retain the services of its current officerspresent officers and key employees, employees and consultants and (iii) preserve in each case, to the end that its goodwill and ongoing business shall be unimpaired at the Reverse Merger Effective Time, and (z) keep in full force and effect all material insurance policies maintained by the Company and its relationships with customersSubsidiaries, suppliers, licensors, licensees, distributors and others having material business dealings with itother than changes to such policies made in the ordinary course of business. In addition to and without Without limiting the generality of the foregoing, except as expressly permitted by this Agreement or as required by applicable Law or as set forth in Section 5.2(a) of the Company Disclosure Schedule, during the period from the date of this Agreement to the Reverse Merger Effective Time, except (x) as set forth in section 5.1 of the Pivotal Disclosure Letter, (y) as specifically required by this Agreement or (z) as specifically required by applicable Law, Pivotal Company shall not, and shall not permit any of its SubsidiariesSubsidiaries to, without VMware’s the prior written consent of Parent (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall such approval not to be unreasonably withheld, conditioned withheld or delayed, and in all other cases shall be in VMware’s sole discretion), to:):
(a) (i) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock or other equity interests, except for dividends by a wholly owned Subsidiary of Pivotal to Pivotal or any other wholly owned Subsidiary of Pivotal, (ii) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii) split, combine, reclassify or otherwise amend the terms of any of its capital stock or other equity 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 other equity interests;
(b) issue, deliver, sell, grant, dispose of, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) any shares of its capital stock stock, voting securities or other equity interests interests, or any securities or rights convertible into, exchangeable for or exercisable for, or evidencing the right to subscribe for any such shares of its capital stock, voting securities or other equity interests, or any rights, warrants warrants, options, calls, commitments or options any other agreements of any character to acquirepurchase or acquire any shares of its capital stock, voting securities or equity interests or any securities or rights convertible into, exchangeable or exercisable for, or evidencing the right to subscribe for, any such shares of its capital stock, voting securities or other equity interests, or any stock appreciation rightsprovided, “phantom” stock rights, performance units, rights to receive that the Company may issue shares of capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof (other than the issuance of Class A Shares Company Common Stock upon the exercise of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights options granted under the Pivotal ESPP, in each case, Company Stock Plans and Warrants that are outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with the terms thereof; (B) redeem, purchase or otherwise acquire any of its outstanding shares of capital stock, voting securities or equity interests, or any rights, warrants, options, calls, commitments or any other agreements of any character to acquire any shares of its capital stock, voting securities or equity interests; (C) declare, set aside for payment or pay any dividend on, or make any other distribution in respect of, any shares of its capital stock or otherwise make any payments to its stockholders in their terms capacity as such (other than dividends by a direct or indirect wholly owned Subsidiary of the Company to its parent); (D) split, combine, subdivide or reclassify any shares of its capital stock; or (E) amend (including by reducing an exercise price or extending a term) or waive any of its rights under, or accelerate the vesting under, any provision of the Company Stock Plans or any agreement evidencing any outstanding stock option or other right to acquire capital stock of the Company or any restricted stock purchase agreement or any similar or related contract, except such vesting as required pursuant to employment agreements in effect on such datethe date of this Agreement (correct and complete copies of which have been made available to Parent);
(cii) amend incur any indebtedness for borrowed money or otherwise change, or authorize or propose to amend or otherwise change, its certificate of incorporation or bylaws guarantee any indebtedness (or enter into a “keep well” or similar organizational documentsagreement);
, other than (dA) directly or indirectly acquire or agree to acquire (iborrowings by the Company in the ordinary course of business under the Company’s existing credit agreement listed in Section 3.13(a) by merging or consolidating with, purchasing a substantial equity interest in or a substantial portion of the assets of, making an investment in or loan or capital contribution to or in any other manner, any corporation, partnership, association or other business organization or division thereof or (ii) any assets that are otherwise material to Pivotal Company Disclosure Schedule and its Subsidiaries, except, in each case, for (1) capital expenditures which shall be subject guarantees of such borrowings issued by the Company’s Subsidiaries to the limitations extent required under the terms of clause (i) below such credit facility, and (2B) purchases borrowings from the Company by a direct or indirect wholly owned Subsidiary of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes the Company in the ordinary course of business consistent with Pivotalpast practice;
(iii) sell, transfer, lease, mortgage, encumber or otherwise dispose of or subject to any Lien (including pursuant to a sale-leaseback transaction or an asset securitization transaction) any of its properties or assets (including securities of Subsidiaries) to any Person, except (A) sales of Vessels used in the Company’s investment management policyoffshore supply vessel business in the ordinary course of business consistent with past practice, (B) pursuant to Contracts in force at the date of this Agreement and listed in Section 5.2(a)(iii) of the Company Disclosure Schedule, correct and complete copies of which have been made available to Parent, or (C) dispositions of obsolete or worthless assets;
(iv) make any unbudgeted capital expenditures (other than those covered by insurance), except in the case ordinary course of clause business consistent with past practice and in an amount not in excess of $1,000,000 in the aggregate for the Company and its Subsidiaries taken as a whole during any three- consecutive month period;
(ii)v) make any acquisition (by purchase of securities or assets, acquisitions merger or consolidation, or otherwise) of inventoryany other Person, products business or services division;
(vi) make any investment (by contribution to capital, property transfers, purchase of securities or otherwise) in, or loan or advance (other than travel and similar advances to its employees in the ordinary course of business consistent with past practice) to, any Person other than a direct or indirect wholly owned Subsidiary of the Company in the ordinary course of business; Table of Contents;
(evii) directly (A) enter into, terminate or indirectly sellamend any Material Contract, leaseor, licenseother than in the ordinary course of business consistent with past practice, sell any other Contract that is material to the Company and leasebackits Subsidiaries taken as a whole, abandon(B) enter into or extend the term or scope of any Contract that purports to restrict the Company, allow to lapseor any existing or future Subsidiary or Affiliate of the Company, mortgage or otherwise encumber or subject to from engaging in any Lien or otherwise dispose in whole line of business or in part any geographic area, (C) amend or modify the Engagement Letter, (D) enter into any Contract that would be breached by, or require the consent of any third party in order to continue in full force following, consummation of the Transactions, or (E) release any Person from, or modify or waive any provision of, any confidentiality, standstill or similar agreement;
(viii) increase in any manner the compensation of any of its material propertiesdirectors, assets officers or rights employees or enter into, establish, amend or terminate any employment, consulting, retention, change in control, collective bargaining, bonus or other incentive compensation, profit sharing, health or other welfare, stock option or other equity (including or equity-based), pension, retirement, vacation, severance, deferred compensation or other compensation or benefit plan, policy, agreement, trust, fund or arrangement with, for or in respect of, any material Pivotal Intellectual Property Registrationsstockholder, director, officer, other employee, consultant or Affiliate, other than (A) or any interest therein, except, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances as required to be effected prior to the Effective Time pursuant to existing Contracts that are not material applicable law or the terms of agreements in effect on the date of this Agreement set forth on Section 5.2(a)(viii) of the Company Disclosure Schedule (correct and complete copies of which have been made available to Pivotal and its Subsidiaries, taken as a whole Parent) and (iiB) Ordinary Course Licenses Outincreases in salaries, wages and benefits of employees (other than officers) made in the ordinary course of business and in amounts and in a manner consistent with past practice;
(fix) make or change any material election concerning Taxes or Tax Returns, file any amended Tax Return, enter into any closing agreement with respect to Taxes, settle any material Tax claim or assessment, consent to any extension or waiver of the limitation period applicable to any claim or assessment of Taxes or surrender any right to claim a refund of Taxes or obtain any Tax ruling;
(x) make any changes in financial or tax accounting methods, principles or practices (or change an annual accounting period), except insofar as may be required by a change in GAAP or applicable Law;
(xi) amend the Company Charter Documents or the Subsidiary Documents;
(xii) adopt or enter into a plan or agreement of complete or partial liquidation, dissolution, restructuring, recapitalization recapitalization, merger, consolidation or other reorganizationreorganization (other than transactions exclusively between wholly owned Subsidiaries of the Company);
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, other than Pivotal or any direct or indirect wholly owned Subsidiary of Pivotal;
(i) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto that in the aggregate are in excess of $1,000,000;
(j) except as required by any judgment by a court of competent jurisdiction, (ixiii) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment or prepayment of indebtedness of the Company reflected in the Filed Company SEC Documents or (B) the payment, discharge discharge, settlement or satisfaction in the ordinary course of business, (B) as required by business consistent with past practice or in accordance with their terms as in effect on the date of this Agreement of claimsother liabilities, liabilities claims or obligations reflected or reserved against in the most recent audited consolidated financial statements (or the notes thereto) of Pivotal the Company included in the Pivotal Filed Company SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements in the ordinary course of businessbusiness consistent with past practice;
(xiv) settle or compromise any litigation, proceeding or investigation material to the Company and its Subsidiaries taken as a whole (iithis covenant being in addition to the Company’s agreement set forth in Section 5.9 hereof);
(xv) cancel depart from any normal drydock and maintenance practices or discontinue replacement of spares in operating its fleet;
(xvi) defer any scheduled maintenance on any Vessel;
(xvii) enter into any charter for its Vessels which have a term of longer than 180 days at a fixed rate without the prior written consent of Parent (which consent shall not be unreasonably withheld); or
(xviii) agree, in writing or otherwise, to take any of the foregoing actions or take any action or agree, in writing or otherwise, to take any action, which would (A) cause any of the representations or warranties of the Company set forth in this Agreement (1) that are qualified as to materiality or Material Adverse Effect to be untrue or (2) that are not so qualified to be untrue in any material Indebtedness owed respect, or (B) impede or delay the ability of the parties to Pivotal satisfy any of the conditions to the Mergers set forth in this Agreement not being satisfied.
(b) Parent agrees that, during the period from the date of this Agreement until the Reverse Merger Effective Time, except as expressly contemplated or permitted by this Agreement or as required by applicable Law, and except as may be agreed in writing by the Company, Parent shall not, and shall not permit any of its SubsidiariesSubsidiaries to, or (iii) waive, release, grant or transfer any right of material value;
(k) (i) materially modifytake any action or agree, materially amendin writing or otherwise, terminateto take any action which would cause any of the representations or warranties of Parent, cancel, waive Merger Sub or LLC set forth in this Agreement (A) that are qualified as to materiality or Material Adverse Effect to be untrue or (B) that are not so qualified to be untrue in any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) respect or (ii) knowingly take any action or refrain from taking any action the result of which would be reasonably likely to prevent the consummation of the Mergers by the Walk-Away Date. Without limiting the generality of the foregoing, except as expressly permitted by this Agreement or as required by applicable Law or as set forth in Section 5.2(b) of the Parent Disclosure Schedule, during the period from the date of this Agreement to the Reverse Merger Effective Time, Parent will not and will not permit its Subsidiaries to, without the prior written consent of the Company (such approval not to be unreasonably withheld or delayed):
(i) enter into any Contract that if in effect on agreement for the date hereof acquisition of any business or Person which would be a Material Contract, other than customer contracts entered into require the filing of any financial statements with the SEC (applying the standard which would apply in the ordinary course case of businessa Form 8-K filing whether or not a Form 8-K is the form so filed) or that is reasonably likely to result in a delay to Closing, including by causing a delay of necessary governmental approvals or otherwise;
(lii) commence adopt or propose any Legal Proceeding material change in Parent’s certificate of incorporation or by laws or other applicable governing instruments or amend any term of the shares of Parent Common Stock;
(iii) merge or consolidate Parent or Merger Sub with any other Person or adopt a plan of liquidation;
(iv) enter into or acquire any new line of business that (i) is material to Parent and its Subsidiaries taken as a whole and (ii) is not strategically related to the current business or operations of Parent and its Subsidiaries or the Company and its Subsidiaries;
(v) except for shares of Parent Common Stock issued for fair value in arm’s length transactions and other than a Legal Proceeding as a result the issuance of a Legal Proceeding commenced against Pivotal or any of its Subsidiaries), or compromise, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements shares in the ordinary course of business that involve only consistent with past practices pursuant to Parent employee benefit plans, issue, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, encumber, or authorize the payment issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of money damages not in excess capital stock of $500,000 individually Parent or $2,000,000 in any its Subsidiaries (other than the aggregateissuance of shares by a wholly owned Subsidiary of Parent to the Company or another wholly owned Subsidiary), in or securities convertible or exchangeable into or exercisable for any case without the imposition shares of such capital stock, or any options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements, calls, commitments or other rights of any equitable relief onkind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(vi) declare, set aside or the admission of wrongdoing bypay any dividend or distribution (whether in cash, Pivotal stock or property or any combination thereof) on any shares of its Parent Common Stock or on any shares of capital stock of any Subsidiary, other than by wholly owned Subsidiaries and pro rata dividends or distributions payable to holders of interests in non wholly owned Subsidiaries;
(mvii) change reclassify, split, combine or subdivide, or repurchase, redeem or otherwise acquire at prices above fair market value, directly or indirectly, any of its financial capital stock or Tax accounting methods, principles securities convertible or practices, except insofar as may have been required by a change in GAAP exchangeable into or applicable Law;exercisable for any shares of its capital stock; or
(nviii) settle agree or compromise commit to do any material liability for Taxes or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liability; consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of a material amount of Taxes; grant any power of attorney with respect to material Taxes; enter into any Tax Sharing Agreement or any closing agreement or other similar agreement; or change any method of accounting for Tax purposes;foregoing.
Appears in 1 contract
Conduct of Business. During (a) Except as set forth in Section 6.01 of the period from the date of Company Disclosure Letter, contemplated, required or permitted by this Agreement to the Effective TimeAgreement, except as required by Law or consented to in writing in advance by VMware Parent (such consent not to be unreasonably withheld or as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) by this Agreement, Pivotal shall, and shall cause each of its Subsidiaries to, carry on its business in the ordinary course, including its development and sales efforts as currently contemplated, and use commercially reasonable efforts to (i) preserve intact its business organization, assets, rights and properties, (ii) keep available the services of its current officers, employees and consultants and (iii) preserve its goodwill and its relationships with customers, suppliers, licensors, licensees, distributors and others having material business dealings with it. In addition to and without limiting the generality of the foregoingdelayed), during the period from the date of this Agreement to the Effective Time, except the Company shall, and shall cause each of its Subsidiaries to, (x) carry on its business in the Ordinary Course of Business, (y) use reasonable best efforts to preserve substantially intact its current business organization and to preserve its relationships with significant Franchisees, customers, suppliers, licensors, licensees, distributors, wholesalers, lessors and others having significant business dealings with the Company or any of its Subsidiaries and (z) comply with Law, in each case consistent with past practice. Without limiting the generality of the foregoing, except as set forth in section 5.1 Section 6.01 of the Pivotal Company Disclosure Letter, (y) as specifically expressly contemplated or required by this Agreement or (z) as specifically Agreement, required by applicable LawLaw or consented to in writing by Parent (such 30 consent not to be unreasonably withheld or delayed), Pivotal during the period from the date of this Agreement to the Effective Time, the Company shall not, and shall not permit any of its Subsidiaries, without VMware’s prior written consent (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), Subsidiaries to:
(a) (i) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock or set any record date therefor, other equity interests, except for than (A) dividends or distributions by a direct or indirect wholly owned Subsidiary of Pivotal the Company to Pivotal or any other wholly owned Subsidiary its parent and (B) the payment of Pivotal, the First Quarter Dividend;
(ii) purchasesplit, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in lieu of or in substitution for shares of its capital stock;
(iii) repurchase, redeem or otherwise acquire any shares of its capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, warrants or other rights to acquire any such shares or other equity interestsshares, other than (A) the acquisition by the Company of shares of Company Common Stock in connection with the surrender of shares of Company Common Stock by holders of Company Stock Options in order to pay the exercise price of the Company Stock Options, (B) the withholding of Class A Shares shares of Company Common Stock to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Company Stock Plans and outstanding on the date of this Agreement or as permitted by this AgreementPlans, in accordance with their terms on the date of this Agreement and (BC) the acquisition by Pivotal the Company of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement Company Stock Options, Company RSUs, Company PSUs and Company DSUs in connection with the forfeiture of such awards, in accordance with their terms on and (D) the date acquisition by the trustee of this Agreement, or (iiithe Company 401(k) split, combine, reclassify or otherwise amend the terms Plan of any of its capital stock or other equity 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 other equity interestsCompany Common Stock in order to satisfy participant elections under the Company 401(k) Plan;
(biv) issue, deliver, sell, grant, pledge deliver or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) sell any shares of its capital stock or other voting securities or equity interests, any securities convertible or exchangeable into any such shares, voting securities or equity interests, any options, warrants or other rights to acquire any such shares, voting securities, equity interests or any securities convertible into, or exchangeable for or exercisable for any such shares or other equity interests, or any rights, warrants or options to acquiresecurities, any such shares or other equity interests, or any stock appreciation rights, “phantom” stock rights, stock-based performance units, any Voting Company Debt or any other rights that give any person the right to receive shares any economic interest of capital stock of VMware on a deferred basis or other rights linked nature accruing to the value holders of Class A Shares or Class B SharesCompany Common Stock, including pursuant to Contracts as in effect on the date hereof (other than the issuance of Class A Shares (A) upon the exercise of Pivotal Options, the or settlement of Pivotal RSUs or the exercise of purchase rights awards under the Pivotal ESPP, in each case, that are Company Stock Plans outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with their terms present terms, and (B) as required to comply with any Company Benefit Plan or Company Benefit Agreement as in effect on such date)the date of this Agreement;
(cv) (A) amend the Company Certificate of Incorporation or otherwise change, the Company By-Laws or authorize or propose to (B) amend or otherwise change, its certificate the comparable organizational documents of incorporation or bylaws (or similar organizational documents)any material Subsidiary of the Company;
(dvi) directly merge or indirectly acquire or agree to acquire (i) by merging or consolidating consolidate with, purchasing a substantial or purchase an equity interest in or a substantial portion of the assets of, making an investment any person or any division or business thereof, if the aggregate amount of the consideration paid or transferred by the Company and its Subsidiaries in connection with all such transactions would exceed $15 million, other than any such action solely between or loan or capital contribution to or in any other manner, any corporation, partnership, association or other business organization or division thereof or (ii) any assets that are otherwise material to Pivotal among the Company and its Subsidiaries;
(vii) sell, exceptlease, license, abandon or otherwise dispose of any of its properties or assets (including capital stock of any Subsidiary of the Company), other than (A) sales or other dispositions of inventory in the Ordinary Course of Business or equipment that is no longer used or useful in the operations of the Company or any of its Subsidiaries, (B) the licensing or sublicensing (or abandonment) of Intellectual Property in the Ordinary Course of Business, (C) leases and subleases of real property owned by the Company or its Subsidiaries and leases of real property under which the Company or any of its Subsidiaries is a tenant or a subtenant and voluntary terminations or surrenders of such leases, in each case, in the Ordinary Course of Business, and (D) other sales, leases or other dispositions for aggregate consideration of $15 million or less;
(viii) (A) incur any indebtedness for borrowed money, issue or sell any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any such indebtedness or any debt securities of another person or enter into any “keep well” or other agreement to maintain any financial statement condition of another person (collectively, “Indebtedness”), other than (1) capital expenditures which shall be subject to Indebtedness incurred, assumed or otherwise entered into in the limitations Ordinary Course of clause Business (iincluding any borrowings under the Company’s existing credit facilities and in respect of letters of credit) below and in no event in excess of $10,000,000 in the aggregate, (2) purchases Indebtedness incurred in connection with the refinancing of marketable securities by any Indebtedness existing on the date of this Agreement or permitted to be 31 incurred, assumed or otherwise entered into hereunder on behalf the same terms and conditions of Pivotal or its Subsidiaries for cash management purposes in the ordinary course of business consistent with Pivotal’s investment management policysuch Indebtedness, and except (3) intercompany Indebtedness, other than in the case of clause (ii1) or clause (2), acquisitions for such Indebtedness which would not permit compliance with, or would constitute a breach of inventorySection 7.09, products (B) make any loans or services capital contributions to, or investments in, any other person, other than (1) to any Subsidiary of the Company, (2) pursuant to clause (vi) above or (3) in the ordinary course Ordinary Course of business; Table Business, or (C) take any action that would not permit the administrative agent of Contentsthe lenders under the Debt Financing to have a perfected first priority security interest in the Debt Financing;
(eix) directly except (A) in the Ordinary Course of Business or indirectly sellas reasonably required by applicable Law, lease(B) as required pursuant to the terms of any Company Benefit Plan or Company Benefit Agreement or other written agreement disclosed to Parent in the Company Disclosure Letter, licensein each case in effect on the date of this Agreement, sell and leaseback(C) as otherwise expressly permitted by this Agreement or (D) as may be required to avoid adverse treatment under Section 409A of the Code without increasing any benefit or payment otherwise due or payable thereunder, abandon, allow to lapse, mortgage or otherwise encumber or subject (1) grant to any Lien director or otherwise dispose member of the Company Executive Team any increase in whole compensation, (2) grant to any director or member of the Company Executive Team any increase in part severance or termination pay, (3) enter into any employment, consulting, severance, retention or termination agreement with (x) any director or member of the Company Executive Team or (y) other employee pursuant to which the total annual compensation or the aggregate severance benefits under such agreement, solely in the case of this clause (y), in excess of $1,000,000 individually or $3,000,000 in the aggregate, (4) establish, adopt, enter into or amend in any material respect any material collective bargaining agreement or Company Benefit Plan or Company Benefit Agreement, or (5) take any action to accelerate any rights or benefits under any Company Benefit Plan or Company Benefit Agreement; provided, however, that the foregoing clauses (4) and (5) shall not restrict the Company or any of its material propertiesSubsidiaries from entering into or making available to newly hired employees or to employees in the context of promotions based on job performance or workplace requirements, assets other than any director or rights (including any material Pivotal Intellectual Property Registrations) or any interest therein, exceptmember of the Company’s Executive Team, in each casecase in the Ordinary Course of Business, plans, agreements, benefits and compensation arrangements (iincluding incentive grants) salesthat have a value that is consistent with the past practice of making compensation and benefits available to newly hired or promoted employees in similar positions;
(x) settle any claim or Litigation, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, in each case made or encumbrances required to be effected prior to pending against the Effective Time pursuant to existing Contracts that are not material to Pivotal and Company or any of its Subsidiaries, taken as a whole other than (A) the settlement of claims or Litigation in the Ordinary Course of Business that require payments by the Company or any of its Subsidiaries (net of insurance proceeds) in an amount not to exceed, individually or in the aggregate, $10,000,000 and (iiB) Ordinary Course Licenses Outthe settlement of claims or Litigation disclosed, reflected or reserved against in the most recent financial statements (or the notes thereto) of the Company included in the Filed SEC Documents for an amount not materially in excess of the amount so disclosed, reflected or reserved; provided, however, that the foregoing clauses (A) and (B) shall not permit the Company or any of its Subsidiaries to settle any claim or Litigation (x) that would impose any material restrictions or changes on the business or operations of the Company or any of its Subsidiaries or (y) for which such settlement is not permitted pursuant to Section 7.03(d).
(xi) make any material change in accounting methods, principles or practices by the Company or any of its Subsidiaries materially affecting the consolidated assets, liabilities or results of operations of the Company, except as required (A) by GAAP (or any interpretation thereof), including pursuant to standards, guidelines and interpretations of the Financial Accounting Standards Board or any similar organization, or (B) by Law, including Regulation S-X under the Securities Act;
(fxii) adopt or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganizationreorganization of the Company or any of its Subsidiaries (other than reorganizations solely among wholly owned Subsidiaries of the Company);
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (iixiii) make any loans, advances or capital contributions to, or investments in, any other Person, other than Pivotal or any direct or indirect wholly owned Subsidiary of Pivotal;
(i) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto that in the aggregate are in excess of $1,000,000;
(j) except as required by any judgment by a court of competent jurisdiction, (i) pay, dischargematerial tax election, settle or satisfy compromise any claimsmaterial tax liability for an amount that exceeds the amount disclosed, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge or satisfaction in the ordinary course of business, (B) as required by their terms as in effect on the date of this Agreement of claims, liabilities or obligations reflected or reserved against in the most recent audited financial statements consolidated balance sheet of the Company (or the notes thereto) of Pivotal included in the Pivotal Filed SEC Documents filed prior to the date hereof (Documents, change an annual 32 accounting period for amounts not in excess of such reserves) tax purposes, or (C) incurred since the date of such financial statements adopt or change any accounting method for tax purposes, other than in the ordinary course Ordinary Course of business, (ii) cancel any material Indebtedness owed to Pivotal or any of its Subsidiaries, or (iii) waive, release, grant or transfer any right of material valueBusiness;
(kxiv) (i) materially modifymake any capital expenditures, materially amend, terminate, cancel, waive any material right under or extend any Material Contract (other than renewals of Contracts (A) in accordance with customers of Pivotal Products the Company’s capital expenditure plan previously provided to Parent, and (B) otherwise in the ordinary course of businessan aggregate amount for all such capital expenditures made pursuant to this clause (B) or not to exceed $5 million; or
(iixv) enter into any Contract that if restricts the ability of the Company or any or its Subsidiaries, taken as a whole, to compete, in effect on the date hereof would any material respects, with any business or in any geographic area, or to solicit customers, except for use or radius restrictions that may be a Material Contract, other than customer contracts contained in Contracts entered into in the ordinary course Ordinary Course of businessBusiness;
(lxvi) commence (a) terminate or materially amend or modify any Legal Proceeding agreement set forth on Section 6.01(a)(xvi) of the Company Disclosure Letter or (other than a Legal Proceeding as a result b) enter into any Contract that would have been required to be set forth on the following Sections of a Legal Proceeding commenced against Pivotal or any of its Subsidiariesthe Company Disclosure Letter had such Contract been entered into prior to the date hereof: Section 4.09(a)(iii), Section 4.09(a)(v), Section 4.09(a)(vi) or compromiseSection 4.09(a)(viii);
(xvii) authorize any of, settle or commit or agree to settle take any Legal Proceedingof, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements the foregoing actions in the ordinary course of business that involve only the payment of money damages not in excess of $500,000 individually or $2,000,000 in the aggregate, in any case without the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal or any of its Subsidiaries;
preceding clause (mi) change its financial or Tax accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law;
— (n) settle or compromise any material liability for Taxes or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liability; consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of a material amount of Taxes; grant any power of attorney with respect to material Taxes; enter into any Tax Sharing Agreement or any closing agreement or other similar agreement; or change any method of accounting for Tax purposes;xvi).
Appears in 1 contract
Conduct of Business. During (a) Except as expressly permitted by this Agreement or as required by applicable Law, during the period from the date of this Agreement to until the Effective Time, except as consented to in writing in advance by VMware or as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) by this Agreement, Pivotal Company shall, and shall cause each of its Subsidiaries to, carry on (w) conduct its business in the ordinary coursecourse consistent with past practice, including its development (x) comply in all material respects with all applicable Laws and sales efforts as currently contemplatedthe requirements of all Material Contracts, and (y) use commercially reasonable efforts to (i) maintain and preserve intact its business organization, assets, rights organization and properties, (ii) keep available the goodwill of those having business relationships with it and retain the services of its current officerspresent officers and key employees, employees and consultants and (iii) preserve in each case, to the end that its goodwill and its relationships with customersongoing business shall be unimpaired at the Effective Time, suppliersand (z) keep in full force and effect all material Policies, licensors, licensees, distributors and others having material business dealings with itother than changes to such Policies made in the ordinary course of business. In addition to and without Without limiting the generality of the foregoing, except as expressly permitted by this Agreement or as required by applicable Law, during the period from the date of this Agreement to the Effective Time, except (x) as set forth in section 5.1 of the Pivotal Disclosure Letter, (y) as specifically required by this Agreement or (z) as specifically required by applicable Law, Pivotal Company shall not, and shall not permit any of its SubsidiariesSubsidiaries or, without VMware’s prior written consent (which consentto the fullest extent permitted under the Joint Venture Documents, in the cases any of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), Joint Ventures to:
(a) (i) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock or other equity interests, except for dividends by a wholly owned Subsidiary of Pivotal to Pivotal or any other wholly owned Subsidiary of Pivotal, (ii) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii) split, combine, reclassify or otherwise amend the terms of any of its capital stock or other equity 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 other equity interests;
(b) issue, deliver, sell, grant, dispose of, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) any shares of its capital stock stock, voting securities or other equity interests interests, or any securities or rights convertible into, exchangeable for or exercisable for, or evidencing the right to subscribe for any such shares of its capital stock, voting securities or other equity interests, or any rights, warrants warrants, options, calls, commitments or options any other agreements of any character to acquirepurchase or acquire any shares of its capital stock, voting securities or equity interests or any securities or rights convertible into, exchangeable or exercisable for, or evidencing the right to subscribe for, any such shares of its capital stock, voting securities or other equity interests, or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive provided that (x) the Company may issue shares of capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof (other than the issuance of Class A Shares Company Common Stock upon the exercise of Pivotal Options, the settlement of Pivotal RSUs Company Stock Options or the exercise vesting of purchase rights Stock Unit Awards granted under the Pivotal ESPP, in each case, Stock Incentive Plan that are outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with their the terms as in effect on such date);
(c) amend thereof or otherwise changepursuant to the Company’s profit sharing plan with its employees or agreement with VEBA, or authorize or propose pursuant to amend or otherwise change, its certificate of incorporation or bylaws (or similar organizational documents);
(dthe Company’s 401(k) directly or indirectly acquire or agree to acquire (iplans set forth in Section 3.11(a) by merging or consolidating with, purchasing a substantial equity interest in or a substantial portion of the assets ofCompany Disclosure Schedule, making an investment each in existence as of the date hereof and copies of which have been provided to Parent and (y) capital stock, voting securities or loan or capital contribution to or in any other manner, any corporation, partnership, association or other business organization or division thereof or (ii) any assets that are otherwise material to Pivotal and its Subsidiaries, except, in each case, for equity interests of the Company’s Subsidiaries may be (1) capital expenditures which shall be subject issued to the limitations of clause (i) below and (2) purchases of marketable securities by Company or on behalf of Pivotal or its Subsidiaries for cash management purposes in the ordinary course of business consistent with Pivotal’s investment management policy, and except in the case of clause (ii), acquisitions of inventory, products or services in the ordinary course of business; Table of Contents
(e) directly or indirectly sell, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien or otherwise dispose in whole or in part of any of its material properties, assets or rights (including any material Pivotal Intellectual Property Registrations) or any interest therein, except, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Out;
(f) adopt or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, other than Pivotal or any direct or indirect wholly owned Subsidiary of Pivotalthe Company and (2) pledged to the extent required under the Company’s existing credit agreement listed in Section 3.13(a) of the Company Disclosure Schedule; (B) redeem, purchase or otherwise acquire any of its outstanding shares of capital stock, voting securities or equity interests, or any rights, warrants, options, calls, commitments or any other agreements of any character to acquire any shares of its capital stock, voting securities or equity interests; (C) declare, set aside for payment or pay any dividend on, or make any other distribution in respect of, any shares of its capital stock or otherwise make any payments to its stockholders in their capacity as such (other than dividends by a direct or indirect wholly owned Subsidiary of the Company to its parent); (D) split, combine, subdivide or reclassify any shares of its capital stock; or (E) amend (including by reducing an exercise price or extending a term) or waive any of its rights under, or accelerate the vesting under, any provision of the Company Stock Plans or any agreement evidencing any outstanding Company Stock Option or other right to acquire capital stock of the Company or any restricted stock purchase agreement or any similar or related Contract;
(iii) incur or commit assume any indebtedness for borrowed money or guarantee any indebtedness (or enter into a “keep well” or similar agreement) or issue or sell any debt securities or options, warrants, calls or other rights to incur acquire any capital expenditure debt securities of the Company, any of its Subsidiaries or authorization or commitment with respect thereto that in any of the aggregate are in excess of $1,000,000;
(j) except as required by any judgment by a court of competent jurisdiction, (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise)Joint Ventures, other than (A) borrowings by the payment, discharge or satisfaction in the ordinary course of business, (B) as required by their terms as in effect on the date of this Agreement of claims, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements in the ordinary course of business, (ii) cancel any material Indebtedness owed to Pivotal or any of its Subsidiaries, or (iii) waive, release, grant or transfer any right of material value;
(k) (i) materially modify, materially amend, terminate, cancel, waive any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (ii) enter into any Contract that if in effect on the date hereof would be a Material Contract, other than customer contracts entered into in the ordinary course of business;
(l) commence any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal or any of its Subsidiaries), or compromise, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements Company in the ordinary course of business that involve only the payment of money damages in amounts not in excess of $500,000 individually or $2,000,000 475,000,000 in the aggregate, in aggregate outstanding at any case without time under the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal or any of its Subsidiaries;
(m) change its financial or Tax accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law;
(n) settle or compromise any material liability for Taxes or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liability; consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of a material amount of Taxes; grant any power of attorney with respect to material Taxes; enter into any Tax Sharing Agreement or any closing agreement or other similar agreement; or change any method of accounting for Tax purposes;Company’s existing credit agreements listed in
Appears in 1 contract
Conduct of Business. During (a) Except as set forth in Section 4.01 of the Company Disclosure Letter, contemplated or permitted by this Agreement, required by Law or consented to in writing by Investor Newco (such consent not to be unreasonably withheld, conditioned or delayed), during the period from the date of this Agreement to the Effective Time, except as consented to in writing in advance by VMware or as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) by this Agreement, Pivotal Company shall, and shall cause each of its Subsidiaries to, carry on its business in the ordinary coursecourse and, including its development and sales efforts as currently contemplatedto the extent consistent therewith, and use commercially reasonable efforts to (i) preserve substantially intact its current business organization, assets, rights and properties, (ii) to keep available the services of its current officers, officers and employees and consultants and (iii) to preserve its goodwill and its relationships with material customers, suppliers, licensors, licensees, distributors distributors, wholesalers, lessors and others having material business dealings with it. In addition to and without limiting the generality .
(b) Except as set forth in Section 4.01 of the foregoingCompany Disclosure Letter, contemplated or permitted by this Agreement, required by Law or consented to in writing by Investor Newco (such consent not to be unreasonably withheld, conditioned or delayed), during the period from the date of this Agreement to the Effective Time, except (x) as set forth in section 5.1 of the Pivotal Disclosure Letter, (y) as specifically required by this Agreement or (z) as specifically required by applicable Law, Pivotal Company shall not, and shall not permit any of its Subsidiaries, without VMware’s prior written consent (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), Subsidiaries to:
(ai) (iA) declare, set aside aside, or pay any dividends on, or make any other distributions (whether in cash, stock or property) in with respect ofto, any of its capital stock stock, other than regular quarterly cash dividends on Company Common Stock and dividends or other equity interests, except for dividends distributions by a direct or indirect wholly owned Subsidiary of Pivotal the Company to Pivotal the Company or any other another wholly owned Subsidiary of Pivotalthe Company, (ii) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii) split, combine, combine or reclassify or otherwise amend the terms of any of its capital stock or other equity 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 (C) purchase, redeem or otherwise acquire (1) any shares of its capital stock or other equity interestsvoting securities or, (2) any options, warrants, calls or rights to acquire, or any securities convertible into or exchangeable for, any such shares or voting securities (except upon the exercise of options, warrants, calls or rights disclosed in the Company Disclosure Letter to the extent net exercises are provided for in the plans or agreements governing such options, warrants, calls or rights);
(bii) issue, deliver, sell, grant, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) any shares of its capital stock or other equity interests voting securities or any securities convertible intooptions, exchangeable for warrants, calls or exercisable for rights to acquire any such shares or other equity interests, or any rights, warrants or options to acquire, any such shares or other equity interests, or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive shares of capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof (other than the issuance of Class A Shares upon the exercise of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPP, in each case, that are outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with their terms as in effect on such date)voting securities;
(ciii) amend the Company Certificate or otherwise change, the Company By-laws or authorize other comparable charter or propose to amend or otherwise change, organizational documents of any of its certificate of incorporation or bylaws (or similar organizational documents)Subsidiaries;
(div) directly merge or indirectly acquire or agree to acquire (i) by merging or consolidating consolidate with, purchasing a substantial or purchase an equity interest in all or a substantial portion substantially all of the assets of, making an investment in any Person or loan any division or capital contribution to or in any other manner, any corporation, partnership, association or other business organization or division thereof or (ii) any assets that are otherwise material to Pivotal and its Subsidiaries, except, in each case, for (1) capital expenditures which shall be subject to the limitations of clause (i) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes in the ordinary course of business consistent with Pivotal’s investment management policy, and except in the case of clause (ii), acquisitions of inventory, products or services in the ordinary course of business; Table of Contentsthereof;
(ev) directly or indirectly sell, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien lease or otherwise dispose in whole or in part of any of its material properties, real or personal properties or assets or rights (including capital stock of any material Pivotal Intellectual Property RegistrationsSubsidiary of the Company) that are material, individually or any interest thereinin the aggregate, except, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal Company and its Subsidiaries, taken as a whole whole, other than sales of inventory and (ii) Ordinary Course Licenses Outother assets in the ordinary course of business;
(fvi) adopt (A) incur any indebtedness for borrowed money, issue or enter into a plan of complete sell any debt securities or partial liquidation, dissolution, restructuring, recapitalization warrants or other reorganization;
rights to acquire any debt securities (gcollectively, “Indebtedness”) fail to maintainof the Company or any of its Subsidiaries or guarantee Indebtedness of another Person, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
other than (h1) (i) incur, create, assume Indebtedness incurred or otherwise become liable forassumed or entered into in the ordinary course of business under the Company’s or its Subsidiaries’ existing revolving credit facilities, the CIT Agreement, trade letters of credit or repayother existing arrangements, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance (2) Indebtedness incurred to finance capital expenditures permitted by clause (vii) below and (3) Indebtedness incurred in connection with the refinancing of any Indebtedness existing on the date of this Agreement or permitted to be incurred, assumed or otherwise entered into pursuant to this clause (vi) or (iiB) make any loans, advances loans or capital contributions to, or investments in, any other Person, other than Pivotal or any direct or indirect wholly owned Subsidiary as set forth on Section 4.01 of Pivotalthe Company Disclosure Letter;
(ivii) incur or commit to incur make any capital expenditure or authorization or commitment with respect thereto that in the aggregate are in excess of $1,000,000;
(j) except as required by any judgment by a court of competent jurisdiction, (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise)expenditures, other than (A) in connection with the payment, discharge repair or satisfaction in the ordinary course replacement of business, facilities destroyed or damaged due to casualty or accident (whether or not covered by insurance) or (B) otherwise in an aggregate amount for all such capital expenditures made pursuant to this clause (B) not to exceed $500,000;
(viii) enter into any Material Contract of a nature, or modify, amend or terminate any Material Contract to which the Company or any of its Subsidiaries is a party in a manner, that would be required to be filed as an exhibit to Form 10-K under the Exchange Act;
(ix) (A) grant any increase in compensation to any executive officer or director of the Company or any of its Subsidiaries, except (1) as required by their under the terms of a Company Benefit Agreement or Company Benefit Plan as in effect on the date of this Agreement or (2) for employment arrangements for, or grants of claimscompensatory awards to, liabilities promoted or obligations reflected newly hired employees, (B) enter into or reserved against in materially amend any Company Benefit Agreement with any executive officer or director of the most recent audited financial statements (Company or the notes thereto) any of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) its Subsidiaries or (C) incurred since the date of such financial statements adopt or amend in the ordinary course of business, (ii) cancel any material Indebtedness owed respect any Company Benefit Plan, except as required to Pivotal or any comply with the terms of its Subsidiaries, or (iii) waive, release, grant or transfer any right of material valueapplicable Laws;
(kx) (i) materially modify, materially amend, terminate, cancel, waive make any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products change in the ordinary course of business) or (ii) enter into any Contract that if in effect on the date hereof would be a Material Contract, other than customer contracts entered into in the ordinary course of business;
(l) commence any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal or any of its Subsidiaries), or compromise, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements in the ordinary course of business that involve only the payment of money damages not in excess of $500,000 individually or $2,000,000 in the aggregate, in any case without the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal or any of its Subsidiaries;
(m) change its financial or Tax accounting methods, principles or practicespractices that would materially affect the consolidated assets, liabilities or results of operations of the Company, except insofar (A) as may have been required by a change in GAAP (or applicable Law;any interpretation thereof) or Regulation S-X under the Securities Act, (B) as may be required by a change in Law or (C) as required by a Governmental Entity or quasi-governmental entity (including the Financial Accounting Standards Board or any similar organization); or
(nxi) settle or compromise authorize any material liability for Taxes or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax electionof, or change commit or agree in writing to take any of, the entity classification foregoing actions.
(c) Nothing contained in this Agreement shall give Family Newco, CCI or Investor Newco, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time, and nothing contained in this Agreement shall give the Company, directly or indirectly, the right to control or direct Family Newco’s, CCI’s or Investor Newco’s or their respective Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, each of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business Company, Family Newco, CCI and on a basis Investor Newco shall exercise, consistent with past practice that would materially the terms and adversely affect conditions of this Agreement, complete control and supervision over its Tax liability; consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of a material amount of Taxes; grant any power of attorney with respect to material Taxes; enter into any Tax Sharing Agreement or any closing agreement or other similar agreement; or change any method of accounting for Tax purposes;and its Subsidiaries’ respective operations.
Appears in 1 contract
Samples: Merger Agreement (Chaus Bernard Inc)
Conduct of Business. During the period from the date of this Agreement to the Effective Time, except Except as consented to in writing in advance by VMware or as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) contemplated by this Agreement, Pivotal shall, and shall cause each of its Subsidiaries to, carry on its business in the ordinary course, including its development and sales efforts as currently contemplated, and use commercially reasonable efforts to (i) preserve intact its business organization, assets, rights and properties, (ii) keep available the services of its current officers, employees and consultants and (iii) preserve its goodwill and its relationships with customers, suppliers, licensors, licensees, distributors and others having material business dealings with it. In addition to and without limiting the generality of the foregoing, during the period from the date of this Agreement to the Effective TimeClosing Date, Seller will cause the Company to conduct its business and operations according to its ordinary and usual course of business consistent with past practices. Without limiting the generality of the foregoing, and, except (x) as set forth otherwise expressly provided in section 5.1 of the Pivotal Disclosure Letter, (y) as specifically required by this Agreement or (z) as specifically required by applicable Lawotherwise disclosed on the Disclosure Schedule, Pivotal shall not, and shall not permit any of its Subsidiariesprior to the Closing Date, without VMware’s the prior written consent (which consentof Buyer, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall not to be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), Seller will cause the Company not to:
(a) (i) declare, set aside amend its certificate of incorporation or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock or other equity interests, except for dividends by a wholly owned Subsidiary of Pivotal to Pivotal or any other wholly owned Subsidiary of Pivotal, (ii) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii) split, combine, reclassify or otherwise amend the terms of any of its capital stock or other equity 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 other equity interestsbylaws;
(b) issue, deliverreissue, sell, grant, deliver or pledge or otherwise encumber authorize or subject to any Lien (other than transfer restrictions propose the issuance, reissuance, sale, delivery or pledge of general applicability as may be provided under the Securities Act or other applicable securities Laws) any shares of its capital stock of any class, or other equity interests or any securities convertible into, exchangeable for or exercisable for into capital stock of any such shares or other equity interestsclass, or any rights, warrants or options to acquireacquire any convertible securities or capital stock, any such shares or other equity interests, or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive shares of capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof (other than the issuance of Class A Shares upon directors' qualifying shares, if required, to the exercise of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPP, in each case, that are outstanding three directors taking office on the date of this Agreement and Made Available to VMware and otherwise in accordance with their terms as in effect on such date)Closing Date;
(c) amend adjust, split, combine, subdivide, reclassify or redeem, purchase or otherwise changeacquire, or authorize or propose to amend redeem or purchase or otherwise changeacquire, any shares of its certificate capital stock, or any of incorporation or bylaws (or similar organizational documents)its other securities;
(d) declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, redeem or otherwise acquire any shares of its capital stock or other securities, alter any term of any of its outstanding securities;
(e) hire any additional personnel;
(g) incur, assume, suffer or become subject to, whether directly or indirectly acquire by way of guarantee or agree otherwise, any Liabilities, except for services or costs required to acquire complete the Transaction Documents and all of which Liabilities shall be paid by Seller;
(h) make or enter into any commitment for capital expenditures;
(i) by merging pay, lend or consolidating advance any amount to, or sell, transfer or lease any properties or assets (real, personal or mixed, tangible or intangible) to, or enter into any agreement or arrangement with, purchasing a substantial equity interest in any of its officers or a substantial portion directors or any affiliate or associate of the assets ofany of its officers or directors;
(j) terminate, making an investment in enter into or loan or capital contribution to or amend in any other mannermaterial respect any contract, agreement, lease, license or commitment, or take any corporationaction or omit to take any action which will cause a breach, partnershipviolation or default (however defined) under any contract, association or other business organization or division thereof or (ii) any assets that are otherwise material to Pivotal and its Subsidiaries, except, in each case, for (1) capital expenditures which shall be subject to the limitations of clause (i) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes except in the ordinary course of business and consistent with Pivotal’s investment management policy, and except in the case of clause (ii), acquisitions of inventory, products or services in the ordinary course of business; Table of Contents
(e) directly or indirectly sell, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien or otherwise dispose in whole or in part of any of its material properties, assets or rights (including any material Pivotal Intellectual Property Registrations) or any interest therein, except, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Out;
(f) adopt or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, other than Pivotal or any direct or indirect wholly owned Subsidiary of Pivotal;
(i) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto that in the aggregate are in excess of $1,000,000;
(j) except as required by any judgment by a court of competent jurisdiction, (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge or satisfaction in the ordinary course of business, (B) as required by their terms as in effect on the date of this Agreement of claims, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements in the ordinary course of business, (ii) cancel any material Indebtedness owed to Pivotal or any of its Subsidiaries, or (iii) waive, release, grant or transfer any right of material valuepast practice;
(k) (i) materially modify, materially amend, terminate, cancel, waive acquire any material right under of the business or extend assets of any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) person or (ii) enter into any Contract that if in effect on the date hereof would be a Material Contract, other than customer contracts entered into in the ordinary course of businessentity;
(l) commence permit any Legal Proceeding of its current insurance (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal or reinsurance) policies to be cancelled or terminated or any of its Subsidiaries)the coverage thereunder to lapse, unless simultaneously with such termination, cancellation or compromiselapse, settle replacement policies providing coverage equal to or agree to settle any Legal Proceedinggreater than coverage remaining under those cancelled, terminated or lapsed are in full force and effect;
(m) enter into other than Transaction Litigation which is subject to section 5.7)material agreements, compromises, settlements commitments or agreements contracts not in the ordinary course of business that involve only the payment of money damages not or in excess of $500,000 individually or $2,000,000 in the aggregate, in any case without the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal or any of its Subsidiaries;
(m) change its financial or Tax accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Lawcurrent requirements;
(n) settle or compromise any material liability for Taxes suit, claim or surrender dispute, or threatened suit, claim or dispute (other than any settlement or compromise having no effect upon the Company, its assets, operations or financial position); or
(o) agree in writing or otherwise to take any of the foregoing actions or any action which would make any representation or warranty in this Agreement untrue or incorrect in any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liability; consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of a material amount of Taxes; grant any power of attorney with respect to material Taxes; enter into any Tax Sharing Agreement or any closing agreement or other similar agreement; or change any method of accounting for Tax purposes;respect.
Appears in 1 contract
Samples: Securities Purchase Agreement (Hirsch Capital CORP)
Conduct of Business. (a) During the period from the date of this Agreement to through the Effective Timeearlier of the Closing and the termination of this Agreement, except as consented to required by applicable Law, as required or contemplated by the terms of this Agreement or as described in Section 6.01(a) of the Company Disclosure Letter, unless Parent otherwise consents in writing in advance by VMware (such consent not to be unreasonably withheld, conditioned or as otherwise expressly required or prohibited delayed), (including by w) the restrictions set forth in subclauses (a) through (r) below) by this Agreement, Pivotal Company shall, and shall cause each of its Subsidiaries to, carry on its business in all material respects in the ordinary coursecourse of business consistent with past practice, including its development and sales efforts as currently contemplated(x) to the extent consistent with clause (w), the Company shall, and shall cause each of its Subsidiaries to, use commercially reasonable best efforts to (i) preserve intact its business organization, assets, rights and properties, (ii) keep available the services each of its current Subsidiaries’ business organizations substantially intact and preserve existing relationships with key customers, brokers, reinsurance providers, regulators, officers, employees and consultants other Persons with whom the Company or any of its Subsidiaries have significant business relationships, in each case, consistent with past practice and (iii) preserve its goodwill and its relationships with customers, suppliers, licensors, licensees, distributors and others having material business dealings with it. In addition to and without limiting the generality of the foregoing, during the period from the date of this Agreement to the Effective Time, except (x) as set forth in section 5.1 of the Pivotal Disclosure Letter, (y) as specifically required by this Agreement or (z) as specifically required by applicable Law, Pivotal the Company shall not, and shall not permit any of its Subsidiaries, without VMware’s prior written consent Subsidiaries to (which consent, in it being understood that no act or omission by the cases Company or any of its Subsidiaries with respect to the matters set forth in subclauses specifically addressed by any provision of this clause (e), y) below shall be deemed to be a breach of clause (g), (i), (jw) or (k) below shall not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretionx), to:):
(a) (i) declareissue, set aside sell or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, grant any of its capital stock shares or other equity interestsor voting interests of the Company, except for dividends by a wholly owned Subsidiary of Pivotal to Pivotal or any other wholly owned Subsidiary of Pivotalsecurities or rights convertible into, (ii) purchaseexchangeable or exercisable for, redeem or otherwise acquire evidencing the right to subscribe for any shares of capital stock or other equity or voting interests of Pivotal the Company or any of its Subsidiaries Subsidiaries, or any options, warrantsrights, warrants or other commitments or agreements to acquire from the Company or any of its Subsidiaries, or rights that obligate the Company or any of its Subsidiaries to acquire issue, any such shares share capital of, or other equity interestsor voting interests in, or any securities convertible into or exchangeable for shares of, or other than (A) equity or voting interests in, the withholding Company or any of Class A its Subsidiaries; provided that the Company may issue Company Shares to satisfy tax obligations with respect to awards granted or other securities as required pursuant to the Pivotal Stock Plans and vesting, settlement or exercise of Company Awards or Company Rights (1) outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their the terms on of the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options applicable Company Award or Pivotal RSUs Company Right in effect on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on (2) granted after the date of this Agreement in accordance with this Agreement; provided further that the Subsidiaries of the Company may make any such issuances, sales or (iii) split, combine, reclassify grants to the Company or otherwise amend a direct or indirect wholly owned Subsidiary of the terms of any of its capital stock or other equity 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 other equity interestsCompany;
(bii) issueredeem, deliver, sell, grant, pledge purchase or otherwise encumber or subject to acquire any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) any shares of its capital stock or other equity interests or any securities convertible into, exchangeable for or exercisable for any such outstanding shares or other equity interests, or voting interests of the Company or any of its Subsidiaries or any rights, warrants or options to acquireacquire any shares of the Company or any of its Subsidiaries or other equity or voting interests of the Company or any of its Subsidiaries, except (A) pursuant to the Company Plans or the Company Awards (including, for the avoidance of doubt, in connection with the forfeiture of any Company Awards or the satisfaction of any per share exercise price related to any Company Awards) or (B) in connection with the satisfaction of Tax withholding obligations with respect to any Company Awards;
(iii) establish a record date for, declare, set aside for payment or pay any dividend on, or make any other distribution in respect of, any such shares or other equity interests, or voting interests of the Company or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive shares of capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof (other than the issuance of Class A Shares upon the exercise of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPPits Subsidiaries, in each case, that are outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with their terms as in effect on such date);
(c) amend or otherwise change, or authorize or propose to amend or otherwise change, its certificate of incorporation or bylaws (or similar organizational documents);
(d) directly or indirectly acquire or agree to acquire (i) by merging or consolidating with, purchasing a substantial equity interest in or a substantial portion of the assets of, making an investment in or loan or capital contribution to or in any other manner, any corporation, partnership, association or other business organization or division thereof or (ii) any assets that are otherwise material to Pivotal and its Subsidiaries, except, in each case, for (1) capital expenditures which shall be subject to the limitations of clause (i) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes in the ordinary course of business consistent with Pivotal’s investment management policy, and except in the case of clause (ii), acquisitions of inventory, products or services in the ordinary course of business; Table of Contents
(e) directly or indirectly sell, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien or otherwise dispose in whole or in part of any of its material properties, assets or rights (including any material Pivotal Intellectual Property Registrations) or any interest therein, except, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Out;
(f) adopt or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, other than Pivotal or any direct or indirect wholly owned Subsidiary of Pivotal;
(i) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto that in the aggregate are in excess of $1,000,000;
(j) except as required by any judgment by a court of competent jurisdiction, (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) quarterly cash dividends paid by the paymentCompany on the Company Shares not in excess of $0.22 per share, discharge or satisfaction per quarter, with record and payment dates generally consistent with the timing of record and payment dates in the ordinary course most recent comparable prior year fiscal quarter prior to the date of businessthis Agreement, (B) as periodic cash dividends paid by the applicable Subsidiary of the Company on preferred shares outstanding on the date hereof in an amount not in excess of the amounts required by their terms as the applicable bye-laws, certificate of designation or authorizing resolutions for such preferred shares, with record and payment dates generally consistent with the timing of record and payment dates in effect on the most recent comparable prior year fiscal quarter prior to the date of this Agreement of claims, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements in the ordinary course of business, (ii) cancel any material Indebtedness owed to Pivotal or any of its Subsidiaries, or (iii) waive, release, grant or transfer any right of material value;
(k) (i) materially modify, materially amend, terminate, cancel, waive any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (ii) enter into any Contract that if in effect on the date hereof would be a Material Contract, other than customer contracts entered into in the ordinary course of business;
(l) commence any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal or any of its Subsidiaries), or compromise, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements in the ordinary course of business that involve only the payment of money damages not in excess of $500,000 individually or $2,000,000 in the aggregate, in any case without the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal or any of its Subsidiaries;
(m) change its financial or Tax accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law;
(n) settle or compromise any material liability for Taxes or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liability; consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of a material amount of Taxes; grant any power of attorney with respect to material Taxes; enter into any Tax Sharing Agreement or any closing agreement or other similar agreement; or change any method of accounting for Tax purposes;and
Appears in 1 contract
Samples: Merger Agreement (Xl Group LTD)
Conduct of Business. During the period from From the date of this Agreement through the earlier of the Closing or valid termination of this Agreement pursuant to Article X (the Effective Time“Interim Period”), except as consented to in writing in advance by VMware or as otherwise expressly required or prohibited (including by Inpixon and the restrictions set forth in subclauses (a) through (r) below) by this Agreement, Pivotal Company shall, and shall cause each of its the Company Subsidiaries to, carry on its business except as otherwise explicitly contemplated by this Agreement or the Ancillary Agreements or required by Law or as consented to by Acquiror in writing, use reasonable best efforts to (x) operate the Enterprise Apps Business in the ordinary course, including its development course consistent with past practice and sales efforts as currently contemplated, and use commercially reasonable efforts to (iy) preserve intact its the Company and the Company Subsidiaries’ present business organization, assets, rights retain the Company and properties, (ii) keep available the services of its Company Subsidiaries’ current officers, employees and consultants and (iii) preserve its goodwill and its the Business Entities’ relationships with customers, suppliers, licensors, licensees, distributors its key suppliers and others having material business dealings with itcustomers (if applicable). In addition to and without Without limiting the generality of the foregoing, during the period from the date of this Agreement to the Effective Time, except (x) as set forth in section 5.1 on Section 6.1 of the Pivotal Company Disclosure LetterLetter or as consented to by Acquiror in writing Inpixon and the Company shall not, (y) and Inpixon and the Company shall cause the Company Subsidiaries not to, except as specifically required otherwise contemplated by this Agreement or (z) as specifically the Ancillary Agreements or required by applicable Law, Pivotal shall not, and shall not permit any of its Subsidiaries, without VMware’s prior written consent (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), to:
(a) change or amend the Governing Documents of the Company or any of the Company Subsidiaries or form or cause to be formed any new Company Subsidiary;
(ib) declare, set aside make or pay declare any dividends on, dividend or distribution to the stockholders of the Company or make any other distributions (whether in cash, stock or property) in respect of, of any of its the Company Common Stock or equity interests of the Company or any of the Company Subsidiaries;
(c) split, combine, reclassify, recapitalize or otherwise amend any terms of any shares or series of the Company’s or any of the Company Subsidiaries’ capital stock or other equity interests, except for dividends any such transaction by a wholly wholly-owned Company Subsidiary that remains a wholly-owned Company Subsidiary after consummation of Pivotal to Pivotal or any other wholly owned Subsidiary of Pivotal, such transaction;
(iid) purchase, repurchase, redeem or otherwise acquire any issued and outstanding share capital, outstanding shares of capital stock stock, membership interests or other equity interests of Pivotal the Company or its Subsidiaries or any optionsthe Company Subsidiaries, warrants, or rights to acquire any such shares or other equity interests, other than except for (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (Bi) the acquisition by Pivotal the Company or any of Pivotal Options the Company Subsidiaries of any shares of capital stock, membership interests or Pivotal RSUs on other equity interests of the date of this Agreement Company or as permitted by this Agreement the Company Subsidiaries in connection with the forfeiture or cancellation of such awardsinterests, in accordance with their terms on including, for the date avoidance of this Agreementdoubt, or (iii) split, combine, reclassify or otherwise amend redemptions of equity securities from former employees upon the terms of set forth in the underlying agreements governing such equity securities, and (ii) transactions between the Company any of its capital stock wholly-owned Company Subsidiary or other equity 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 other equity interestsbetween wholly-owned Company Subsidiaries;
(be) issue, deliver, sell, grant, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) any shares of its capital stock or other equity interests or any securities convertible enter into, exchangeable for modify in any material respect or exercisable for terminate any such shares or other equity interestsContract of a type required to be listed on Section 4.13(a) of the Company Disclosure Letter, or any rights, warrants or options to acquire, any such shares or other equity interests, or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive shares of capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof (other than the issuance of Class A Shares upon the exercise of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPP, in each case, that are outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with their terms as in effect on such date);
(c) amend or otherwise change, or authorize or propose to amend or otherwise change, its certificate of incorporation or bylaws (or similar organizational documents);
(d) directly or indirectly acquire or agree to acquire (i) by merging or consolidating with, purchasing a substantial equity interest in or a substantial portion of the assets of, making an investment in or loan or capital contribution to or in any other manner, any corporation, partnership, association or other business organization or division thereof Real Property Lease or (ii) waive, release or assign any rights under any Contract of a type required to be listed on Section 4.13(a) of the Company Disclosure Letter, or any Real Property Lease;
(f) sell, assign, transfer, convey, lease or otherwise dispose of any material portion of tangible assets that are otherwise material to Pivotal and its Subsidiariesor properties of the Business Entities, except, in each case, except for (1) capital expenditures which shall be subject to the limitations of clause (i) below dispositions of obsolete or worthless equipment, (ii) transactions among the Company and its wholly-owned Subsidiaries or among its wholly-owned Subsidiaries and (2iii) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes transactions in the ordinary course of business consistent with Pivotal’s investment management policypast practice;
(g) acquire any ownership interest in any real property to be owned or held by the Company or any Company Subsidiary;
(h) except as otherwise required by Law, and except existing Benefit Plans in effect as of the date hereof or the Contracts listed on Section 4.13(a) of the Company Disclosure Letter, (i) grant or adopt or enter into any arrangement for any severance, retention, change in control or termination or similar pay, (ii) make any change in the case key management structure of clause the Company or any of the Company Subsidiaries, including the hiring or termination of any employees (ii), acquisitions of inventory, products or services including any individual who would be a Business Employee) in the ordinary course of business; Table business consistent with past practice with an annual base salary of Contents
$100,000 or more, other than terminations for cause or due to death or disability, (eiii) directly or indirectly sell, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien or otherwise dispose in whole transfer (including through internal job postings or in part response to a request to transfer by an employee) the employment of, reassign or reallocate the duties or responsibilities of any Business Employee such that the individual would not be a Business Employee at Closing, (iv) transfer the engagement of an individual independent contractor of Inpixon or any of its material propertiesAffiliates into or out of the Enterprise Apps Business, assets (v) terminate, adopt, enter into or rights amend any Benefit Plan or any compensation or benefit plan, program, agreement or arrangement that would be a Benefit Plan if in effect as of the date hereof, (vi) increase the compensation, or benefits of any employee, officer, director or other individual service provider, including any material Pivotal Intellectual Property RegistrationsBusiness Employee, (vii) establish any trust or take any other action to secure the payment of any compensation payable by the Company or any interest thereinof the Company Subsidiaries (viii) take any action to amend or waive any performance or vesting criteria or to accelerate the time of vesting or payment of any compensation or benefit payable to any Business Employee or (ix) grant any stock options, exceptstock appreciation rights, restricted stock, restricted stock units, other equity or equity-based awards covering or convertible into any shares of other equity interests in the Company or any of the Company Subsidiaries or other equity interests of the Company or any of the Company Subsidiaries, the value of which is determined by reference to shares or other equity interests of the Company or any of the Company Subsidiaries;
(i) acquire by merger or consolidation with, or merge or consolidate with, or purchase substantially all or a material portion of the assets of, any corporation, partnership, association, joint venture or other business organization or division thereof to be part of the assets of the Business Entities;
(i) issue or sell any debt securities or warrants or other rights to acquire any debt securities of the Company or any Company Subsidiary or otherwise incur or assume any Indebtedness, or (ii) allow the Company or any Company Subsidiary to guarantee any Indebtedness of another Person, the sum of (i) and (ii) not to be in excess of $250,000 in the aggregate, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Out;
(f) adopt or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, other than Pivotal or any direct or indirect wholly owned Subsidiary of Pivotal;
(i) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto that in the aggregate are in excess of $1,000,000;
(j) except as required by any judgment by a court of competent jurisdiction, (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (Ax) the payment, discharge or satisfaction in the ordinary course of business, business consistent with past practice and (By) as required by their terms as in effect on between the date of this Agreement of claims, liabilities or obligations reflected or reserved against in Company and the most recent audited financial statements (or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements in the ordinary course of business, (ii) cancel any material Indebtedness owed to Pivotal or any of its Company Subsidiaries, or (iii) waive, release, grant or transfer any right of material value;
(k) (i) materially modify, materially amend, terminate, cancel, waive make or change any material right under or extend any Material Contract (other than renewals election in respect of Contracts with customers of Pivotal Products in the ordinary course of business) or material Taxes, (ii) materially amend any filed material Tax Return, (iii) adopt or request permission of any taxing authority to change any accounting method in respect of material Taxes, (iv) enter into any Contract that if “closing agreement” as described in effect Section 7121 of the Code (or any similar provision of state, local, or foreign Law) with any Governmental Authority in respect of material Taxes executed on or prior to the date hereof would be a Material Contract, Closing Date or enter into any Tax sharing or similar agreement (other than customer contracts any such agreement solely between the Company and its existing Subsidiaries and customary commercial Contracts (or Contracts entered into in the ordinary course of business;
(l) commence any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal or any of its Subsidiariesnot primarily related to Taxes), or compromise, settle or agree to (v) settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements claim or agreements assessment in the ordinary course respect of business that involve only the payment of money damages not in excess of $500,000 individually or $2,000,000 in the aggregate, in any case without the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal or any of its Subsidiaries;
(m) change its financial or Tax accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law;
(n) settle or compromise any material liability for Taxes or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liability; (vi) consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of material Taxes;
(l) take any action, or knowingly fail to take any action, where such action or failure to act could reasonably be expected to prevent the Merger from qualifying for the Intended Tax Treatment;
(m) discharge any secured or unsecured obligation or liability of the Business Entities (whether accrued, absolute, contingent or otherwise) which individually or in the aggregate exceed $750,000, except as such obligations become due;
(n) issue any additional shares of Company Capital Stock or securities exercisable for or convertible into Company Capital Stock;
(o) adopt a plan of, or otherwise enter into or effect a, complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of the Company or the Company Subsidiaries (other than the Merger);
(p) waive, release, settle, compromise or otherwise resolve any inquiry, investigation, claim, Action, litigation or other Legal Proceedings relating to the Business Entities, except in the ordinary course of business or where such waivers, releases, settlements or compromises involve only the payment of monetary damages in an amount less than $500,000 in the aggregate;
(q) assign, transfer, pledge, sell or license to any Person rights to any material amount Company IP , or dispose of, abandon, permit to lapse or fail to preserve any rights to any material Company IP, except for the expiration of TaxesCompany Registered IP in accordance with the applicable statutory term or for the grant of non-exclusive licenses in the ordinary course of business, consistent with past practice;
(r) deliver, license or make available to any escrow agent or other Person source code for any software (including Company Products) owned or purported to be owned by the Business Entities;
(s) modify in any material respect any of the privacy policies, or any administrative, technical or physical safeguards related to privacy or cybersecurity, except (A) to remediate any security issue, (B) to enhance data security or integrity, (C) to comply with applicable Law, or (D) as otherwise directed or required by a Governmental Authority;
(t) disclose or agree to disclose to any Person (other than Acquiror or any of its representatives) any trade secret or any other material confidential or proprietary information, know-how or process of the Business Entities other than in the ordinary course of business consistent with past practice and pursuant to reasonable and customary obligations to maintain the confidentiality and restrict the use thereof;
(u) make or commit to make any capital expenditures relating to the Business Entities;
(v) manage the Company’s and the Company Subsidiaries’ working capital (including paying amounts payable in a timely manner when due and payable) in a manner other than in the ordinary course of business consistent with past practice;
(w) other than as required by applicable Law, modify, enter into or extend any collective bargaining agreement or any other labor-related agreements or arrangements with any labor union, labor organization, works council or group of employees of the Business Entities, or recognize or certify any labor union, labor organization, works council or group of employees of the Business Entities as the bargaining representative for Business Employees;
(x) terminate without replacement or fail to use reasonable efforts to maintain any License material to the conduct of the business of the Business Entities, taken as a whole;
(y) waive the restrictive covenant obligations of any current or former officer, director, employee or independent contractor of the Business Entities; (i) limit the right of the Business Entities to engage in any line of business or in any geographic area, to develop, market or sell products or services, or to compete with any Person or (ii) grant any power exclusive rights to any Person, in each case, except where such limitation or grant does not, and would not be reasonably likely to, individually or in the aggregate, materially and adversely affect, or materially disrupt, the ordinary course operation of attorney with respect the businesses of the Business Entities, taken as a whole;
(z) terminate without replacement or amend in a manner materially detrimental to material Taxesthe Company and the Company Subsidiaries, taken as a whole, any insurance policy insuring the business of the Company or any of the Company Subsidiaries;
(aa) change, modify, amend or terminate the Separation and Distribution Agreement, the Employee Matters Agreement, the Tax Matters Agreement, the Contribution Agreement, or the Transition Services Agreement, including any schedule thereto;
(bb) enter into, change, modify, amend or terminate any Contract relating to the Internal Reorganization or the Conveyancing and Assumption Agreements (each as defined in the Separation and Distribution Agreement); or
(cc) enter into any Tax Sharing Agreement or agreement to do any closing agreement or other similar agreement; or change any method of accounting for Tax purposes;action prohibited under this Section 6.1.
Appears in 1 contract
Samples: Merger Agreement (Inpixon)
Conduct of Business. During (a) Except as expressly contemplated or permitted by this Agreement or as required by applicable Law, during the period from the date of this Agreement to until the Effective TimePurchase Date, except as consented to or the earlier termination of this Agreement in writing accordance with Article V unless Purchaser otherwise agrees in advance by VMware or as otherwise expressly required or prohibited (including by writing, the restrictions set forth in subclauses (a) through (r) below) by this Agreement, Pivotal Company shall, and shall cause each of its Subsidiaries subsidiaries to, carry on (w) conduct its business in the ordinary coursecourse consistent with past practice, including its development (x) comply in all material respects with all applicable Laws and sales efforts as currently contemplatedthe requirements of all Material Contracts, and (y) use commercially reasonable efforts to (i) maintain and preserve intact its business organization, assets, rights organization and properties, (ii) keep available the goodwill of those having business relationships with it and retain the services of its current officerspresent officers and key employees, employees in each case, to the end that such goodwill and consultants ongoing business shall be unimpaired at the Purchase Date and (iiiz) preserve its goodwill keep in full force and effect all material insurance policies maintained by the Company and its relationships with customerssubsidiaries, suppliers, licensors, licensees, distributors and others having material business dealings with itother than changes to such policies made in the ordinary course. In addition to and without Without limiting the generality of the foregoing, except (i) as expressly contemplated or permitted by this Agreement, (ii) as set forth on Section 4.1 of the Company Disclosure Schedule, or (iii) as required by applicable Laws, during the period from the date of this Agreement to the Effective TimePurchase Date, except (x) as set forth in section 5.1 of the Pivotal Disclosure Letter, (y) as specifically required by this Agreement or (z) as specifically required by applicable Law, Pivotal Company shall not, and shall not permit any of its Subsidiariessubsidiaries to, without VMware’s the prior written consent (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), toPurchaser:
(ai) (iA) declareissue, set aside or pay any dividends onsell, or make any other distributions (whether in cashgrant, stock or property) in respect dispose of, pledge or otherwise encumber any shares of its capital stock stock, voting securities or other equity interests, except or any securities or rights convertible into, exchangeable or exercisable for, or evidencing the right to subscribe for dividends by a wholly owned Subsidiary any shares of Pivotal to Pivotal its capital stock, voting securities or equity interests, or any rights, warrants, options, calls, commitments or any other wholly owned Subsidiary agreements of Pivotal, (ii) purchase, redeem any character to purchase or otherwise acquire any shares of its capital stock stock, voting securities or other equity interests of Pivotal or its Subsidiaries or any optionssecurities or rights convertible into, warrantsexchangeable or exercisable for, or rights evidencing the right to acquire subscribe for, any such shares of its capital stock, voting securities or other equity interests, other than provided that (Ax) the withholding Company may issue shares of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to Company Common Stock upon the Pivotal Stock Plans and exercise of Options that are outstanding on the date of this Agreement or as permitted by this Agreement, hereof and in accordance with their the terms on thereof and (y) capital stock, voting securities or equity interests of the date Company's subsidiaries may be issued to the Company or a direct or indirect wholly owned subsidiary of this Agreement and the Company; (B) the acquisition by Pivotal redeem, purchase or otherwise acquire any of Pivotal Options its outstanding shares of capital stock, voting securities or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreementequity interests, or any rights, warrants, options, calls, commitments or any other agreements of any character to acquire any shares of its capital stock, voting securities or equity interests; (iiiC) split, combine, subdivide or reclassify or otherwise amend the terms of any of its capital stock or other equity 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 other equity interests;
(b) issue, deliver, sell, grant, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) any shares of its capital stock or declare, set aside for payment or pay any dividend, or make any other equity interests distribution in respect of any shares of its capital stock or otherwise make any payments to its shareholders in their capacity as such (other than dividends by a direct or indirect wholly owned subsidiary of the Company to its parent); or (D) amend or waive any of its rights under, or except as automatically provided in the Stock Plan, accelerate the vesting under, any provision of the Stock Plan or any securities convertible into, exchangeable for or exercisable for agreement evidencing any such shares outstanding Option or other equity interests, or any rights, warrants or options right to acquire, any such shares or other equity interests, or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive shares of acquire capital stock of VMware on a deferred basis the Company or other rights linked to the value of Class A Shares any restricted stock purchase agreement or Class B Sharesany related contract, including except such vesting as required pursuant to Contracts as employment agreements in effect on the date hereof (other than the issuance of Class A Shares upon the exercise of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPP, in each case, that are outstanding on the date of this Agreement and Made Available (complete copies of which have been made available to VMware and otherwise in accordance with their terms as in effect on such datePurchaser);
(cii) amend incur any indebtedness for borrowed money or otherwise change, or authorize or propose to amend or otherwise change, its certificate of incorporation or bylaws guarantee any indebtedness (or enter into a "keep well" or similar organizational documentsagreement);
, other than (dA) directly or indirectly acquire or agree to acquire (iborrowings by the Company in the ordinary course of business under the Company's existing credit facility listed on Section 2.10(a) by merging or consolidating with, purchasing a substantial equity interest in or a substantial portion of the assets of, making an investment in or loan or capital contribution to or in any other manner, any corporation, partnership, association or other business organization or division thereof or (ii) any assets that are otherwise material to Pivotal Company Disclosure Schedule and its Subsidiaries, except, in each case, for (1) capital expenditures which shall be subject guarantees of such borrowings issued by the Company's subsidiaries to the limitations extent required under the terms of clause (i) below such credit facility, and (2B) purchases borrowings from the Company by a direct or indirect wholly owned subsidiary of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes the Company in the ordinary course of business consistent with Pivotal’s investment management policypast practice;
(iii) sell, and transfer, lease, mortgage, encumber or otherwise dispose of (including pursuant to a sale-leaseback transaction or an asset securitization transaction) any of its properties or assets (including securities of subsidiaries) to any Person, except in the case (A) sales of clause (ii), acquisitions of inventory, products or services inventory in the ordinary course of business; Table business consistent with past practice, (B) pursuant to contracts or agreements in force at the date of Contentsthis Agreement and listed on Section 4.1(a)(iii) of the Company Disclosure Schedule, complete copies of which have been made available to Purchaser, or (C) disposition of obsolete or worthless assets;
(eiv) directly except for the purpose of effecting repairs in the ordinary course of business (which are contemplated to include the replacement of an HVAC system in a Manhattan store) or indirectly sellthose capital expenditures associated with the store opening plans for Ewing, leaseNew Jersey (which capital expenditures shall not exceed the budgeted amount of $365,000), licensemake any capital expenditures (including, sell without limitation, no capital expenditures to remodel or refixture any stores);
(v) make any acquisition (by purchase of securities or assets, merger or consolidation, or otherwise) of any other Person, business or division (other than acquisitions of inventories, supplies and leasebackraw materials for operations in the ordinary course of business consistent with past practice, abandonand capital expenditures to the extent permitted under clause (iv) above);
(vi) make any investment (by contribution to capital, allow property transfers, purchase of securities or otherwise) in, or loan or advance (other than travel and similar advances to lapseits employees in the ordinary course of business consistent with past practice) to, mortgage any Person other than a direct or otherwise encumber indirect wholly owned subsidiary of the Company in the ordinary course;
(vii) (A) enter into, terminate or subject amend any Material Contract, other than in the ordinary course of business consistent with past practice, terminate or amend any existing Real Property Lease without the consent of Purchaser, which consent shall not be unreasonably withheld (it being understood that the Purchaser shall not be required to consent to any Lien increase in rent or otherwise dispose the term of any such lease) or enter into any new Real Property Lease, other than as part of the Company's store opening plans for Manalapan and Ewing, New Jersey; (B) enter into or extend the term or scope of any contract or agreement that purports to restrict the Company or any subsidiary from engaging in whole any line of business or in part any geographic area, (C) enter into any contract that would be breached by, or require the consent of any third party in order to continue in full force following, consummation of the Transactions, or (D) release any Person from, or modify or waive any provision of, any confidentiality, standstill or similar agreement;
(viii) increase in any manner the compensation of any of its material propertiesdirectors, assets officers or rights employees or enter into, establish, amend or terminate any employment, consulting, retention, change in control, collective bargaining, bonus or other incentive compensation, profit sharing, health or other welfare, stock option or other equity (including or equity-based), pension, retirement, vacation, severance, deferred compensation or other compensation or benefit plan, policy, agreement, trust, fund or arrangement with, for or in respect of, any material Pivotal Intellectual Property Registrationsshareholder, director, officer, other employee, consultant or affiliate, other than (A) or any interest therein, except, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances as required to be effected prior to the Effective Time pursuant to existing Contracts that are not material applicable Law or the terms of agreements in effect on the date of this Agreement (complete copies of which have been made available to Pivotal and its Subsidiaries, taken as a whole Purchaser) set forth on Section 4.1(a)(viii) of the Company Disclosure Schedule and (iiB) Ordinary Course Licenses Outincreases in salaries, wages and benefits of employees (other than officers) made in the ordinary course of business and in amounts and in a manner consistent with past practice;
(fix) make any material Tax election or settle or compromise any material Tax liability or agree to an extension of a statute of limitations for Taxes;
(x) make any changes in financial or tax accounting methods, principles or practices, except insofar as may be required by a change in GAAP or applicable Law;
(xi) amend the Company Charter Documents or the Subsidiary Documents;
(xii) adopt or enter into a plan or agreement of complete or partial liquidation, dissolution, restructuring, recapitalization recapitalization, merger, consolidation or other reorganizationreorganization (other than transactions exclusively between wholly owned subsidiaries of the Company);
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, other than Pivotal or any direct or indirect wholly owned Subsidiary of Pivotal;
(i) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto that in the aggregate are in excess of $1,000,000;
(j) except as required by any judgment by a court of competent jurisdiction, (ixiii) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge discharge, settlement or satisfaction in the ordinary course of business, (B) as required by business consistent with past practice or in accordance with their terms as in effect on the date of this Agreement of claimsother liabilities, liabilities claims or obligations reflected or reserved against in the most recent audited consolidated financial statements (or the notes thereto) of Pivotal the Company included in the Pivotal Filed SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements in the ordinary course of business, (ii) cancel any material Indebtedness owed to Pivotal or any of its Subsidiaries, or (iii) waive, release, grant or transfer any right of material valuebusiness consistent with past practice;
(kxiv) (i) materially modify, materially amend, terminate, cancel, waive settle or compromise any material right under litigation or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (ii) enter into any Contract that if in effect on the date hereof would be a Material Contract, other than customer contracts entered into in the ordinary course of businessproceeding;
(lxv) commence any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal agree, in writing or otherwise, to take any of its Subsidiaries)the foregoing actions or take any action or agree, in writing or compromiseotherwise, settle to take any action, which would cause any of the representations or agree warranties of the Company set forth in this Agreement (A) that are qualified as to settle materiality or Material Adverse Effect to be untrue and (B) that are not so qualified to be untrue in any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements material respect; and
(xvi) purchase directors' and officers' liability insurance except in the ordinary course of business consistent with past practice; provided, however, that involve only the payment Company may spend up to $450,000 to purchase "tail" coverage providing directors' and officers' liability insurance covering acts or omissions occurring prior to the Purchase Date with respect to those persons who are currently covered by the Company's directors' and officers' liability insurance policy.
(b) Purchaser agrees that, during the period from the date of money damages not in excess of $500,000 individually or $2,000,000 in this Agreement until the aggregate, in any case without the imposition of any equitable relief onPurchase Date, or the admission earlier termination of wrongdoing bythis Agreement, Pivotal except as expressly contemplated or permitted by this Agreement or as required by applicable Law, and except as may be agreed in writing by the Company, Purchaser shall not, and shall not permit any of its Subsidiaries;subsidiaries to, take any action or agree, in writing or otherwise, to take any action which would cause any of the representations or warranties of Purchaser set forth in this Agreement (A) that are qualified as to materiality or Material Adverse Effect to be untrue and (B) that are not so qualified to be untrue in any material respect.
(mc) change During the period from the date of this Agreement until the Purchase Date, or the earlier termination of this Agreement in accordance with Article V, the Company shall, and shall cause each of its financial or Tax accounting methodssubsidiaries to, principles or practicesconsult with Purchaser regarding opportunities of the Company to purchase goods at a volume discount in a quantity greater than the Company anticipates needing for its retail purposes, except insofar as may have been required in order to permit both Purchaser and the Company to jointly purchase such goods in order to realize the volume discount; provided, however, that a breach by the Company of the foregoing provisions shall not give rise to a change in GAAP or applicable Law;default under this Agreement enabling Purchaser to terminate this Agreement.
(nd) settle or compromise any material liability for Taxes or surrender any material claim for a refund During the period from the date of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax electionthis Agreement until the Purchase Date, or change the entity classification earlier termination of this Agreement in accordance with Article V, the Company shall, and shall cause each of its subsidiaries not to, make any Subsidiary for U.S. federal tax purposes; file any Tax Return other than inventory purchase except in the ordinary course of business and on a basis consistent with past practice practice; provided, however, that would materially the Company shall consult with Xxx Xxxxxxxxx or such other person as may be designated in writing by Purchaser ("Purchaser's Designee") prior to making any purchase or series of related purchases of inventory, health insurance, medical insurance and adversely affect its Tax liability; consent dental insurance that exceed, individually or in the aggregate, $200,000 and, provided, further, that if Purchaser's Designee objects in writing to any extension such purchase or waiver series of related purchases in excess of $200,000, the limitation period applicable to any claim Company shall not, and shall cause its subsidiaries not to, effect such purchase or assessment in respect related series of purchases unless such purchase or purchases have been approved by the Company's Board of Directors or a material amount of Taxes; grant any power of attorney with respect to material Taxes; enter into any Tax Sharing Agreement or any closing agreement or other similar agreement; or change any method of accounting for Tax purposes;duly authorized committee thereof..
Appears in 1 contract
Conduct of Business. During the period from the date of this Agreement to the Effective Time, except as consented to in writing in advance by VMware or as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) by this Agreement, Pivotal The Company shall, and the FT Stockholders shall cause each of its Subsidiaries the Company to, carry on its business in the ordinary course, including its development and sales efforts as currently contemplated, and use commercially reasonable efforts to (i) preserve intact its business organization, assets, rights and properties, (ii) keep available the services of its current officers, employees and consultants and (iii) preserve its goodwill and its relationships with customers, suppliers, licensors, licensees, distributors and others having material business dealings with it. In addition to and without limiting the generality of the foregoing, during the period from the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms, except as expressly set forth in this Agreement or as required by applicable Law or with the prior written consent of Parent, conduct its business in the Ordinary Course of Business and, to the extent consistent therewith, the Company shall use commercially reasonable efforts to preserve substantially intact the business organization of the Company and its Subsidiaries, to keep available the services of the current officers and employees of the Company and its Subsidiaries, and to preserve the present relationships of the Company and its Subsidiaries with customers, suppliers, distributors, licensors, licensees and other Persons having business relationships with the Company and its Subsidiaries. Without limiting the generality of the foregoing, between the date of this Agreement and the earlier of the termination of this Agreement in accordance with its terms or the Effective Time, except (x) the Company shall and shall cause each of its Subsidiaries to, and the FT Stockholders shall cause the Company and each of its Subsidiaries to, manage its accounts receivable and accounts payable and maintain the ratio of accounts receivable to accounts payable in the Ordinary Course of Business and (y) except as otherwise expressly set forth in section 5.1 of the Pivotal Disclosure Letter, (y) as specifically required by this Agreement or (z) as specifically required by applicable Law, Pivotal the Company shall not, not and shall not permit any of its SubsidiariesSubsidiaries to, and the FT Stockholders shall not permit the Company or any of its Subsidiaries to, without VMware’s the prior written consent (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), toParent:
(a) amend or propose to amend its Charter Documents;
(b) (i) split, combine, or reclassify any of its securities, (ii) repurchase, redeem, or otherwise acquire, or offer to repurchase, redeem, or otherwise acquire, any of its securities, or (iii) declare, set aside aside, or pay any dividends on, dividend or make any other distributions distribution (whether in cash, stock stock, property, or propertyotherwise) in respect of, or enter into any Contract with respect to the voting of, any shares of its capital stock (other than dividends from its direct or other equity interestsindirect wholly owned Subsidiaries); provided that nothing herein shall prevent the Company from distributing cash to the Company Stockholders on or prior to the Closing so long as the Company has free and unrestricted cash of not less than $500,000.00 as of the Closing and immediately after giving effect to the Merger;
(c) issue, sell, pledge, dispose of, or encumber or create any Lien on any of its property or assets, except for dividends Permitted Liens;
(d) except as required by a wholly owned Subsidiary applicable Law or by any Benefit Plan or Contract in effect as of Pivotal to Pivotal or any other wholly owned Subsidiary of Pivotal, (ii) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement (i) increase the compensation payable or that could become payable to directors, officers, or employees, other than increases in compensation made to non-officer employees in the Ordinary Course of Business, (ii) promote any officers or employees, except as permitted by this Agreementthe result of the termination or resignation of any officer or employee, or (iii) establish, adopt, enter into, amend, terminate, exercise any discretion under, or take any action to accelerate rights under any Benefit Plan or any plan, agreement, program, policy, trust, fund, or other arrangement that would be a Benefit Plan if it were in accordance with their terms on existence as of the date of this Agreement and (B) Agreement, or make any contribution to any Benefit Plan, other than contributions required by Law, the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture terms of such awards, Benefit Plan as in accordance with their terms effect on the date of this Agreement, or (iii) split, combine, reclassify that are made in the Ordinary Course of Business; provided that nothing herein shall prevent the Company from paying bonuses to employees of the Company on or otherwise amend prior to the terms Closing so long as the Company has free and unrestricted cash of any not less than $500,000.00 as of its capital stock or other equity 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 other equity interestsClosing and immediately after giving effect to the Merger;
(be) issueacquire, deliverby merger, sellconsolidation, grant, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions acquisition of general applicability as may be provided under the Securities Act or other applicable securities Laws) any shares of its capital stock or other equity interests or any securities convertible into, exchangeable for or exercisable for any such shares or other equity interestsassets, or any rights, warrants or options to acquireotherwise, any such shares business or other equity interests, or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive shares of capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof (other than the issuance of Class A Shares upon the exercise of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPP, in each case, that are outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with their terms as in effect on such date);
(c) amend or otherwise change, or authorize or propose to amend or otherwise change, its certificate of incorporation or bylaws (or similar organizational documents);
(d) directly or indirectly acquire or agree to acquire (i) by merging or consolidating with, purchasing a substantial equity interest in or a substantial portion of the assets of, making an investment in or loan or capital contribution to or in any other manner, any corporation, partnership, association or other business organization Person or division thereof or (ii) make any assets that are otherwise material to Pivotal and its Subsidiariesloans, except, in each case, for (1) capital expenditures which shall be subject to the limitations of clause (i) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes in the ordinary course of business consistent with Pivotal’s investment management policy, and except in the case of clause (ii), acquisitions of inventory, products or services in the ordinary course of business; Table of Contents
(e) directly or indirectly sell, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien or otherwise dispose in whole or in part of any of its material properties, assets or rights (including any material Pivotal Intellectual Property Registrations) or any interest therein, except, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirationsadvances, or encumbrances required capital contributions to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Outor investments in any Person;
(f) (i) transfer, license, sell, lease, or otherwise dispose of (whether by way of merger, consolidation, sale of stock or assets, or otherwise) or pledge, encumber, or otherwise permit to be subject to any Lien, any assets; provided, that the foregoing shall not prohibit the Company or any of its Subsidiaries from transferring, selling, leasing, or disposing of obsolete equipment or assets being replaced, in each case in the Ordinary Course of Business, or (ii) adopt or enter into effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization recapitalization, or other reorganization;
(g) fail to maintainrepurchase, prepay, or allow incur any Indebtedness or enter into a Contingent Obligation with respect to lapsethe Indebtedness of another Person, issue or sell any debt securities or options, warrants, calls, or abandonother rights to acquire any debt securities, including by failure enter into any “keep well” or other Contract to pay maintain any financial statement condition of any other Person or enter into any arrangement having the required fees economic effect of any of the foregoing, other than in any jurisdiction, any material Pivotal Intellectual Property Registrationsconnection with the incurrence of ordinary course trade payables in the Ordinary Course of Business;
(h) (i) incur, create, assume enter into or otherwise become liable foramend or modify in any material respect, or repay, cancel, forgive or prepayconsent to the termination of (other than at its stated expiry date), any Indebtedness, Material Contract or amend, modify any lease with respect to real estate or refinance any Indebtedness or (ii) make any loans, advances or capital contributions to, or investments in, any other PersonContract or lease that, other than Pivotal if in effect as of the date of this Agreement would constitute a Material Contract or any direct or indirect wholly owned Subsidiary of Pivotallease with respect to Real Estate;
(i) incur institute, settle, or commit to incur compromise any capital expenditure or authorization or commitment with respect thereto that Legal Action involving the payment of monetary damages of any amount exceeding $10,000 in the aggregate are in excess aggregate, other than the settlement of $1,000,000claims, Liabilities, or obligations reserved against on its balance sheet; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief, has a restrictive impact on the business of, or involves an admission of guilt, wrongdoing or liability on the part of, the Company or any of its Subsidiaries;
(j) make any material change in any method of financial accounting principles or practices, in each case except as for any such change required by any judgment by a court change in GAAP or applicable Law or in accordance with the preparation of competent jurisdiction, (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge or satisfaction Company Audited Financial Statements in the ordinary course of business, (B) as required by their terms as in effect on the date of this Agreement of claims, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements in the ordinary course of business, (ii) cancel any material Indebtedness owed to Pivotal or any of its Subsidiaries, or (iii) waive, release, grant or transfer any right of material valueaccordance with Section 5.10;
(k) (i) materially modifyenter into or amend any agreement or settlement with any Tax Authority, materially amend(ii) make, terminaterevoke or change any Tax election, cancelchange any annual Tax accounting period, waive or adopt or change any material right under or extend any Material Contract method of Tax accounting (other than renewals of Contracts with customers of Pivotal Products as set forth in the ordinary course of businessCompany Audited Financial Statements), (iii) amend any Tax Returns or file claims for Tax refunds, or (iiiv) enter into any Contract that if closing agreement, surrender in effect on the date hereof would be writing any right to claim a Material Contract, other than customer contracts entered into in the ordinary course of business;
(l) commence any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal or any of its Subsidiaries), or compromise, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements in the ordinary course of business that involve only the payment of money damages not in excess of $500,000 individually or $2,000,000 in the aggregate, in any case without the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal or any of its Subsidiaries;
(m) change its financial or Tax accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law;
(n) settle or compromise any material liability for Taxes or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke offset or modify any material other reduction in Tax election, liability or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liability; consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment assessment;
(l) enter into any agreement, agreement in respect principle, letter of a material amount intent, memorandum of Taxes; grant any power of attorney understanding, or similar Contract with respect to any joint venture, strategic partnership, or alliance;
(m) abandon, allow to lapse, sell, assign, transfer, grant any Lien in otherwise encumber or dispose of any interest in any of the Owned IP, or grant any right or license to any of the Owned IP other than pursuant to non-exclusive licenses entered into in the Ordinary Course of Business;
(n) terminate or modify in any material Taxes; respect, or fail to exercise renewal rights with respect to, any material insurance policy;
(o) open or close any facility or office;
(p) enter into or amend or modify any Tax Sharing Agreement Related Party Transaction;
(q) take any action that is intended or any closing agreement that would reasonably be expected to, individually or in the aggregate, prevent, materially delay, or materially impede the consummation of the Merger or the other similar agreementTransactions; or change (r) agree or commit to do any method of accounting for Tax purposes;the foregoing.
Appears in 1 contract
Samples: Merger Agreement (Cinedigm Corp.)
Conduct of Business. During (a) Conduct of Business by the period from Company. Except as set forth on Section 4.1(a) of the date of this Agreement to the Effective TimeCompany Disclosure Letter, except as consented to in writing in advance by VMware or as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) contemplated by this Agreement, Pivotal shall, and shall cause each of its Subsidiaries to, carry on its business in the ordinary course, including its development and sales efforts as currently contemplated, and use commercially reasonable efforts to (i) preserve intact its business organization, assets, rights and properties, (ii) keep available the services of its current officers, employees and consultants and (iii) preserve its goodwill and its relationships with customers, suppliers, licensors, licensees, distributors and others having material business dealings with it. In addition to and without limiting the generality of the foregoing, during the period from the date of this Agreement to the Effective Time, except (x) as set forth the Company shall, and shall cause the Company Subsidiaries to, carry on their respective businesses in section 5.1 the ordinary course consistent with past practice and, to the extent consistent therewith, use reasonable best efforts to preserve intact their current business organizations, use reasonable best efforts to keep available the services of their current officers and other key employees and preserve their relationships with customers, suppliers, distributors, lessors and other persons having business dealings with them. Without limiting the generality of the Pivotal Disclosure Letterforegoing (but subject to the above exceptions), (y) as specifically required by during the period from the date of this Agreement or (z) as specifically required by applicable Lawto the Effective Time, Pivotal the Company shall not, and shall not permit any of its SubsidiariesCompany Subsidiary to, without VMware’s the prior written consent (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), toParent:
(ai) (iA) other than dividends and distributions by a direct or indirect wholly owned Company Subsidiary to the Company or another wholly owned Company Subsidiary, declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock or other equity interests, except for dividends by a wholly owned Subsidiary of Pivotal to Pivotal or any other wholly owned Subsidiary of Pivotalstock, (iiB) split, combine or reclassify any of its capital stock, (C) except pursuant to agreements entered into, or in existence on or prior to the date of this Agreement (and previously disclosed to Parent), with respect to the Company Stock Plans, purchase, redeem or otherwise acquire any shares of capital stock of the Company or other equity interests any of Pivotal or its the Company Subsidiaries or any optionsother securities thereof or any rights, warrants, warrants or rights options to acquire any such shares or other equity interestssecurities, other than or (AD) the withholding of Class A Shares to satisfy tax obligations enter into any agreement with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii) split, combine, reclassify or otherwise amend the terms of any voting of its capital stock or other equity 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 other equity interestsstock;
(bii) issue, deliver, sell, grant, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) any shares of its capital stock or stock, any other equity interests voting securities or any securities convertible into, exchangeable for or exercisable for any such shares or other equity interests, or any rights, calls, commitments, warrants or options to acquire, any such shares shares, voting securities or other equity interestsconvertible securities, or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive shares of capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof (other than the issuance of Class A Shares shares by one Company Subsidiary to the Company or any other Company Subsidiary or the issuance of shares of Company Common Stock upon the exercise of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights outstanding Company Stock Options under the Pivotal ESPPCompany Stock Plans or in connection with other outstanding awards under the Company Stock Plans, in each case, that are outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with their terms as in effect on such date)present terms;
(ciii) amend or otherwise change, or authorize adopt or propose any amendment to amend or otherwise change, its certificate articles of incorporation or bylaws code of regulations (or similar other comparable organizational documents);
(div) directly merge or indirectly consolidate the Company or any Company Subsidiary with any other person, except for any such transactions solely among wholly-owned Company Subsidiaries, or acquire or agree to acquire (i) by merging or consolidating with, purchasing a substantial any equity interest in or a substantial portion of the assets of, making an investment in or loan or capital contribution to or in by any other manner, any business or any corporation, partnership, association or other business organization or division thereof thereof, or otherwise acquire any material amount of assets of any other person (ii) any other than the purchase of assets that are otherwise material to Pivotal and its Subsidiaries, except, in each case, for (1) capital expenditures which shall be subject to the limitations of clause (i) below and (2) purchases of marketable securities by from suppliers or on behalf of Pivotal or its Subsidiaries for cash management purposes vendors in the ordinary course of business consistent with Pivotal’s investment management policy, and except in the case of clause (iipast practice), acquisitions of inventory, products or services in the ordinary course of business; Table of Contents;
(ev) directly or indirectly sell, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien or otherwise dispose in whole or in part of any of its material propertiesproperties or assets other than dispositions of properties and assets in the ordinary course of business consistent with past practice or dispositions of such properties and assets that, assets individually or rights (including any material Pivotal Intellectual Property Registrations) or any interest thereinin the aggregate, except, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal the Company or any Company Subsidiary, and its Subsidiaries, taken as a whole the granting of Permitted Liens and (ii) Ordinary Course Licenses OutLiens required under existing bank agreements;
(f) adopt or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, other than Pivotal or any direct or indirect wholly owned Subsidiary of Pivotal;
(i) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto that in the aggregate are in excess of $1,000,000;
(jvi) except as required by any judgment law or as required by a court contracts or plans entered into or in existence on or prior to the date of competent jurisdictionthis Agreement (and previously disclosed to Parent) and subject to Sections 4.1(a)(i) and (ii), (iA) payexcept for normal increases in salary and wages in the ordinary course of business consistent with past practice, dischargegrant any increase in the compensation, settle including, without limitation, bonuses and incentives, or satisfy benefits payable or to become payable by the Company or any claimsCompany Subsidiary to any current or former director, liabilities officer, employee or obligations consultant; (whether absoluteB) adopt, accruedenter into, asserted establish, make any new grants or unassertedaward of, contingent or otherwise)amend or otherwise increase, reprice or accelerate the payment or vesting of the amounts, benefits or rights payable or accrued or to become payable or accrued under any Company Benefit Plan; (C) enter into or amend any employment, severance, change in control agreement or any similar agreement or any collective bargaining agreement or, except as required in accordance with the Company's severance policy in effect on the date of this Agreement and previously provided to Parent, grant any severance or termination pay to any officer, director, consultant or employee of the Company or any Company Subsidiaries; (D) pay or award any pension, retirement, allowance or other non-equity incentive awards, or other employee or director benefit not required by any outstanding Company Benefit Plan; (E) enter into any agreement, plan or arrangement that would be required to be listed on Section 3.1(s) of the Company Disclosure Letter; or (F) hire any employee at a compensation level expected to be more than $200,000 per annum;
(vii) (A) amend, terminate, or waive any material right or benefit under any Material Contract, other than (A) the payment, discharge or satisfaction in the ordinary course of business, (B) as required by their terms as in effect enter into any contract that would have been a Material Contract had it existed on the date of this Agreement Agreement, (C) enter into any contract that would restrict or prevent, after the Effective Time, Parent and its subsidiaries from engaging or competing in any line of business or in any geographic area, (D) enter into any contract that would restrict or prevent, after the Effective Time, the Company or any of its subsidiaries from (1) engaging or competing in any of Parent's businesses or in any geographic area or (2) pricing, to the extent such contract contains a provision that restricts pricing in any of Parent's businesses, and (E) enter into any contract that is material that contains a change-of-control provision that would be applicable to the Merger or the transactions contemplated by this Agreement;
(viii) pay, discharge, compromise or settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $1,000,000, individually or in the aggregate, or which would be reasonably likely to have an adverse impact on the operations of the Company and the Company Subsidiaries taken together as a whole;
(ix) pay, discharge, settle, compromise or satisfy any material claims, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements in the ordinary course of businessother obligations, (ii) cancel any material Indebtedness owed to Pivotal or any of its Subsidiaries, or (iii) waive, release, grant or transfer any right of material value;
(k) (i) materially modify, materially amend, terminate, cancel, waive any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (ii) enter into any Contract that if in effect on the date hereof would be a Material Contract, other than customer contracts entered into in the ordinary course of business;
(l) commence any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal or any of its Subsidiaries), or compromise, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements in the ordinary course of business that involve only the payment of money damages not in excess of $500,000 individually or $2,000,000 in the aggregate, in any case without the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal or any of its Subsidiaries;
(m) change its financial or Tax accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law;
(n) settle or compromise any material liability for Taxes or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis consistent with past practice that would materially or in accordance with their terms existing on the date hereof, or waive, release or assign any material rights or claims other than in the ordinary course of business consistent with past practice;
(x) implement or adopt any change in the accounting principles or procedures used by it unless required by GAAP or by law;
(xi) prepare or file any Tax Return inconsistent in any material respect with past practice or amend any Tax Returns except as required by law or, except in the ordinary course of business and adversely affect its Tax liability; consent to consistent with past practice, make or rescind any extension express or waiver of the limitation period applicable to deemed election or settle or compromise any claim or assessment in respect action relating to Taxes, or change any of a material amount its methods of Taxes; grant any power accounting or of attorney reporting income or deductions for Tax purposes unless required by GAAP (or, if applicable with respect to material Taxes; enter into foreign subsidiaries, the relevant foreign generally accepted accounting principles) or by law;
(xii) incur or modify any Tax Sharing Agreement indebtedness for borrowed money or guarantee such indebtedness of another person, or issue or sell any debt, securities or warrants or other rights to acquire any debt security of the Company or any closing agreement Company Subsidiary; except for indebtedness for borrowed money incurred in the ordinary course of business not to exceed $5,000,000 in the aggregate;
(xiii) make any loans, advances or capital contributions to any other similar agreementperson (other than to the Company or any of its wholly owned subsidiaries) other than in the ordinary course of business consistent with past practice; or
(xiv) authorize, or change commit or agree to take, any method of accounting for Tax purposes;the foregoing actions; provided, however, that the limitations set forth in this Section 4.1(a) do not apply to any transaction to which the only parties are the Company and wholly owned subsidiaries of the Company.
Appears in 1 contract
Conduct of Business. During the period from From the date of this Agreement through the earlier of the Closing or valid termination of this Agreement pursuant to Article X (the Effective Time“Interim Period”), except as consented to in writing in advance by VMware or as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) by this Agreement, Pivotal Company shall, and shall cause each of its Subsidiaries to, carry on its except as otherwise explicitly contemplated by this Agreement or the Ancillary Agreements or required by Law or as consented to by Acquiror in writing (which consent shall not be unreasonably conditioned, withheld, delayed or denied), use reasonable best efforts to operate the business of the Company in the ordinary course, including its development and sales efforts as currently contemplated, and use commercially reasonable efforts to (i) preserve intact its business organization, assets, rights and properties, (ii) keep available the services of its current officers, employees and consultants and (iii) preserve its goodwill and its relationships course consistent with customers, suppliers, licensors, licensees, distributors and others having material business dealings with itpast practice. In addition to and without Without limiting the generality of the foregoing, during the period from the date of this Agreement to the Effective Time, except (x) as set forth in section 5.1 on Section 6.1 of the Pivotal Company Disclosure LetterLetter or as consented to by Acquiror in writing (which consent shall not be unreasonably conditioned, (ywithheld, delayed or denied) the Company shall not, and the Company shall cause its Subsidiaries not to, except as specifically required otherwise contemplated by this Agreement or (z) as specifically the Ancillary Agreements or required by applicable Law, Pivotal shall not, and shall not permit any of its Subsidiaries, without VMware’s prior written consent (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), to:
(a) change or amend the Governing Documents of the Company or any of the Company’s Subsidiaries or form or cause to be formed any new Subsidiary of the Company;
(ib) declare, set aside make or pay declare any dividends on, dividend or distribution to the stockholders of the Company or make any other distributions (whether in cash, stock or property) in respect ofof any of the Company Capital Stock or equity interests;
(c) split, combine, reclassify, recapitalize or otherwise amend any terms of any shares or series of the Company’s or any of its Subsidiaries’ capital stock or other equity interests, except for dividends any such transaction by a wholly wholly-owned Subsidiary of Pivotal to Pivotal or any other wholly the Company that remains a wholly-owned Subsidiary of Pivotal, the Company after consummation of such transaction;
(iid) purchase, repurchase, redeem or otherwise acquire any issued and outstanding share capital, outstanding shares of capital stock stock, membership interests or other equity interests of Pivotal the Company or its Subsidiaries, except for (i) the acquisition by the Company or any of its Subsidiaries of any shares of capital stock, membership interests or other equity interests (other than Company Options or Company RSUs) of the Company or its Subsidiaries in connection with the forfeiture or any options, warrants, or rights to acquire any cancellation of such shares or other equity interests, other than including, for the avoidance of doubt, redemptions of equity securities from former employees upon the terms set forth in the underlying agreements governing such equity securities, (Aii) transactions between the Company any wholly-owned Subsidiary of the Company or between wholly-owned Subsidiaries of the Company, (iii) the acquisition by the Company of shares of Company Common Stock in connection with the surrender of shares of Company Common Stock by holders of Company Options in order to pay the exercise price of the Company Options, and (iv) the withholding of Class A Shares shares of Company Common Stock to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement Company Options or as permitted by this AgreementCompany RSUs, in accordance with their terms on the date each of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or clauses (iii) splitand (iv), combine, reclassify or otherwise amend the terms of any of its capital stock or other equity 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 other equity interests;
(b) issue, deliver, sell, grant, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) any shares of its capital stock or other equity interests or any securities convertible into, exchangeable for or exercisable for any such shares or other equity interests, or any rights, warrants or options to acquire, any such shares or other equity interests, or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive shares of capital stock of VMware on a deferred basis or other rights linked solely to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof (other than the issuance of Class A Shares upon the exercise of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPP, in each case, that are outstanding on the date of this Agreement and Made Available to VMware and otherwise extent in accordance with their terms as in effect on such date)as of the date of this Agreement and previously disclosed to Acquiror;
(ce) amend enter into, modify in any material respect or otherwise changeterminate (other than expiration in accordance with its terms) any Contract of a type required to be listed on Section 4.12(a) of the Company Disclosure Letter, or authorize or propose to amend or otherwise change, its certificate of incorporation or bylaws (or similar organizational documents);
(d) directly or indirectly acquire or agree to acquire (i) by merging or consolidating with, purchasing a substantial equity interest in or a substantial portion of the assets of, making an investment in or loan or capital contribution to or in any other manner, any corporation, partnership, association or other business organization or division thereof or (ii) any assets that are otherwise material to Pivotal and its Subsidiaries, exceptReal Property Lease, in each case, for (1) capital expenditures which shall be subject to the limitations of clause (i) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes other than entry into such agreements in the ordinary course of business consistent with Pivotal’s investment management policypast practice or as required by Law;
(f) sell, and assign, transfer, convey, lease or otherwise dispose of any material portion of tangible assets or properties of the Company or its Subsidiaries, except in the case for (i) dispositions of clause obsolete or worthless equipment, (ii), acquisitions of inventory, products ) transactions among the Company and its wholly-owned Subsidiaries or services among its wholly-owned Subsidiaries and (iii) transactions in the ordinary course of business; Table of Contentsbusiness consistent with past practice;
(eg) directly acquire any ownership interest in any real property;
(h) except as otherwise required by Law, existing Company Benefit Plans or indirectly sellthe Contracts listed on Section 4.12 of the Company Disclosure Letter, lease(i) grant any severance, licenseretention, change in control or termination or similar pay, except in connection with the promotion, hiring or termination of employment of any non-officer employee in the ordinary course of business consistent with past practice, (ii) make any change in the key management structure of the Company or any of the Company’s Subsidiaries, including the hiring of additional officers or the termination of any employees at the level of Director or above, other than terminations for cause or due to death or disability, (iii) terminate, adopt, enter into or materially amend any Company Benefit Plan, (iv) increase the cash compensation or bonus opportunity of any employee, officer, director or other individual service provider, except in the ordinary course of business consistent with past practice, (v) establish any trust or take any other action to secure the payment of any compensation payable by the Company or any of the Company’s Subsidiaries or (vi) take any action to amend or waive any performance or vesting criteria or to accelerate the time of payment or vesting of any compensation or benefit payable by the Company or any of the Company’s Subsidiaries, except in the ordinary course of business consistent with past practice;
(i) acquire by merger or consolidation with, or merge or consolidate with, or purchase substantially all or a material portion of the assets of, any corporation, partnership, association, joint venture or other business organization or division thereof;
(i) issue or sell and leaseback, abandon, allow any debt securities or warrants or other rights to lapse, mortgage acquire any debt securities of the Company or any Subsidiary of the Company or otherwise encumber incur or subject assume any Indebtedness, or (ii) guarantee any Indebtedness of another Person, the sum of (i) and (ii) not to any Lien or otherwise dispose be in whole or excess of $750,000 in part of any of its material properties, assets or rights (including any material Pivotal Intellectual Property Registrations) or any interest therein, exceptthe aggregate, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Out;
(f) adopt or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, other than Pivotal or any direct or indirect wholly owned Subsidiary of Pivotal;
(i) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto that in the aggregate are in excess of $1,000,000;
(j) except as required by any judgment by a court of competent jurisdiction, (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (Ax) the payment, discharge or satisfaction in the ordinary course of business, business consistent with past practice and (By) as required by their terms as in effect on between the date of this Agreement of claims, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements in the ordinary course of business, (ii) cancel any material Indebtedness owed to Pivotal or any of Company and its Subsidiaries, or (iii) waive, release, grant or transfer any right of material value;
(k) (i) materially modify, materially amend, terminate, cancel, waive make or change any material right under or extend any Material Contract (other than renewals election in respect of Contracts with customers of Pivotal Products in the ordinary course of business) or material Taxes, (ii) materially amend any filed material Tax Return, (iii) adopt or request permission of any taxing authority to change any accounting method in respect of material Taxes, (iv) enter into any Contract that if “closing agreement” as described in effect Section 7121 of the Code (or any similar provision of state, local, or foreign Law) with any Governmental Authority in respect of material Taxes executed on or prior to the date hereof would be a Material Contract, Closing Date or enter into any Tax sharing or similar agreement (other than customer contracts any such agreement solely between the Company and its existing Subsidiaries and customary commercial Contracts (or Contracts entered into in the ordinary course of business;
(l) commence any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal or any of its Subsidiariesnot primarily related to Taxes), or compromise, settle or agree to (v) settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements claim or agreements assessment in the ordinary course respect of business that involve only the payment of money damages not in excess of $500,000 individually or $2,000,000 in the aggregate, in any case without the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal or any of its Subsidiaries;
(m) change its financial or Tax accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law;
(n) settle or compromise any material liability for Taxes or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liability; (vi) consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of a material amount Taxes;
(l) take any action, or knowingly fail to take any action, where such action or failure to act could reasonably be expected to prevent the Merger from qualifying for the Intended Tax Treatment;
(m) discharge any secured or unsecured obligation or liability (whether accrued, absolute, contingent or otherwise) which individually or in the aggregate exceed $750,000, except as such obligations become due;
(n) issue any additional shares of Taxes; Company Capital Stock or securities exercisable for or convertible into Company Capital Stock, other than the issuance of Company Common Stock upon the exercise or settlement of Company Options or Company RSUs in the ordinary course of business under the Company Incentive Plan and applicable award agreement, in each case, outstanding on the date of this Agreement in accordance with their terms as in effect as of the date of this Agreement, or grant any power additional Company Options, Company RSUs or other equity or equity-based compensation;
(o) adopt a plan of, or otherwise enter into or effect a, complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of attorney the Company or its Subsidiaries (other than the Merger);
(p) waive, release, settle, compromise or otherwise resolve any inquiry, investigation, claim, Action, litigation or other Legal Proceedings, except in the ordinary course of business or where such waivers, releases, settlements or compromises involve only the payment of monetary damages in an amount less than $1,000,000 in the aggregate;
(q) assign, transfer, pledge, sell or license to any Person rights to any Intellectual Property that is material to the Company or any of its Subsidiaries, or dispose of, abandon, permit to lapse or fail to preserve any rights to any Intellectual Property that is material to the Company or any of its Subsidiaries, except for the expiration of Company Registered Intellectual Property in accordance with the applicable statutory term or for the grant of non-exclusive licenses in the ordinary course of business, consistent with past practice;
(r) deliver, license or make available to any escrow agent or other Person source code for any software owned or purported to be owned by the Company or any of its Subsidiaries;
(s) modify in any material respect any of the privacy policies, or any administrative, technical or physical safeguards related to privacy or cybersecurity, except (A) to remediate any security issue, (B) to enhance data security or integrity, (C) to comply with applicable Law, or (D) as otherwise directed or required by a Governmental Authority;
(t) disclose or agree to disclose to any Person (other than Acquiror or any of its representatives) any trade secret or any other material Taxesconfidential or proprietary information, know-how or process of the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice and pursuant to obligations to maintain the confidentiality thereof;
(u) make or commit to make any capital expenditures;
(v) manage the Company’s and its Subsidiaries’ working capital (including paying amounts payable in a timely manner when due and payable) in a manner other than in the ordinary course of business consistent with past practice;
(w) other than as required by applicable Law, modify, enter into or extend any collective bargaining agreement or any other labor-related agreements or arrangements with any labor union, labor organization, works council or group of employees of the Company or its Subsidiaries, or recognize or certify any labor union, labor organization, works council or group of employees of the Company or its Subsidiaries as the bargaining representative for any employees of the Company or its Subsidiaries;
(x) terminate without replacement or fail to use reasonable efforts to maintain any License material to the conduct of the business of the Company and its Subsidiaries, taken as a whole;
(y) waive the restrictive covenant obligations of any current or former employee of the Company or any of the Company’s Subsidiaries;
(z) (i) limit the right of the Company or any of the Company’s Subsidiaries to engage in any line of business or in any geographic area, to develop, market or sell products or services, or to compete with any Person or (ii) grant any exclusive rights to any Person, in each case, except where such limitation or grant does not, and would not be reasonably likely to, individually or in the aggregate, materially and adversely affect, or materially disrupt, the ordinary course operation of the businesses of the Company and its Subsidiaries, taken as a whole;
(aa) terminate without replacement or amend in a manner materially detrimental to the Company and its Subsidiaries, taken as a whole, any insurance policy insuring the business of the Company or any of the Company’s Subsidiaries; or
(bb) enter into any Tax Sharing Agreement or agreement to do any closing agreement or other similar agreement; or change any method of accounting for Tax purposes;action prohibited under this Section 6.1.
Appears in 1 contract
Samples: Merger Agreement (ACE Convergence Acquisition Corp.)
Conduct of Business. (a) During the period from the date of this Agreement and prior to the earlier of the Effective TimeTime or the Termination Date, except as consented to in writing in advance by VMware specifically contemplated or as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) permitted by this AgreementAgreement or with the prior written consent of the Purchaser, Pivotal the Company shall, and shall cause each of its Subsidiaries to, carry on its business their respective businesses in the ordinary coursecourse consistent with past practice, including its development and sales efforts as currently contemplated, and use their respective commercially reasonable efforts to (i) preserve intact its their present business organizationorganizations, assetslines of business, rights and properties, (ii) keep available the services of its current officers, employees franchises and consultants and (iii) preserve its goodwill and its their relationships with customers, suppliers, licensors, licensees, distributors Employees and others having material business dealings with itthem and comply with all applicable Legal Requirements in all material respects. In addition to and without Without limiting the generality of the foregoing, during the period from the date of except as specifically contemplated or permitted by this Agreement to the Effective Time, except (x) or as set forth in section Schedule 5.1 hereto, or unless the Purchaser expressly consents in writing in advance, the Company agrees that it will not, and will cause each of its Subsidiaries not to:
(i) enter into any Material Contract, or amend any Material Contract, to which the Company or any of its Subsidiaries is a party or by which any such Person or its assets is bound, except in the ordinary course of business consistent with past practice, or enter into or amend any contract which if so entered into or amended could be reasonably expected to impair in any material respect the ability of the Pivotal Disclosure Letter, (y) as specifically required by Company to perform its obligations under this Agreement or to prevent or materially delay the consummation of the Merger or the other transactions contemplated by this Agreement, other than as permitted under Section 5.5;
(zii) as specifically required by applicable Lawsell, Pivotal shall notlease, and shall not permit license, mortgage, encumber or otherwise dispose of or subject to a Lien (other than a Permitted Lien) any assets of the Company or any of its Subsidiaries, without VMware’s prior written consent (which consent, except in the cases ordinary course of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), to:business consistent with past practices;
(aiii) amend or propose to amend its certificate of incorporation or bylaws;
(i) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock or other equity interests, except for dividends by a wholly owned Subsidiary of Pivotal to Pivotal or any other wholly owned Subsidiary of Pivotal, (ii) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iiiiv) split, combine, subdivide or reclassify or otherwise amend the terms of any of its capital stock or other equity 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 other equity interests;
(b) issue, deliver, sell, grant, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) any shares of its capital stock or other equity interests or declare, set aside, make or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof), in respect of its or its Subsidiaries’ capital stock, or redeem, repurchase or otherwise acquire or offer to redeem, repurchase or otherwise acquire any of its securities or any securities of the Company or any of its Subsidiaries, except for (A) dividends paid by any Subsidiary that is, directly or indirectly, wholly owned by the Company and (B) stock issuances made in connection with the exercise of any option under the Company Option Plans or exercise of any outstanding Company Warrants;
(v) issue, deliver, sell, encumber or otherwise dispose of or subject to a Lien, or authorize the issuance, delivery, sale, encumbrance or disposition of, or Lien on any shares of its capital stock of any class or other equity interests or any securities convertible into, exchangeable for into or exercisable for any such shares or other equity interestsfor, or any rights, warrants or options to acquire, any such shares capital stock or other equity interests, or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive shares of capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof (other than the issuance of Class A Shares shares of the Company Common Stock upon the exercise of Pivotal Options, the settlement Company Stock Options outstanding as of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPP, in each case, that are outstanding on the date of this Agreement and Made Available to VMware and otherwise hereof in accordance with their present terms and the issuance of shares of the Company Common Stock upon the exercise of the Company Warrants outstanding as of the date hereof in effect on such date)accordance with their present terms;
(cvi) amend or otherwise change(A) increase benefits under any Benefits Plan, or authorize or propose to amend or otherwise change(B) increase funding under any Benefit Plan, its certificate of incorporation or bylaws (or similar organizational documents);
(d) directly or indirectly acquire or agree to acquire (i) by merging or consolidating with, purchasing a substantial equity interest in or a substantial portion of the assets of, making an investment in or loan or capital contribution to or in any other manner, any corporation, partnership, association or other business organization or division thereof or (ii) any assets that are otherwise material to Pivotal and its Subsidiaries, except, in each case, for (1) capital expenditures which shall be subject to the limitations of clause (i) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes except in the ordinary course of business consistent with Pivotal’s investment management past practice or as required by law, (C) establish, adopt, enter into, amend (other than any amendment that would result in a reduction in the costs of such Benefit Plan) or terminate any Benefit Plan or any plan, agreement, program, policy, and except trust, fund or other arrangement that would be a Benefit Plan if it were in existence as of the date of this Agreement, (D) grant or agree to grant any increase in the case rates of clause (ii), acquisitions of inventory, products salaries or services compensation payable to any Employee except in the ordinary course of business; Table business consistent with past practice (other than as required by law or pursuant to contracts in effect as of Contentsthe date hereof), (E) loan any money to any Employee of the Company, or (F) grant any awards under any Benefit Plan (including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock or the removal of existing restrictions in any awards made thereunder) or take any action to accelerate the vesting or payment of any compensation or benefit under any Benefit Plan, except for acceleration of vesting of Company Stock Options or the benefits under the Company’s 401(k) plan;
(evii) directly or indirectly sellacquire, leasemerge or consolidate with, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to make any Lien or otherwise dispose in whole or in part of any of its material properties, assets or rights (including any material Pivotal Intellectual Property Registrations) or any interest therein, except, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirationsinvestment in, or encumbrances required make any capital contributions to, any Person (other than in or to be effected prior to a Subsidiary of the Effective Time pursuant to existing Contracts that are not material to Pivotal and its SubsidiariesCompany), taken as a whole and (ii) Ordinary Course Licenses Outother than in the ordinary course of business consistent with past practice;
(fviii) adopt repurchase or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) fail to maintainincur, or allow agree to lapse, repurchase or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, other than Pivotal or any direct or indirect wholly owned Subsidiary Indebtedness incurred in the ordinary course of Pivotalbusiness consistent with past practice and in amounts and on terms consistent with past practices;
(i) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto that in the aggregate are in excess of $1,000,000;
(j) except as required by any judgment by a court of competent jurisdiction, (iix) pay, discharge, settle discharge or satisfy any claimsmaterial claim, liabilities liability or obligations obligation (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge or satisfaction except in the ordinary course of business, (B) as required by business consistent with past practice or in accordance with their terms as in effect on the date of this Agreement of claimshereof;
(x) settle or compromise any litigation, liabilities investigation, arbitration, proceeding or obligations reflected claim (whether or reserved against in the most recent audited financial statements (or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed not commenced prior to the date hereof of this Agreement), other than settlements or compromises of litigation where the amount paid (after giving effect to insurance proceeds actually received) in settlement or compromise does not exceed the Company’s reserves on its books;
(xi) make (to the extent inconsistent with past practice) or change any material tax election, amend any income or other material Tax Return, apply for amounts not any rulings relating to Taxes or settle any material tax liability in excess of such reserves) or (C) incurred since the date of such financial statements amounts reserved therefor in the ordinary course of business, (ii) cancel any material Indebtedness owed to Pivotal or any of its Subsidiaries, or (iii) waive, release, grant or transfer any right of material valuelatest Company SEC Reports;
(kxii) (i) materially modify, materially amend, terminate, cancel, waive any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (ii) enter into any Contract that if in effect on the date hereof would except as may be a Material Contract, other than customer contracts entered into in the ordinary course of business;
(l) commence any Legal Proceeding (other than a Legal Proceeding required as a result of a Legal Proceeding commenced against Pivotal change in law or in GAAP, change any of the accounting methods, practices, policies or principles for financial accounting or Tax purposes;
(xiii) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its SubsidiariesSubsidiaries (other than the Merger);
(xiv) adopt or enter into any collective bargaining agreement or other labor union contract;
(xv) make any material changes to the insurance on its and its Subsidiaries assets without the Purchaser’s prior written consent, which consent shall not be unreasonably delayed or withheld;
(xvi) authorize any of, or compromise, settle commit or agree to settle take any Legal Proceedingof, other than Transaction Litigation the foregoing actions. Xxxx Xxxxxx is the contact person designated by the Purchaser to administer the process pursuant to which is subject any consent required from the Purchaser under this Section 5.1(a) would be sought. Purchaser agrees to section 5.7)respond to any consent requests promptly, compromises, settlements or agreements in the ordinary course of business that involve only the payment of money damages not in excess of $500,000 individually or $2,000,000 in the aggregate, and in any case without event within five (5) Business Days.
(b) The Company will consult with Purchaser prior to entering into or amending any contract that would require Purchaser’s consent under Section 5.1(a)(i).
(c) The Company and Purchaser shall not knowingly take any action that could reasonably be expected to cause any of the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal representations and warranties made by it to become untrue or any of its Subsidiaries;
(m) change its financial the conditions to the Merger to not be satisfied. The Company and Purchaser shall promptly notify the other party if to such party’s knowledge any representation or Tax accounting methods, principles warranty made by it should become untrue or practices, except insofar as may have been required by a change if it fails to comply in GAAP or applicable Law;
(n) settle or compromise any material liability for Taxes respect with any covenant or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change condition under the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liability; consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of a material amount of Taxes; grant any power of attorney with respect to material Taxes; enter into any Tax Sharing Agreement or any closing agreement or other similar agreement; or change any method of accounting for Tax purposes;Agreement.
Appears in 1 contract
Samples: Merger Agreement (Variflex Inc)
Conduct of Business. During (a) Except as set forth in Section 5.2 of the Company Disclosure Schedule, as expressly permitted by this Agreement or as required by applicable Law, during the period from the date of this Agreement to until the Effective Time, except as consented to unless Parent otherwise consents in writing in advance by VMware (such consent not to be unreasonably withheld, conditioned or as otherwise expressly required or prohibited (including by delayed), the restrictions set forth in subclauses (a) through (r) below) by this Agreement, Pivotal Company shall, and shall cause each of its Subsidiaries to, carry on (x) conduct its business in all material respects in the ordinary course, including its development and sales efforts as currently contemplatedcourse consistent with past practice, and (y) to the extent consistent with the foregoing, use commercially reasonable efforts to (i) maintain and preserve intact its business organization, assets, rights organization and properties, (ii) keep available the goodwill of those having business relationships with it and retain the services of its current officerspresent officers and key employees, employees and consultants and (iii) preserve in each case, to the end that its goodwill and its relationships with customers, suppliers, licensors, licensees, distributors and others having material ongoing business dealings with itshall be unimpaired at the Effective Time. In addition to and without Without limiting the generality of the foregoing, except as set forth in Section 5.2 of the Company Disclosure Schedule, as expressly permitted by this Agreement or as required by applicable Law, during the period from the date of this Agreement to the Effective Time, except (x) as set forth in section 5.1 of the Pivotal Disclosure Letter, (y) as specifically required by this Agreement or (z) as specifically required by applicable Law, Pivotal Company shall not, and shall not permit any of its SubsidiariesSubsidiaries to, without VMware’s prior written unless Parent otherwise consents in writing (such consent (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall not to be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), to:):
(a) (i) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock or other equity interests, except for dividends by a wholly owned Subsidiary of Pivotal to Pivotal or any other wholly owned Subsidiary of Pivotal, (ii) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii) split, combine, reclassify or otherwise amend the terms of any of its capital stock or other equity 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 other equity interests;
(b) issue, deliver, sell, grant, dispose of, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) any shares of its capital stock stock, voting securities or other equity interests interests, or any securities or rights convertible into, exchangeable for or exercisable for, or evidencing the right to subscribe for any such shares of its capital stock, voting securities or other equity interests, or any rights, warrants warrants, options, calls, commitments or options any other agreements of any character to acquirepurchase or acquire any shares of its capital stock, voting securities or equity interests or any securities or rights convertible into, exchangeable or exercisable for, or evidencing the right to subscribe for, any such shares of its capital stock, voting securities or other equity interests, or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive provided that (x) the Company may issue shares of capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof (other than the issuance of Class A Shares Company Common Stock upon the exercise of Pivotal Options, options granted under the Company Stock Plans and the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPPWarrants, Restricted Stock Units and Deferred Stock Units, in each case, that are outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with the terms thereof or granted pursuant to Section 5.2(a)(viii) of the Company Disclosure Schedule, (y) the Company may issue equity interests, options and other rights in accordance with Section 5.2(a)(viii) of the Company Disclosure Schedule and (z) capital stock, voting securities or equity interests of the Company’s Subsidiaries may be (1) issued to the Company or a direct or indirect wholly owned Subsidiary of the Company and (2) pledged to the extent required under the Company’s existing credit agreements listed on Section 3.13(a) of the Company Disclosure Schedule; (B) redeem, purchase or otherwise acquire any of its outstanding shares of capital stock, voting securities or equity interests, or any rights, warrants, options, calls, commitments or any other agreements of any character to acquire any shares of its capital stock, voting securities or equity interests, except in connection with the forfeiture of any awards granted under any Company Stock Plan or the withholding of shares of Company Common Stock to satisfy Tax obligations with respect to awards granted pursuant to the Company Stock Plans; (C) declare, set aside for payment or pay any dividend on, or make any other distribution in respect of, any shares of its capital stock or otherwise make any payments to its stockholders in their terms capacity as in effect on such date(other than dividends by a direct or indirect wholly owned U.S. Subsidiary of the Company to its parent);
; (cD) split, combine, subdivide or reclassify any shares of its capital stock; or (E) amend (including by reducing an exercise price or otherwise changeextending a term) or waive any of its rights under, or authorize accelerate the vesting under, any provision of the Company Stock Plans or propose to amend any agreement evidencing any outstanding stock option or otherwise change, its certificate of incorporation or bylaws (or similar organizational documents);
(d) directly or indirectly acquire or agree other right to acquire (i) by merging or consolidating with, purchasing a substantial equity interest in or a substantial portion capital stock of the assets of, making an investment in Company or loan any restricted stock purchase agreement or capital contribution to any similar or in any other manner, any corporation, partnership, association or other business organization or division thereof or (ii) any assets that are otherwise material to Pivotal and its Subsidiaries, exceptrelated contract, in each case, except as provided in this Agreement;
(ii) except as contemplated in Section 5.2(a)(ii) of the Company Disclosure Schedule, incur or assume any indebtedness for borrowed money or guarantee any indebtedness (1or enter into a “keep well” or similar agreement) capital expenditures which shall be subject or issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, other than (A) revolving credit borrowings by the Company and the other borrowers under the existing credit agreement listed as Item 1 on Section 3.13(a)(i) of the Company Disclosure Schedule (the “Existing Revolver Facility”) and issuances of letters of credit thereunder in the ordinary course of business in amounts not in excess of $500,000,000 in the aggregate outstanding at any time under the Existing Revolver Facility and guarantees of such borrowings to the limitations extent required under the terms of clause (i) below such Existing Revolver Facility, and (2B) purchases borrowings from or guarantees among the Company and the direct and indirect wholly owned Subsidiaries of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes the Company in the ordinary course of business consistent with Pivotal’s investment management policypast practice;
(iii) sell, and except transfer, lease, mortgage, encumber or otherwise dispose of or subject to any Lien (including pursuant to a sale-leaseback transaction or an asset securitization transaction) other than a Permitted Lien, any of its properties or assets (including securities of Subsidiaries) with a fair market value in excess of $2,000,000 individually or $15,000,000 in the case aggregate to any Person, except (A) sales or other dispositions of clause inventory in the ordinary course of business consistent with past practice (iiincluding in connection with, but not limited to, store relocations, closings and remodels), acquisitions (B) pursuant to Contracts in force at the date of inventorythis Agreement and listed on Section 5.2(a)(iii) of the Company Disclosure Schedule, products (C) dispositions of obsolete, surplus or services worn out assets or assets that are no longer useful to the conduct of the business of the Company, (D) voluntary termination or surrender of Real Property Leases in the ordinary course of business; Table , (E) settlement of Contentsclaims permitted under clause (xiii) below, (F) transfers among the Company and its Subsidiaries, or (G) sales or dispositions of investment assets by Insurance Companies in the ordinary course of business;
(eiv) make any capital expenditure or expenditures which (A) involves the purchase of real property or (B) is in excess of $2,000,000 individually or $15,000,000 in the aggregate, except for any such capital expenditures provided for in the Company’s 2014 Capital Expenditure Plan or 2015 Capital Expenditure Plan set forth in Section 5.2(a)(iv) of the Company Disclosure Schedule;
(v) directly or indirectly sellacquire (A) by merging or consolidating with, leaseor by purchasing all of or a substantial equity interest in, licenseor by any other manner, sell and leaseback, abandon, allow to lapse, mortgage any Person or otherwise encumber division or subject to any Lien or otherwise dispose in whole or in part business of any Person or, (B) except in the ordinary course of its material propertiesbusiness consistent with past practice, any assets or rights (including any material Pivotal Intellectual Property Registrations) or any interest therein, exceptexcluding inventory acquired in the ordinary course of business), in each case, for aggregate consideration in excess of $15,000,000;
(ivi) salesexcept for Real Property Leases entered into, pledgesamended, dispositionsextended, renewed, assigned, subleased, surrendered or terminated in the ordinary course of business consistent with past practice (A) enter into, terminate or amend any Material Contract, other than in the ordinary course of business, consistent with past practice, (B) enter into any Contract that would be breached by, or require the consent of any third party in order to continue in full force following, consummation of the Transactions or (C) release any Person from, or modify or waive any provision of, any standstill or similar agreement, or any material standalone confidentiality agreement in favor of the Company;
(vii) make any investment (by contribution to capital, property transfers, abandonments, leases, licenses, lapses, expirationspurchase of securities or otherwise) in, or encumbrances loan or advance (other than travel and similar advances to its employees in the ordinary course of business consistent with past practice) to, any Person other than a direct or indirect wholly owned Subsidiary of the Company in the ordinary course of business (other than, in the case of the Insurance Companies, investments in the ordinary course of business consistent with past practice);
(viii) Except as required to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal and (1) applicable Law or (2) the terms of any Company Plan in existence as of the date of this Agreement, (A) increase in any manner the salary or other compensation of any current or former directors, officers, employees or consultants of the Company or any of its Subsidiaries, taken other than increases to current officers and employees in the ordinary course of business consistent with past practice in both amount and timing so long as such increases do not, in the aggregate, exceed three percent (3%) of all such officers’ and employees’ annual base salaries and wages as of the date of this Agreement, (B) grant any unusual or extraordinary bonus, benefit or other direct or indirect compensation to any current or former director, officer, employee, or consultant, (C) make any loan to any current or former director, officer, employee, or consultant, or (D) enter into, establish, amend or terminate any Company Plan (or plan, program, agreement, policy, practice, or arrangement that would be a whole Company Plan if in existence as of the date hereof); provided, however, that the foregoing clauses (A) and (iiD) Ordinary Course Licenses Outshall not restrict the Company or any of its Subsidiaries from entering into or making available to newly hired employees below the level of vice president (“Non-Officer Employees”) or in connection with the promotion based on job performance or workplace requirements of a Non-Officer Employee to a position below the level of vice president, in each case, in the ordinary course of business consistent with past practice, compensation and benefits (excluding equity grants and any incentive compensation other than annual cash-based incentive compensation plans) that are comparable with the compensation and benefits provided to newly hired or promoted Non-Officer Employees in similar positions;
(fix) enter into, establish, amend or terminate any collective bargaining or other labor agreement or arrangement, except as required by applicable Law;
(x) (A) make, change or revoke any material election concerning Taxes or Tax Returns, file any material amended Tax Return, enter into any material closing agreement pursuant to Section 7121 of the Code (or any similar provision of Law), file any Tax Return unless such Tax Return shall have been prepared consistent with past practice, settle any Tax claims or assessments that require payment in excess of $1,000,000 in any single instance or $5,000,000 in the aggregate, surrender any right to claim a refund of Taxes or obtain any Tax ruling or (B) become a party to any Tax sharing, allocation, indemnity or similar agreement or arrangement (whether written or oral) involving the Company or any of its Subsidiaries;
(xi) make any material changes in financial accounting methods, principles or practices (or change an annual accounting period), except insofar as may be required by a change in GAAP, SAP or applicable Law;
(xii) amend the Company Charter Documents or the Subsidiary Documents;
(xiii) adopt or enter into a plan or agreement of complete or partial liquidation, dissolution, restructuring, recapitalization recapitalization, merger, consolidation or other reorganizationreorganization (other than transactions exclusively between wholly owned Subsidiaries of the Company);
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, other than Pivotal or any direct or indirect wholly owned Subsidiary of Pivotal;
(i) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto that in the aggregate are in excess of $1,000,000;
(j) except as required by any judgment by a court of competent jurisdiction, (ixiv) pay, discharge, settle or satisfy any claims, litigation, proceedings, investigations, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), ) other than the payment, discharge, settlement or satisfaction in accordance with their terms of liabilities, claims or obligations (A) that require payment by the payment, discharge Company or satisfaction in the ordinary course any of business, (B) as required by their terms as in effect on the date its Subsidiaries of this Agreement of claims, liabilities or obligations cash amounts that are reflected or reserved against in the most recent audited consolidated financial statements (or the notes thereto) of Pivotal the Company and its Subsidiaries included in the Pivotal Company SEC Documents filed prior or (B) to the date hereof (for amounts not extent in excess of such reserves) and/or not covered by clause (A), that do not exceed $2,000,000 in any single instance or $15,000,000 in the aggregate, (except for any claim, litigation, proceeding, investigation, liability or obligation relating to Taxes, which shall be exclusively governed by Section 5.2(x)), (C) incurred since the date of such financial statements in the ordinary course of business, (ii) cancel that do not involve any material Indebtedness owed to Pivotal injunctive or any equitable relief or impose material restrictions on the business activities of the Company and its Subsidiaries, taken as a whole, (D) that do not relate to the Transactions contemplated hereby, (E) that do not involve the issuance by the Company of equity or voting interests or (iiiF) waive, release, grant or transfer any right of material value;
(k) (i) materially modify, materially amend, terminate, cancel, waive any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (ii) enter into any Contract that if in effect on the date hereof would be a Material Contract, other than customer contracts entered into by Insurance Companies in the ordinary course of business;
(lxv) commence sell, assign, transfer, convey, license, sublicense, covenant not to assert, abandon, allow to lapse, lease or otherwise dispose of (A) any Legal Proceeding (other than a Legal Proceeding as a result Company Intellectual Property comprised of a Legal Proceeding commenced against Pivotal or any of its Subsidiaries)Marks, or compromise(B) any other material Company Intellectual Property, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements in each case except in the ordinary course of business that involve only the payment of money damages not in excess of $500,000 individually or $2,000,000 in the aggregate, in any case without the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal or any of its Subsidiariesconsistent with past practice;
(mxvi) make any material change its financial in the underwriting, claims, administration, pricing, reserving or Tax accounting methods, principles or practicesreinsurance practices of any Insurance Company, except insofar as may have been required by a change in applicable Law, GAAP or applicable Law;SAP or changes in the interpretation or enforcement thereof; or
(nxvii) settle agree, in writing or compromise otherwise, to take any of the foregoing actions.
(b) None of Parent, Merger Sub or (subject to Section 5.3) the Company shall knowingly take or permit any of their respective Subsidiaries to take any action that would reasonably be expected to prevent or to impede, interfere with, hinder or delay in any material liability for Taxes or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change respect the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liability; consent to any extension or waiver consummation of the limitation period applicable to any claim or assessment in respect of a material amount of Taxes; grant any power of attorney with respect to material Taxes; enter into any Tax Sharing Agreement or any closing agreement or Merger and the other similar agreement; or change any method of accounting for Tax purposes;transactions contemplated hereby.
Appears in 1 contract
Samples: Merger Agreement (Zale Corp)
Conduct of Business. During the period from the date of this Agreement to the Effective Time, except as consented to in writing in advance by VMware or as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (a) through Except as (rI) below) permitted by this Agreement, Pivotal shall, and shall cause each of its Subsidiaries to, carry on its business (II) required by applicable Law or (III) set forth in the ordinary course, including its development and sales efforts as currently contemplated, and use commercially reasonable efforts to (i) preserve intact its business organization, assets, rights and properties, (ii) keep available the services of its current officers, employees and consultants and (iii) preserve its goodwill and its relationships with customers, suppliers, licensors, licensees, distributors and others having material business dealings with it. In addition to and without limiting the generality Section 5.1 of the foregoingCompany Disclosure Schedule, during the period from the date of this Agreement to until the Effective TimePurchase Date, except unless Parent otherwise consents in writing (x) as set forth the Company shall, and shall cause each of its subsidiaries to, conduct its business in section 5.1 of all material respects in the Pivotal Disclosure Letterordinary course, (y) as specifically required by this Agreement or the Company shall use its commercially reasonable efforts to preserve the current relationships of the Company and its subsidiaries with their respective customers, vendors, suppliers and other persons with which they have business relationships and (z) as specifically required by applicable Law, Pivotal the Company shall not, and shall not permit any of its Subsidiaries, without VMware’s prior written consent (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), subsidiaries to:
(ai) (iA) issue, sell or grant any shares of its capital stock, voting securities or equity interests, or any securities or rights convertible into, exchangeable or exercisable for, or evidencing the right to subscribe for any shares of its capital stock, voting securities or equity interests, or any warrants, options or rights to purchase or acquire any shares of its capital stock, voting securities or equity interests or any securities or rights convertible into, exchangeable or exercisable for, or evidencing the right to subscribe for, any shares of its capital stock, voting securities or equity interests, provided that (x) the Company may issue shares of Company Common Stock upon the exercise of options that are outstanding on the date hereof and (y) capital stock, voting securities or equity interests of the Company's subsidiaries may be (1) issued to the Company or a direct or indirect wholly owned subsidiary of the Company and (2) pledged to the extent required under the Credit Agreement, Note Agreement or any replacement thereof; (B) redeem, purchase or otherwise acquire any outstanding shares of capital stock, voting securities or equity interests of the Company, or any warrants, options or rights to acquire any shares of capital stock, voting securities or equity interests of the Company, (C) declare, set aside for payment or pay any dividends dividend on, or make any other distributions (whether in cash, stock or property) distribution in respect of, any of its capital stock or other equity interests, except for dividends by a wholly owned Subsidiary of Pivotal to Pivotal or any other wholly owned Subsidiary of Pivotal, (ii) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, other than the Company; (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iiiD) split, combine, subdivide or reclassify or otherwise amend the terms of any of its capital stock or other equity 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 other equity interests;
(b) issue, deliver, sell, grant, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) any shares of its capital stock or other equity interests or any securities convertible into, exchangeable for or exercisable for any such shares or other equity interests, or any rights, warrants or options to acquire, any such shares or other equity interests, or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive shares of capital stock of VMware on a deferred basis the Company; or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof (other than the issuance of Class A Shares upon the exercise of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPP, in each case, that are outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with their terms as in effect on such date);
(cE) amend or otherwise change, or authorize or propose to amend or otherwise change, its certificate of incorporation or bylaws (or similar organizational documents);
(d) directly or indirectly acquire or agree to acquire (i) by merging or consolidating with, purchasing a substantial equity interest in or a substantial portion of the assets of, making an investment in or loan or capital contribution to or in any other manner, any corporation, partnership, association material respect or other business organization or division thereof or (ii) any assets that are otherwise material to Pivotal and its Subsidiaries, except, in each case, for (1) capital expenditures which shall be subject to the limitations of clause (i) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes in the ordinary course of business consistent with Pivotal’s investment management policy, and except in the case of clause (ii), acquisitions of inventory, products or services in the ordinary course of business; Table of Contents
(e) directly or indirectly sell, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien or otherwise dispose in whole or in part of waive any of its material propertiesrights under, assets or rights (including accelerate the vesting under, any material Pivotal Intellectual Property Registrations) provision of the Stock Plans or any interest therein, except, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, agreement evidencing any outstanding option or encumbrances required other right to be effected prior to acquire capital stock of the Effective Time pursuant to existing Contracts that are not material to Pivotal and its Subsidiaries, taken as a whole and Company or any restricted stock purchase agreement or any related contract;
(ii) Ordinary Course Licenses Out;
incur any indebtedness for borrowed money or guarantee any such indebtedness (f) adopt including factoring or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (ii) make any loans, advances or capital contributions to, or investments in, any other Personoff balance sheet financing), other than Pivotal or any borrowings from the Company by a direct or indirect wholly owned Subsidiary subsidiary of Pivotalthe Company;
(iiii) incur sell, lease or commit dispose of any properties or assets that are material to incur the Company and its subsidiaries, taken as a whole, to any capital expenditure Person (other than to the Company or authorization a direct or commitment with respect thereto that in indirect wholly owned subsidiary of the aggregate are in excess of $1,000,000;
(j) except as required by any judgment by a court of competent jurisdiction, (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwiseCompany), other than except (A) the payment, discharge or satisfaction sales of inventory in the ordinary course of business, (B) as required by their terms as in effect on the date dispositions of this Agreement of claims, liabilities obsolete or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements worthless assets in the ordinary course of business, (ii) cancel any material Indebtedness owed to Pivotal or any of its Subsidiaries, or (iiiC) waivefactoring of accounts receivable pursuant to the agreement between the Company and CIT Commercial Services, releaseas amended and restated, grant or transfer any right of material valuedated October 1, 2002;
(kiv) make capital expenditures, except capital expenditures (iA) materially modifymade pursuant to the Company's capital expenditure plan for the 2004 fiscal year set forth in Section 5.1(a)(iv) of the Company Disclosure Schedule (the "2004 CAP EX PLAN") and (B) not in excess of $300,000 individually, materially amendor $1,600,000 in the aggregate, terminatefor the Company and its subsidiaries taken as a whole during any month, cancelprovided that Parent shall not unreasonably withhold its consent with respect to the making of any capital expenditures in excess of the limitations set forth above;
(v) make investments in or acquisitions (by purchase of securities or assets, waive any material right under merger or extend any Material Contract consolidation, or otherwise) of other Persons, businesses or divisions thereof;
(vi) make loans or advances (other than renewals of Contracts with customers of Pivotal Products travel and similar advances to its employees, and trade credit to customers, in the ordinary course of business) to any Person other than the Company or a direct or indirect wholly owned subsidiary of the Company;
(vii) (A) enter into, terminate or amend in any material respect any contract or agreement that is material to the Company and its subsidiaries taken as a whole, or (iiB) enter into or extend the term or scope of any Contract contract or agreement that if purports to restrict the Company or any subsidiary from engaging in any line of business or in any geographic area;
(viii) increase the compensation of any of its directors, Covered Employees or other employees or enter into, establish or amend in any material respect any employment, retention, change in control, collective bargaining, bonus or other incentive compensation, profit sharing, health or other welfare, stock option or other equity (or equity-based), pension, retirement, vacation, severance, deferred compensation or other compensation or benefit plan, policy, agreement, trust, fund or arrangement with, for or in respect of, any director, executive officer or employee, other than (A) as required pursuant to applicable Law or the terms of agreements or commitments in effect on as of the date hereof would be a Material Contractand listed in Section 5.1(a)(viii) of the Company Disclosure Schedule and (B) increases which are not applicable to employees generally in salaries, wages and benefits of employees (other than customer contracts entered into Covered Employees) made in the ordinary course of business;
(lix) commence make, revoke or change any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal material Tax election or any of its Subsidiaries), or compromise, settle or agree to settle compromise any Legal Proceedingmaterial Tax liability, other than Transaction Litigation which is subject an election not to section 5.7), compromises, settlements or agreements in have Section 382(l)(5) of the ordinary course of business that involve only the payment of money damages not in excess of $500,000 individually or $2,000,000 in the aggregate, in any case without the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal or any of its SubsidiariesCode apply;
(mx) change its make any changes in financial or Tax tax accounting methods, principles or practices, except insofar as may have been be required by a change in GAAP or applicable Law;
(nxi) amend the Company Charter Documents;
(xii) adopt a plan or agreement of complete or partial liquidation, dissolution, restructuring, recapitalization, merger, consolidation or other reorganization (other than (A) mergers or acquisitions permitted under clause (v) above or (B) transactions exclusively among the Company and wholly owned subsidiaries of the Company);
(xiii) settle or compromise any material liability litigation or proceeding (A) involving a cash payment of the Company or any of its subsidiaries of an amount in excess of $100,000 or (B) relating to any of the Transactions; or
(xiv) agree, in writing or otherwise, to take any of the foregoing actions or take any action or agree, in writing or otherwise, to take any action, which would cause the condition in paragraph (b) of Annex A not to be satisfied;
(xv) accelerate accounts receivable on an aggregate basis;
(xvi) delay payments to vendors or others to whom the Company owes payments on a general basis (except for Taxes disputed payments);
(xvii) renew, extend or surrender modify real estate leases; or
(xviii) create, or otherwise agree to, any restrictions on the ability of the Company or any of its subsidiaries to transfer cash (or cash equivalents) between accounts outside of and inside the United States or on the free use of such cash.
(b) Parent agrees that, during the period from the date of this Agreement until the Effective Time, except as expressly contemplated or permitted by this Agreement or as required by applicable Law, and except as may be agreed in writing by the Company, Parent shall not, and shall not permit any of its subsidiaries to, take any action or agree, in writing or otherwise, to take any action which would cause any of the representations or warranties of Parent or Purchaser set forth in this Agreement (A) that are qualified as to materiality or Material Adverse Effect to be untrue and (B) that are not so qualified to be untrue in any material claim for respect. In addition, Parent shall not, and shall not permit any of its subsidiaries to, acquire or agree to acquire by merging or consolidating with, or by purchasing a refund substantial portion of Taxes; file the assets of or equity in, or by any amended Tax Return other manner, any Person or claim for Tax refund; makeportion thereof, revoke or modify otherwise acquire or agree to acquire any assets, if the entering into of a definitive agreement relating to or the consummation of such acquisition, merger or consolidation would reasonably be expected to (i) impose any material Tax electiondelay in the obtaining of, or change significantly increase the entity classification risk of not obtaining, any authorizations, consents, orders, declarations or approvals of any Subsidiary for U.S. federal tax purposes; file Governmental Entity necessary to consummate the Transactions or the expiration or termination of any Tax Return other than in applicable waiting period, (ii) significantly increase the ordinary course risk of business and on a basis consistent with past practice that would materially and adversely affect its Tax liability; consent to any extension or waiver Governmental Entity entering an order prohibiting the consummation of the limitation period applicable to Transactions or (iii) materially delay the consummation of the Transactions.
(c) The Company shall give Purchaser notice of any claim or assessment in respect of a material amount of Taxes; grant any power of attorney with respect to material Taxes; enter into any Tax Sharing Agreement or any closing agreement or other similar agreement; effect, event or change any method of accounting for Tax purposes;which would reasonably be expected to have a Company Material Adverse Effect.
Appears in 1 contract
Conduct of Business. During the period from From the date of this Agreement to hereof until the Effective Time, the Company shall not, and the Company shall not permit the Company Subsidiary to, except as consented to in writing in advance by VMware or as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) contemplated by this Agreement, Pivotal shalldirectly or indirectly, and shall cause each of its Subsidiaries todo, carry on its business in the ordinary courseor propose to do, including its development and sales efforts as currently contemplated, and use commercially reasonable efforts to (i) preserve intact its business organization, assets, rights and properties, (ii) keep available the services of its current officers, employees and consultants and (iii) preserve its goodwill and its relationships with customers, suppliers, licensors, licensees, distributors and others having material business dealings with it. In addition to and without limiting the generality any of the foregoing, during following without the period from the date of this Agreement to the Effective Time, except (x) as set forth in section 5.1 of the Pivotal Disclosure Letter, (y) as specifically required by this Agreement or (z) as specifically required by applicable Law, Pivotal shall not, and shall not permit any of its Subsidiaries, without VMware’s prior written consent (which consentof Brooxx, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below xxich consent shall not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), to:
(a) (i) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock or other equity interests, except for dividends by a wholly owned Subsidiary of Pivotal to Pivotal or any other wholly owned Subsidiary of Pivotal, (ii) purchase, redeem amend or otherwise acquire shares of capital stock or other equity interests of Pivotal or modify its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii) split, combine, reclassify or otherwise amend the terms of any of its capital stock or other equity 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 other equity interestsOrganizational Documents;
(b) issue, deliver, sell, grantdispose of or Encumber or authorize the issuance, pledge sale, disposition or otherwise encumber Encumbrance of, or subject to grant or issue any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act option, warrant or other applicable securities Laws) right to acquire or make any agreement of the type referred to in Schedule 3.3 with respect to, any shares of its capital stock or any other equity interests of its securities or any securities security convertible into, exchangeable for or exercisable into or exchangeable for any such shares or other equity interestssecurities, or alter any rights, warrants term of any of its outstanding securities or options to acquire, make any such shares or other equity interests, or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive change in its outstanding shares of capital stock or its capitalization, whether by reason of VMware on a deferred basis reclassification, recapitalization, stock split, combination, exchange or other rights linked to the value readjustment of Class A Shares shares, stock dividend or Class B Shares, including pursuant to Contracts as in effect on the date hereof (other than the issuance of Class A Shares upon the exercise of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPP, in each case, that are outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with their terms as in effect on such date)otherwise;
(c) amend Encumber any material assets or otherwise change, properties of the Company or authorize or propose to amend or otherwise change, its certificate of incorporation or bylaws (or similar organizational documents)the Company Subsidiary;
(d) directly declare, set aside, make or indirectly pay any dividend or other distribution to any shareholder with respect to its capital stock;
(e) redeem, purchase or otherwise acquire any capital stock or agree to acquire (i) by merging or consolidating with, purchasing a substantial equity interest in or a substantial portion other securities of the assets of, making an investment in Company or loan or capital contribution to or in any other manner, any corporation, partnership, association the Company Subsidiary;
(f) increase the compensation or other business organization remuneration or division thereof benefits payable or (ii) to become payable to any assets that are otherwise material director or officer of the Company or the Company Subsidiary, or increase the compensation or other remuneration or benefits payable or to Pivotal and become payable to any of its Subsidiariesother employees or agents, except, in each casewith respect to such other employees or agents only, for (1increases in salary and payment of performance bonuses in the manner described in Schedule 5.2(f) capital expenditures which shall be subject to of the limitations of clause (i) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes Disclosure Schedule in either case in the ordinary course of business consistent with Pivotal’s investment management policy, and except in the case of clause (ii), acquisitions of inventory, products or services in the ordinary course of business; Table of Contents
(e) directly or indirectly sell, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien or otherwise dispose in whole or in part of any of its material properties, assets or rights (including any material Pivotal Intellectual Property Registrations) or any interest therein, except, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Out;
(f) adopt or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganizationpast practice;
(g) fail adopt or (except as otherwise required by law) amend or make any unscheduled contribution to maintainany Employee Benefit Plan for or with employees, or allow to lapse, or abandon, including by failure to pay the required fees in enter into any jurisdiction, any material Pivotal Intellectual Property Registrationscollective bargaining agreement;
(h) terminate or modify any Contract requiring future payments to or from the Company or the Company Subsidiary, individually or in the aggregate, in excess of $25,000, except for termination of Contracts upon their expiration during such period in accordance with their terms;
(i) create, incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, for any Indebtedness, or amend, modify or refinance any Indebtedness or indebtedness in an aggregate amount (iiamong the Company and the Company Subsidiary) make any loans, advances or capital contributions to, or investments in, any other Person, other than Pivotal or any direct or indirect wholly owned Subsidiary of Pivotal;
(i) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto that in the aggregate are in excess of $1,000,000;
50,000, except for draw downs made under the Credit Line to satisfy working capital requirements aggregating up to but not exceeding $341,000 and for blanket inventory purchases where neither the Company nor the Company Subsidiary shall make any payment or commitment in an aggregate amount (jincluding the Company and the Company Subsidiary) except as required by any judgment by a court of competent jurisdiction, (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge or satisfaction in the ordinary course of business, (B) as required by their terms as in effect on the date of this Agreement of claims, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves$50,000 (for purposes of this part of Section 5.2(i), obligations or liabilities that are paid, discharged or satisfied under Section 5.2(j) or (C) incurred since shall be included in determining whether the date of such financial statements in the ordinary course of business, (ii) cancel any material Indebtedness owed to Pivotal or any of its Subsidiariesforegoing basket amounts have been reached), or (iii) waiveguarantee or endorse any obligation or the net worth of any Person, release, grant or transfer any right except for endorsements of material value;
(k) (i) materially modify, materially amend, terminate, cancel, waive any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (ii) enter into any Contract that if in effect on the date hereof would be a Material Contract, other than customer contracts entered into negotiable instruments for collection in the ordinary course of business;
(lj) commence pay, discharge or satisfy any Legal Proceeding obligation or liability, absolute, accrued, contingent or otherwise, whether due or to become due, in an aggregate amount (other than a Legal Proceeding as a result including the Company and the Company Subsidiary) in excess of a Legal Proceeding commenced against Pivotal or any of its Subsidiaries)$50,000, or compromise, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements except for liabilities incurred in the ordinary course of business that involve only prior to the date hereof and blanket inventory purchases where the Company and the Company Subsidiary shall not make any payment of money damages not or commitment in an aggregate amount (including the Company and the Company Subsidiary) in excess of $500,000 individually 50,000 (for purposes of this Section 5.2(j), indebtedness that is created, incurred, assumed or $2,000,000 in for which the aggregate, in any case without the imposition of any equitable relief on, Company or the admission Company Subsidiary is otherwise liable under Section 5.2(i) shall be included in determining whether the foregoing basket amounts have been reached);
(k) sell, transfer, lease or otherwise dispose of wrongdoing by, Pivotal or any of its Subsidiaries;
(m) change its financial assets or Tax accounting methods, principles or practicesproperties, except insofar as may have been required by a change in GAAP or applicable Law;
(n) settle or compromise any material liability for Taxes or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liability; consent for a cash consideration equal to the fair value thereof at the time of such sale, transfer, lease or other disposition;
(l) cancel, compromise, release or waive any material debt, claim or right;
(m) make any loan or advance to any extension Person other than travel and other similar routine advances in the ordinary course of business consistent with past practice, or waiver acquire any capital stock or other securities or any ownership interest in, or substantially all of the limitation period applicable assets of, any other business enterprise;
(n) make any material capital investment or expenditure or capital improvement, addition or betterment;
(o) change its method of accounting or the accounting principles or practices utilized in the preparation of the Financial Statements, other than as required by GAAP;
(p) institute or settle any Proceeding before any Governmental Authority relating to any claim it or assessment in respect its assets or properties;
(q) adopt a plan of a material amount of Taxes; grant any power of attorney dissolution or liquidation with respect to material Taxes; the Company or the Company Subsidiary;
(r) enter into any Tax Sharing Agreement Contract, except Contracts made in the ordinary course of business consistent with past practice; 50
(s) make any new election with respect to Taxes or any closing change in current elections with respect to Taxes, or settle or compromise any federal, state, local or foreign Tax liability or agree to an extension of a statute of limitations;
(t) take or omit to take any action that would constitute a material violation of or material default under, or waive any rights under, any material Contract; or
(u) enter into any commitment to do any of the foregoing, or any action which would make any of the representations or warranties of the Company contained in this Agreement untrue or incorrect in any material respect (subject to the knowledge and materiality limitations set forth therein) or cause any covenant, condition or agreement of the Company in this Agreement not to be complied with or other similar agreement; or change satisfied in any method of accounting for Tax purposes;material respect.
Appears in 1 contract
Conduct of Business. During the period from (a) The Company agrees that, between the date of this Agreement to and the Effective Time, except as consented to in writing in advance by VMware or as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (aSection 5.1(a) through (r) below) by this Agreement, Pivotal shall, and shall cause each of its Subsidiaries to, carry on its business in the ordinary course, including its development and sales efforts as currently contemplated, and use commercially reasonable efforts to (i) preserve intact its business organization, assets, rights and properties, (ii) keep available the services of its current officers, employees and consultants and (iii) preserve its goodwill and its relationships with customers, suppliers, licensors, licensees, distributors and others having material business dealings with it. In addition to and without limiting the generality of the foregoingCompany Disclosure Schedule, during the period from the date of this Agreement to the Effective Time, except (x) as set forth in section 5.1 of the Pivotal Disclosure Letter, (y) as specifically expressly required by applicable Law or required or permitted by this Agreement or (z) as specifically required by applicable Law, Pivotal shall not, and shall not permit any of its Subsidiaries, without VMware’s otherwise with the prior written consent of Parent (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below consent shall not be unreasonably withheld, conditioned or delayed), the Company will, and will cause each Company Subsidiary to, (i) conduct its business only in all the ordinary course of business consistent with past practice, (ii) use its commercially reasonable efforts to keep available the services of the current officers, employees and consultants of the Company and each Company Subsidiary and preserve the goodwill and current relationships of the Company and each Company Subsidiary with customers, suppliers and other cases Persons with which the Company or any Company Subsidiary has significant business relations and (iii) use its commercially reasonable efforts to preserve intact its business organization.
(b) Without limiting the foregoing, except as set forth in Section 5.1 of the Company Disclosure Schedule, as expressly required by applicable Law or required by this Agreement, or otherwise with the prior written consent of Parent (which consent shall not be in VMware’s sole discretionunreasonably withheld, conditioned or delayed), the Company shall not, and shall not permit any Company Subsidiary to, between the date of this Agreement and the Effective Time, directly or indirectly, do any of the following:
(ai) amend the certificate of incorporation, bylaws or other comparable charter or organizational documents (whether by merger, consolidation or otherwise) of the Company or any Company Subsidiary;
(ii) (iA) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock stock, property or propertyotherwise) in respect of, or enter into any of its agreement with respect to the voting of, any capital stock of the Company or any Company Subsidiary (other equity interests, except for than dividends and distributions by a direct or indirect wholly owned Subsidiary of Pivotal the Company to Pivotal its parent, distributions under the Company ESPP of no more than 142,000 shares and distributions resulting from the vesting or any other wholly owned Subsidiary exercise of Pivotal, (ii) purchase, redeem Company Options or otherwise acquire shares the vesting and settlement of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and Company RSUs outstanding on the date of this Agreement or as permitted by this Agreement), in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii) split, combine, combine or reclassify or otherwise amend the terms of any of its capital stock of the Company or other equity interests or any Company Subsidiary, (C) issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for for, shares of its capital stock of the Company or other equity interestsany Company Subsidiary, (D) purchase, redeem or otherwise acquire any Equity Interest in the Company or any Company Subsidiary except for acquisitions of Company Common Stock by the Company in satisfaction by holders of Company Options or Company RSUs, outstanding on the date of this Agreement, of the applicable exercise price or withholding taxes or (E) take any action that would result in any amendment, modification or change of any term of any Indebtedness of the Company or any Company Subsidiary;
(biii) (A) issue, deliver, sell, grant, pledge or otherwise encumber or pledge, transfer, subject to any Lien (other than transfer restrictions Permitted Liens) or otherwise encumber or dispose of general applicability as may be provided under any Equity Interest in the Securities Act or other applicable securities Laws) any shares of its capital stock or other equity interests Company or any securities convertible intoCompany Subsidiary, exchangeable for or exercisable for any such shares or other equity interests, or any rights, warrants or options to acquire, any such shares or other equity interests, or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive shares of capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof (other than the issuance of Class A Shares shares of Company Common Stock upon the exercise of Pivotal Options, the settlement of Pivotal Company Options and Company RSUs or the exercise of purchase rights under the Pivotal ESPP, in each case, that are outstanding on the date of this Agreement and Made Available to VMware and otherwise Agreement, in each case in accordance with their the applicable equity award’s terms as in effect on such datethe date of this Agreement and the rights to purchase Company Common Stock under the Company ESPP or (B) amend any term of any Equity Interest of the Company or any Company security (in each case, whether by merger, consolidation or otherwise);
(civ) amend adopt a plan or otherwise changeagreement of, or authorize resolutions providing for or propose authorizing, complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization, each with respect to amend the Company or otherwise change, its certificate of incorporation or bylaws (or similar organizational documents)any Company Subsidiary;
(dv) directly other than Contracts entered into, amended or indirectly acquire or agree to acquire (i) by merging or consolidating with, purchasing a substantial equity interest in or a substantial portion of the assets of, making an investment in or loan or capital contribution to or in any other manner, any corporation, partnership, association or other business organization or division thereof or (ii) any assets that are otherwise material to Pivotal renewed with customers and its Subsidiaries, except, in each case, for (1) capital expenditures which shall be subject to the limitations of clause (i) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes suppliers in the ordinary course of business consistent with Pivotal’s investment management policy, and except past practice on terms that are substantially similar in the case aggregate to the existing Company Material Contracts, (A) terminate, cancel, renew or agree to any material amendment of, material change in or material waiver under any Company Material Contract, (B) enter into any Contract that, if existing on the date hereof, would be a Company Material Contract or (C) amend any Contract in existence on the date hereof that, after giving effect to such amendment, would be a Company Material Contract;
(vi) incur any capital expenditures or any obligations or liabilities in respect thereof in excess of clause $250,000 in the aggregate in any fiscal quarter;
(iivii) acquire (A) any material business, assets or capital stock of any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, or otherwise), acquisitions of inventory, products or services (B) acquire or license from any Person any Intellectual Property Rights or Technology other than in the ordinary course of business; Table of Contentsbusiness consistent with past practice;
(eviii) directly or indirectly (A) sell, lease, license, sell and leasebackpledge, transfer, exchange, abandon, allow disclaim, forfeit, grant rights in or access to lapseother Persons, mortgage or otherwise encumber or subject to any Lien or otherwise dispose in whole or in part of any of its Intellectual Property Rights or Technology, material properties, assets or rights material properties (including any material Pivotal Intellectual Property RegistrationsCompany Products) or any interest therein, except, in each case, except (i1) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts that are not material or commitments in effect prior to Pivotal the execution of this Agreement, (2) sales of tangible Inventory or used equipment in the ordinary course of business consistent with past practice or (3) Permitted Liens, (B) sell, dispose of, disclose, or license the source code for Company Proprietary Software to any Person (other than immaterial portions of source code of Company Proprietary Software provided pursuant to a software development kit license or disclosed in connection with trials, demonstrations or similar arrangements, in each case on a non-exclusive basis, in the ordinary course of business consistent with past practice and its Subsidiariessubject to written non-disclosure and non-use restrictions imposed on and agreed to by the recipient), taken as (C) disclose any trade secrets or other proprietary and confidential information to any Person other than in the ordinary course of business consistent with any contractual obligations and past practice and provided such Person is subject to a whole and confidentiality or non-disclosure agreement requiring such Person to maintain the confidentiality thereof or (iiD) Ordinary Course Licenses Outenter into any arrangement, the result of which is the loss, expiration or termination of any license or right under or to any Third Party Intellectual Property (excluding any licenses to commercially available “off-the-shelf” Software);
(fix) adopt except as required by Law or to comply with any Company Employee Plan as in effect on the date of this Agreement: (A) grant to any current or former director, officer, employee or consultant of the Company or any Company Subsidiary any (1) increase in compensation, (2) bonus or (3) other benefits, except for increases in the compensation or grants of bonuses in the ordinary course of business consistent with the Company’s or a Company Subsidiary’s past practices for employees below the level of Vice President or as agreed to in writing prior to the date of this Agreement and disclosed in Section 3.11(a) of the Company Disclosure Schedule, (B) grant to any current or former director, officer, employee or consultant of the Company or any Company Subsidiary any severance or termination pay or benefits or any increase in severance, change of control or termination pay or benefits, (C) except as otherwise contemplated pursuant to Section 5.10 hereof, establish, adopt, enter into or amend any Company Employee Plan (other than offer letters that contemplate “at will” employment without severance benefits) or collective bargaining agreement, in each case except as required by applicable Law, (D) take any action to amend or waive any performance or vesting criteria or accelerate any rights or benefits or take any action to fund or in any other way secure the payment of compensation or benefits under any Company Employee Plan except to the extent required pursuant to the terms as in effect as of the date of this Agreement of any Company Employee Plan disclosed in Section 3.11(a) of the Company Disclosure Schedule or applicable Law, (E) make any Person a beneficiary of any retention plan under which such Person is not as of complete the date of this Agreement a beneficiary which would entitle such Person to vesting, acceleration or partial liquidationany other right as a consequence of consummation of the transactions contemplated by this Agreement, dissolutionor (F) fire or involuntary terminate any officer of the Company, restructuring, recapitalization or other reorganizationthan for cause;
(gx) fail to maintain(A) write-down any of its material assets, including any capitalized Inventory or allow to lapseCompany IP, in excess of $250,000, except for depreciation and amortization in accordance with GAAP or abandonin accordance with the ordinary course of business consistent with past practice or (B) make any change in any method of financial accounting principles, method or practices, in each case except for any such change required by GAAP or applicable Law, including Regulation S-X under the Exchange Act (in each case following consultation with the Company’s independent auditor);
(xi) (A) incur any Indebtedness in an amount in excess of $250,000 or modify in any material respect the terms of any Indebtedness, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume way of a guarantee or otherwise become liable foran issuance or sale of debt securities, or repayissue and sell options, cancelwarrants, forgive calls or prepay, other rights to acquire any Indebtedness, debt securities of the Company or amend, modify or refinance any Indebtedness Company Subsidiary or (iiB) make any loans, advances or capital contributions to, or investments in, any other Person, other than Pivotal or any direct or indirect wholly owned Subsidiary of Pivotal;
(i) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto that in the aggregate are Person in excess of $1,000,000;
(j) except as required by any judgment by a court of competent jurisdiction, (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise)250,000, other than (A1) to the payment, discharge Company or satisfaction any Company Subsidiary or (2) accounts receivable and extensions of credit in the ordinary course of business, (B) as required by their terms as and advances in effect on the date of this Agreement of claimsexpenses to employees, liabilities or obligations reflected or reserved against in each case in the ordinary course of business consistent with past practice;
(xii) agree to any exclusivity, non-competition, most recent audited financial statements favored nation, or similar provision or covenant restricting the Company or any Company Subsidiary from competing in any line of business or with any Person or in any area or engaging in any activity or business (including with respect to the development, manufacture, marketing or distribution of their respective products or services);
(xiii) make, change or rescind any material Tax election, change any annual Tax accounting period, adopt or change any material method of Tax accounting, amend any material Tax Returns or file any material claim for Tax refunds, enter into any material closing agreement, enter into any Tax allocation agreement, Tax sharing agreement or Tax indemnity agreement, settle or compromise any material Tax claim, audit, assessment, investigation or controversy, surrender any right to claim a material Tax refund or credit, file any Tax Return relating to the Company or any of the Company Subsidiaries that has been prepared in a manner that is inconsistent with the past practices of the Company or such Company Subsidiary, as applicable, or agree to an extension or waiver of the statute of limitations with respect to the assessment or determination of Taxes;
(xiv) (A) compromise or settle (or agree to do any of the notes theretopreceding with respect to) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements any Action, other than in the ordinary course of business, (ii) cancel any material Indebtedness owed to Pivotal or any of its Subsidiaries, or (iiiB) waive, relinquish, release, grant grant, transfer or transfer assign any right with a value of material valuemore than $250,000 in any individual case;
(kxv) (i) materially modifycancel or terminate or allow to lapse without commercially reasonably substitute policy therefor, materially amend, terminate, cancel, waive or amend in any material right under respect or extend enter into, any Material Contract (material Insurance Policy, other than renewals the renewal of Contracts existing Insurance Policies or enter into commercial reasonable substitute policies therefor;
(xvi) cancel or terminate or allow to lapse any Company Permit;
(xvii) take any action that is intended or would reasonably be expected to result in any of the conditions and requirements of the Offer set forth in Annex I or the conditions to the Merger set forth in ARTICLE VI not being satisfied;
(xviii) except as required by applicable Law, convene any regular or special meeting (or any adjournment thereof) of the stockholders of the Company;
(xix) make any material change in its investment policies with customers of Pivotal Products in the ordinary course of businessrespect to cash or marketable securities; or
(xx) authorize or (ii) enter into any Contract that if in effect on the date hereof would be a Material Contract, other than customer contracts entered into in the ordinary course of business;
(l) commence or otherwise make any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal or commitment to do any of the foregoing. 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)Subsidiaries at any time prior to the Expiration Date. Prior to the Expiration Date, or compromisethe Company and its Subsidiaries shall exercise, settle or agree to settle any Legal Proceedingconsistent with the terms and conditions of this Agreement, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements in the ordinary course of business that involve only the payment of money damages not in excess of $500,000 individually or $2,000,000 in the aggregate, in any case without the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal or any of its Subsidiaries;
(m) change its financial or Tax accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law;
(n) settle or compromise any material liability for Taxes or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of complete control and supervision over their own business and on a basis consistent with past practice that would materially and adversely affect its Tax liability; consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of a material amount of Taxes; grant any power of attorney with respect to material Taxes; enter into any Tax Sharing Agreement or any closing agreement or other similar agreement; or change any method of accounting for Tax purposes;operations.
Appears in 1 contract
Samples: Merger Agreement (Corning Inc /Ny)
Conduct of Business. During (a) Conduct of Business by the period from Company. Except as set forth on Section 4.1(a) of the date of Company Disclosure Letter, except as otherwise contemplated by this Agreement to the Effective Time, or except as consented to in writing in advance by VMware or as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) by this Agreement, Pivotal shall, and shall cause each of its Subsidiaries to, carry on its business in the ordinary course, including its development and sales efforts as currently contemplated, and use commercially reasonable efforts to (i) preserve intact its business organization, assets, rights and properties, (ii) keep available the services of its current officers, employees and consultants and (iii) preserve its goodwill and its relationships with customers, suppliers, licensors, licensees, distributors and others having material business dealings with it. In addition to and without limiting the generality of the foregoingParent, during the period from the date of this Agreement to the Effective Time, except (x) as set forth the Company shall, and shall cause the Company Subsidiaries to, carry on their respective businesses in section 5.1 the ordinary course consistent with past practice and, to the extent consistent therewith, use all reasonable efforts to preserve intact their current business organizations, use all reasonable efforts to keep available the services of their current officers and other key employees and preserve their relationships with customers, suppliers, distributors and other persons having business dealings with them. Without limiting the generality of the Pivotal Disclosure Letterforegoing (but subject to the above exceptions), (y) as specifically required by during the period from the date of this Agreement or (z) as specifically required by applicable Lawto the Effective Time, Pivotal the Company shall not, not and shall not permit any of its Subsidiaries, without VMware’s prior written consent (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), Company Subsidiary to:
(ai) (iA) other than dividends and distributions by a direct or indirect wholly owned Company Subsidiary to the Company or another wholly owned Company Subsidiary, declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock or other equity interests, except for dividends by a wholly owned Subsidiary of Pivotal to Pivotal or any other wholly owned Subsidiary of Pivotalstock, (iiB) split, combine or reclassify any of its capital stock, or (C) except pursuant to agreements entered into with respect to the Company Stock Plans that are in effect as of the close of business on the date of this Agreement, purchase, redeem or otherwise acquire any shares of capital stock of the Company or other equity interests any of Pivotal or its the Company Subsidiaries or any optionsother securities thereof or any rights, warrants, warrants or rights options to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii) split, combine, reclassify or otherwise amend the terms of any of its capital stock or other equity 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 other equity interestssecurities;
(bii) issue, deliver, sell, grant, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) any shares of its capital stock or stock, any other equity interests voting securities or any securities convertible into, exchangeable for or exercisable for any such shares or other equity interests, or any rights, warrants or options to acquire, any such shares shares, voting securities or other equity interestsconvertible securities, or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive shares of capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof (other than the issuance of Class A Shares shares by one Company Subsidiary to the Company or any Company Subsidiary or the issuance of shares of Company Common Stock (A) upon the exercise of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights Company Stock Options under the Pivotal ESPPCompany Stock Plans or in connection with other awards under the Company Stock Plans, in each case, that are outstanding on as of the date of this Agreement and Made Available to VMware and otherwise in accordance with their terms present terms, (B) under the Company Stock Purchase Plan, (C) as matching contributions to the Employees' Voluntary Investment and Savings Plan of the Company, and (D) the issuance of Rights under the Company Rights Agreement in effect on such date)connection with the issuance of Company Common Stock permitted pursuant to this Agreement and, if the Company is not otherwise in breach of Section 4.2 of this Agreement, the purchase of stock upon exercise of the Rights pursuant to the Company Rights Agreement;
(ciii) (A) amend its Certificate of Incorporation or Bylaws (or other comparable organizational documents), (B) amend or otherwise changetake any other action with respect to the Company Rights Agreement, (C) merge or authorize consolidate with any person or propose (D) take or fail to amend take any actions that would constitute a violation of applicable Law, except for such violations as would not have or otherwise change, its certificate of incorporation or bylaws (or similar organizational documents)result in a material adverse effect on the Company;
(div) directly or indirectly acquire or agree to acquire (i) by merging or consolidating with, purchasing a substantial equity interest in or a substantial portion of the assets of, making an investment in or loan or capital contribution to or in any other manner, any corporation, partnership, association or other business organization or division thereof or (ii) any assets that are otherwise material to Pivotal and its Subsidiaries, except, in each case, for (1) capital expenditures which shall be subject to the limitations of clause (i) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes in the ordinary course of business consistent with Pivotal’s investment management policy, and except in the case of clause (ii), acquisitions of inventory, products or services in the ordinary course of business; Table of Contents
(e) directly or indirectly sell, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien or otherwise dispose in whole or in part of any of its material propertiesproperties or assets other than dispositions of tangible properties and assets in the ordinary course of business consistent with past practice or dispositions of such tangible properties and assets that, assets individually or rights (including any material Pivotal Intellectual Property Registrations) or any interest thereinin the aggregate, except, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal and its Subsidiaries, the Company Entities taken as a whole and (ii) Ordinary Course Licenses Outthe granting of Permitted Liens and Liens required under existing bank agreements;
(fv) adopt or enter into a commitments for capital expenditures involving more than $1,000,000 in the aggregate, except pursuant to the capital plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganizationthe Company previously provided to Parent;
(gvi) fail incur any indebtedness for money borrowed (whether evidenced by a note or other instrument, pursuant to maintaina financing lease, sale-leaseback transaction, or allow otherwise), other than intercompany indebtedness, indebtedness under the Company's existing credit agreement in a manner consistent with past practices, and other indebtedness of up to lapse, or abandon, including by failure to pay $3,500,000 in the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrationsaggregate;
(hvii) except as required by Law or as required by contracts or plans entered into or in existence on or prior to the date of this Agreement (iand previously disclosed to Parent) incurand subject to Sections 4.1(a)(i) and (ii), create(A) except for normal increases in salary and wages in the ordinary course of business consistent with the Company's fiscal year 2005 plan previously provided to Parent, assume grant any increase in the compensation or benefits payable or to become payable by the Company or any Company Subsidiary to any current or former director, officer, employee or consultant; (B) adopt, enter into, amend or otherwise increase, reprice or accelerate the payment or vesting of the amounts, benefits or rights payable or accrued or to become liable forpayable or accrued under any Company Benefit Plan or Foreign Plan; (C) enter into or amend any employment, severance, change in control agreement or any similar agreement or any collective bargaining agreement or, except as required in accordance with the Company's severance policy in effect on the date hereof and previously provided to Parent, grant any severance or termination pay to any officer, director, consultant or employee of the Company or any Company Subsidiaries; or (D) pay or award any pension, retirement, allowance or other non-equity incentive awards, or repayother employee or director benefit not required by any outstanding Company Benefit Plan or Foreign Plan;
(viii) change the accounting principles used by it unless required by GAAP (or, cancelif applicable with respect to foreign subsidiaries, forgive the relevant foreign generally accepted accounting principles);
(ix) acquire by merging or prepayconsolidating with, by purchasing any equity interest in or a portion of the assets of, or by any other manner, any Indebtednessbusiness or any corporation, partnership, association or other business organization or division thereof, or amendotherwise acquire any material amount of assets of any other person (other than the purchase of assets from suppliers or vendors in the ordinary course of business consistent with past practice);
(x) amend any Tax Returns except as required by Law or, modify except as would not have a material adverse effect on the Company and consistent with past practice, make or refinance rescind any Indebtedness express or deemed election or settle or compromise any claim or action relating to Taxes, or change any of its methods of accounting or of reporting income or deductions for Tax purposes unless required by GAAP (or, if applicable with respect to foreign subsidiaries, the relevant foreign generally accepted accounting principles) or by Law;
(xi) satisfy any claims or liabilities, other than (A) the satisfaction of such claims or liabilities, in the ordinary course of business consistent with past practice, in accordance with their terms, or (iiB) the satisfaction in the ordinary course of business or pursuant to their respective terms of claims or liabilities reflected or reserved against in the most recent financial statements (or the notes thereto) of the Company included in the Company SEC Documents (for amounts not in excess of such reserves) or incurred since the date of such financial statements in the ordinary course of business consistent with past practice;
(xii) make any loans, advances or capital contributions to, or investments in, any other Personperson, other than Pivotal except for loans, advances, capital contributions or investments between any direct or indirect wholly owned Company Subsidiary of Pivotal;
(i) incur and the Company or commit to incur any capital expenditure another wholly owned Company Subsidiary and except for employee or authorization or commitment with respect thereto that in the aggregate are in excess of $1,000,000;
(j) except as required by any judgment by a court of competent jurisdiction, (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge or satisfaction in the ordinary course of business, (B) as required by their terms as in effect on the date of this Agreement of claims, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof (director advances for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements in the ordinary course of business, (ii) cancel any material Indebtedness owed to Pivotal or any of its Subsidiaries, or (iii) waive, release, grant or transfer any right of material value;
(k) (i) materially modify, materially amend, terminate, cancel, waive any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (ii) enter into any Contract that if in effect on the date hereof would be a Material Contract, other than customer contracts entered into in the ordinary course of business;
(l) commence any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal or any of its Subsidiaries), or compromise, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements expenses in the ordinary course of business that involve only the payment of money damages not in excess of $500,000 individually or $2,000,000 in the aggregate, in any case without the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal or any of its Subsidiariesconsistent with past practice;
(mxiii) change its financial or Tax accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law;
(n) settle or compromise any material liability for Taxes or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis consistent with past practice practice, (A) modify, amend or terminate any material contract in a manner materially adverse to the Company or any Company Subsidiary, (B) waive, release, relinquish or assign any material contract (or any of the Company's or any Company Subsidiary's rights thereunder), right or claim, or (C) cancel or forgive any indebtedness owed to the Company or any Company Subsidiary (other than intercompany indebtedness); provided, however, that, subject to Section 4.2(a), the Company may not under any circumstance waive or release any of its rights under any confidentiality and/or standstill agreement to which it is a party;
(xiv) take any action that would materially and adversely affect its Tax liability; consent to any extension or waiver jeopardize qualification of the limitation period applicable to Merger as a reorganization within the meaning of Section 368(a) of the Code;
(xv) sell or otherwise dispose of any claim business, or assessment except as set forth in respect of a material amount of Taxes; grant this Section 4.1(a), any power of attorney with respect to material Taxes; capital stock or other equity interest;
(xvi) enter into any Tax Sharing Agreement new line of business; or
(xvii) authorize, or commit or agree to take, any closing agreement or other similar agreementof the foregoing actions; or change provided, however, that the limitations set forth in this Section 4.1(a) do not apply to any method transaction to which the only parties are the Company and wholly owned subsidiaries of accounting for Tax purposes;the Company.
Appears in 1 contract
Samples: Merger Agreement (Smucker J M Co)
Conduct of Business. Conduct of Business by the Company. During the period from the date of this Agreement to the Effective Time, except with the prior written consent of Parent, as consented to in writing in advance by VMware or as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) specifically contemplated by this Agreement, Pivotal as required by applicable Law or as set forth in Section 4.01(a) of the Company Letter, the Company shall, and shall cause each of its Subsidiaries to, carry on its business their respective businesses in the ordinary course, including its development and sales efforts as currently contemplated, course in all material respects and use commercially reasonable efforts to (i) preserve intact its business organizationcomply with all applicable Laws and, assetsto the extent consistent therewith, rights and properties, (ii) use commercially reasonable efforts to keep available the services of its current officerstheir present officers and other employees, employees and consultants and (iii) to preserve its goodwill and its their assets, their relationships with customers, material suppliers, licensors, licensees, distributors distributors, Franchisees and others having material business dealings with itthem and to maintain their material franchises, rights and Permits. In addition to and without Without in any way limiting the generality of the foregoing, during the period from the date of this Agreement to the Effective Time, except (x) with the prior written consent of Parent, as specifically contemplated by this Agreement, as required by applicable Law or as set forth in section 5.1 Section 4.01(a) of the Pivotal Disclosure LetterCompany Letter (with specific reference to the subsection of this Section 4.01 to which the information stated in such disclosure relates), (y) as specifically required by this Agreement or (z) as specifically required by applicable Law, Pivotal the Company shall not, and shall not permit any of its Subsidiaries, without VMware’s prior written consent (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), Subsidiaries to:
(ai) (iA) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock or other equity or voting interests, except for dividends by a direct or indirect wholly owned Subsidiary of Pivotal the Company to Pivotal or any other wholly owned Subsidiary of Pivotalits parent, (ii) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii) split, combine, combine or reclassify or otherwise amend the terms of any of its capital stock or other equity interests or voting interests, or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for for, shares of its capital stock or other equity interestsor voting interests or (C) purchase, redeem or otherwise acquire any shares of capital stock, other equity or voting interests or any other securities of the Company or any of its Subsidiaries or any options, restricted shares, warrants, calls or rights to acquire any such shares or other securities (including any Stock Options, except pursuant to the forfeiture conditions of such Stock Options or the cashless exercise or tax withholding provisions of such Stock Options, in each case only if and to the extent required by the terms of such awards as in effect on the date of this Agreement);
(bii) issue, deliver, sell, grant, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities LawsA) any shares of its capital stock or stock, other equity or voting interests or any securities convertible into, exchangeable for or exercisable for any such shares or Equity Equivalents (other equity interests, or any rights, warrants or options to acquire, any such shares or other equity interests, or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive than the issuance of shares of capital stock Company Common Stock upon the exercise of VMware on a deferred basis or other rights linked Stock Options outstanding as of the date of this Agreement and only if and to the value of Class A Shares or Class B Shares, including pursuant to Contracts extent required by the terms such awards as in effect on the date hereof (other than the issuance of Class A Shares upon the exercise of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPP, in each case, that are outstanding on the date of this Agreement and Made Available Agreement), or (B) securities convertible into, or exchangeable or exercisable for, or any options, warrants, calls or rights to VMware and otherwise in accordance with their terms as in effect on acquire, any such date)stock, interests or Equity Equivalents;
(ciii) amend or otherwise change, or authorize or propose to amend or otherwise change, its certificate of incorporation or bylaws (or similar organizational documents);
(div) directly or indirectly acquire or agree to acquire (iA) by merging or consolidating with, or by purchasing a substantial equity interest in all or a substantial portion of the assets of, making an investment in or loan by purchasing all or capital contribution to a substantial equity or in voting interest in, or by any other manner, any corporation, partnership, association business or other business organization person or division thereof or (iiB) any other assets that other than capital expenditures, which are otherwise material to Pivotal and its Subsidiaries, except, in each case, for (1) capital expenditures which shall be subject to the limitations of clause (ivii) below below, and (2) purchases of marketable securities by raw materials, supplies or on behalf of Pivotal or its Subsidiaries for cash management purposes in the ordinary course of business consistent with Pivotal’s investment management policy, and except in the case of clause (ii), acquisitions of inventory, products or services immaterial assets in the ordinary course of business; Table of Contents;
(ev) directly or indirectly sell, lease, license, sell and leaseback, abandon, allow to lapselease back, mortgage or otherwise encumber or subject to any Lien or otherwise dispose in whole or in part of any of its material properties, properties or assets or rights (including any material Pivotal Intellectual Property Registrationsshares of capital stock, equity or voting interests or other rights, instruments or securities), except sales of inventory or used equipment in the ordinary course of business and except for Permitted Liens;
(vi) (A) repurchase, prepay or incur any indebtedness, including by way of a guarantee or an issuance or sale of debt securities, or issue and sell options, warrants, calls or other rights to acquire any debt securities of the Company or any interest therein, except, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal and of its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Out;
(f) adopt enter into any “keep well” or other Contract to maintain any financial statement or similar condition of another person or enter into a plan any arrangement having the economic effect of complete or partial liquidationany of the foregoing, dissolution, restructuring, recapitalization or other reorganization;
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay than the required fees incurrence of borrowings under the Company’s revolving credit facility as in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness effect on the date of this Agreement in the ordinary course of business and not in excess of the amount outstanding as of the date of this Agreement plus $1,000,000 or (iiB) make any loans, advances or capital contributions to, or investments in, any other Personperson, other than Pivotal the Company or any direct or indirect wholly owned Subsidiary of Pivotalthe Company;
(ivii) incur or commit to incur any capital expenditure expenditures, or authorization any obligations or commitment with respect thereto liabilities in connection therewith, that individually are in excess of $125,000 or in the aggregate are in excess of $1,000,0002,000,000, other than capital expenditures incurred (A) in connection with the construction of new stores in the ordinary course of business or (B) under existing Contracts;
(jviii) except as required by any judgment by a court of competent jurisdiction, (iA) pay, discharge, settle or satisfy any claimsclaims (including any claims of stockholders and any stockholder litigation relating to this Agreement, the Merger or any other transaction contemplated by this Agreement or otherwise), liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge discharge, settlement or satisfaction in the ordinary course of business, (B) or as required by their terms as in effect on the date of this Agreement Agreement, of claims, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof Baseline Financials (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements in the ordinary course of businessbusiness or (1) for an aggregate amount of less than (x) $1,500,000 in the case of claims, liabilities and obligations identified in the Company Letter or the Filed SEC Documents and (y) $500,000 in the case of all other claims, liabilities and obligations, or (2) for amounts that are covered by insurance (other than a customary deductible), in each case, the payment, discharge, settlement or satisfaction of which does not include any obligation (other than the payment of money) to be performed by the Company or its Subsidiaries following the Closing Date, (iiB) cancel waive, relinquish, release, grant, transfer or assign any right of material value or (C) waive any material Indebtedness owed benefits of, or agree to Pivotal modify in any adverse respect, or fail to enforce, or consent to any matter with respect to which its consent is required under, any confidentiality or similar Contract to or by which the Company or any of its SubsidiariesSubsidiaries is a party or bound;
(ix) except for new lease activity set forth in Section 4.01(a)(ix) of the Company Letter, enter into any lease or sublease of real property (whether as a lessor, sublessor, lessee or sublessee), or modify or amend in any material respect, or exercise any right to renew, any lease or sublease of real property or acquire any interest in real property;
(iiix) waivemodify or amend in any material respect, or accelerate, terminate or cancel, any material Contract or waive in any material respect any right to enforce, or relinquish, release, grant transfer or transfer assign any right of material valuerights or claims thereunder;
(kxi) except as required to ensure that any Benefit Plan or Benefit Agreement as in effect on the date of this Agreement is not then out of compliance with applicable Law or as specifically required pursuant to this Agreement, (iA) materially modifyadopt, materially amendestablish, enter into, terminate, cancelamend or modify any Benefit Plan or Benefit Agreement, waive any material right under or extend any Material Contract (other than renewals B) except for standard salary increases in connection with anniversary dates of Contracts with customers of Pivotal Products employment in the ordinary course of business, increase in any manner the compensation or benefits of, or pay any bonus or award to, or grant any loan to, any Company Personnel, (C) pay or (ii) enter into provide to any Contract that if Company Personnel any compensation or benefit not provided for under a Benefit Plan or Benefit Agreement as in effect on the date hereof would be a Material Contractof this Agreement, other than customer contracts entered into the payment of base compensation in the ordinary course of business;
, (lD) commence grant or amend any Legal Proceeding award under any Benefit Plan (including the grant or amendment of Stock Options, restricted stock, stock appreciation rights, restricted stock units, performance units, stock purchase rights or other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal equity or equity-based compensation) or remove or modify existing restrictions in any of its Subsidiaries)Benefit Plan or Benefit Agreement or awards made thereunder, (E) grant or pay any severance, separation, change in control, termination, retention or similar compensation or benefits to, or compromiseincrease in any manner the severance, settle separation, change in control, termination, retention or agree similar compensation or benefits of, any Company Personnel, (F) enter into any trust, annuity or insurance Contract or similar agreement or take any other action to settle fund or in any Legal Proceedingother way secure the payment of compensation or benefits under any Benefit Plan or Benefit Agreement, other than Transaction Litigation which (G) take any action to accelerate, or that would reasonably be expected to result in the acceleration of, the time of payment or vesting of any rights, compensation, benefits or funding obligations under any Benefit Plan or Benefit Agreement or otherwise or (H) make any material determination under any Benefit Plan or Benefit Agreement that is subject to section 5.7), compromises, settlements or agreements in inconsistent with the ordinary course of business that involve only or past practice;
(xii) form any Subsidiary of the payment Company;
(xiii) adopt or enter into any collective bargaining agreement or other labor union Contract applicable to the employees of money damages not in excess of $500,000 individually or $2,000,000 in the aggregate, in any case without the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal Company or any of its Subsidiaries;
(mxiv) write-down any of its material assets or make any change its in any financial or Tax tax accounting methodsprinciple, principles method or practicespractice, except insofar other than as may have been required by a change in GAAP or applicable Law;
(nxv) settle enter into, extend or compromise renew any Contract or amendment thereof which, if executed prior to the date of this Agreement, would have been required to have been disclosed pursuant to Section 3.01(h)(i)(A), (B), (C), (F), (G), (H), (I), (J), (M) or Section 3.01(q)(i);
(xvi) amend, modify or waive any of the Company’s existing takeover defenses or take any action to render any state takeover or similar statute inapplicable to any transaction other than the Merger;
(xvii) make any material liability for Taxes amendment or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; makemodification to the policies, revoke or modify any material Tax election, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business procedures and on a basis consistent with past practice that would materially and adversely affect its Tax liability; consent to any extension or waiver guidelines of the limitation period applicable to any claim or assessment in respect of a material amount of Taxes; grant any power of attorney Company and its Subsidiaries with respect to material Taxes; Franchises and Franchisees;
(xviii) enter into any Tax Sharing Agreement new line of business not related to tea; or
(xix) authorize any of, or commit, resolve or agree to take any closing agreement or other similar agreement; or change any method of accounting for Tax purposes;of, the foregoing actions.
Appears in 1 contract
Conduct of Business. During the period from the date of this Agreement Each Company shall continue to the Effective Time, except as consented to in writing in advance by VMware or as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) by this Agreement, Pivotal shallconduct, and shall cause each of its Subsidiaries toto conduct, carry on its business Company Business in the ordinary course, including and usual course consistent with its development and sales efforts as currently contemplatedtheir past practices, and use commercially reasonable efforts to (i) preserve intact its business organization, assets, rights and properties, (ii) keep available the services of its current officers, employees and consultants and (iii) preserve its goodwill and its relationships with customers, suppliers, licensors, licensees, distributors and others having material business dealings with it. In addition to and without limiting the generality of the foregoing, during the period from the date of this Agreement to the Effective Time, except (x) as set forth in section 5.1 of the Pivotal Disclosure Letter, (y) as specifically required by this Agreement or (z) as specifically required by applicable Law, Pivotal such Company shall not, and shall not permit any of cause its SubsidiariesSubsidiaries to not, without VMwareParent’s prior written consent (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall consent may not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), to:):
(a) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person or issue or sell any debt securities or guarantee any debt securities of another Person other than in connection with the financing of payroll obligations under the Xxxxx Fargo Credit Facility, in the ordinary course of business consistent with past practices;
(b) (i) lend any money, other than reasonable and normal advances to employees for bona fide expenses that are incurred in the ordinary course of business consistent with its past practices, (ii) make any investments in or capital contributions to, any Person, (iii) forgive or discharge in whole or in part any outstanding loans or advances, or (iv) prepay any indebtedness;
(c) enter into any Company Material Contract, violate, terminate, amend or otherwise modify or waive any of the material terms of any Company Material Contract, or enter into any material transaction or take any other action, in each case not in the ordinary course of business consistent with its past practices;
(d) place or allow the creation of any Encumbrance (other than a Company Permitted Encumbrance) on any of its assets or properties;
(e) sell, lease, license, transfer or dispose of any assets material to the Company Business (except for sales or licenses of products in the ordinary course of business consistent with its past practices);
(f) except as required by Applicable Law, by any Contract in effect of the date hereof or contemplated by this Agreement, (i) pay any special bonus, increased salary, severance or special remuneration to any officer, director, employee or consultant, (ii) amend or enter into any employment or consulting Contract with any such person, or (iii) adopt or amend any employee or compensation benefit plan, including any stock purchase, stock issuance or stock option plan, or amend any compensation, benefit, entitlement, grant or award provided or made under any such plan (except in each case as required under ERISA or as necessary to maintain the qualified status of such plan under the Code);
(g) change any of its accounting methods;
(h) declare, set aside or pay any dividends on, cash or make any stock dividend or other distributions distribution (whether in cash, stock or property) in respect ofof its capital stock, or redeem, repurchase or otherwise acquire any of its capital stock or other equity interests, securities (except for dividends by a wholly owned Subsidiary the repurchase of Pivotal to Pivotal stock from its employees, directors, consultants or any other wholly owned Subsidiary of Pivotal, (ii) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement contractors in connection with the forfeiture termination of their services at the original purchase price of such awards, in accordance with their terms on the date of this Agreementstock), or pay or distribute any cash or property to any of its stockholders or securityholders or make any other cash payment to any of its stockholders or securityholders;
(iiii) splitterminate, combinewaive or release any material right or claim;
(j) issue, reclassify sell, create or otherwise amend the terms of authorize any shares of its capital stock of any class or series or any other of its securities, or issue, grant or create any warrants, obligations, subscriptions, options, convertible securities, or other equity interests or commitments to issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or other equity interestsany securities that are potentially exchangeable for, or convertible into, shares of its capital stock;
(bk) issuesubdivide, deliversplit, sell, grant, pledge combine or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under reverse split the Securities Act or other applicable securities Laws) any outstanding shares of its capital stock of any class or other equity interests series or enter into any securities convertible into, exchangeable for or exercisable for any such shares or other equity interests, or any rights, warrants or options to acquire, any such shares or other equity interests, or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive recapitalization affecting the number of outstanding shares of its capital stock of VMware on a deferred basis any class or series or affecting any other rights linked to the value of Class A Shares its securities;
(l) merge, consolidate or Class B Sharesreorganize with, including pursuant to Contracts as in effect on the date hereof acquire, or enter into any other business combination with any corporation, partnership, limited liability company or any other entity (other than the issuance of Class A Shares upon the exercise of Pivotal OptionsParent or Merger Sub), the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPP, in each case, that are outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with their terms as in effect on such date);
(c) amend or otherwise change, or authorize or propose to amend or otherwise change, its certificate of incorporation or bylaws (or similar organizational documents);
(d) directly or indirectly acquire or agree to acquire (i) by merging or consolidating with, purchasing a substantial equity interest in or a substantial portion of the assets ofof any such entity, making an investment in or loan enter into any negotiations, discussions or capital contribution to agreement for such purpose;
(m) amend the Company Charter Documents;
(n) license any of its technology or in any other manner, any corporation, partnership, association or other business organization or division thereof or Intellectual Property (ii) any assets that are otherwise material to Pivotal and except for licenses under its Subsidiaries, except, in each case, for (1) capital expenditures which shall be subject to the limitations of clause (i) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes standard customer agreement made in the ordinary course of business consistent with Pivotal’s investment management policyits past practices, and except in the case of clause (iiprovided that under no circumstances shall either Company or its Subsidiaries enter into any software escrow or similar agreement or arrangement), acquisitions of inventory, products or services in the ordinary course of business; Table of Contents
(e) directly or indirectly sell, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to acquire any Lien or otherwise dispose in whole or in part of any of its material properties, assets or rights (including any material Pivotal Intellectual Property Registrations) (or any interest therein, except, in each case, license thereto) from any third party (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior other than shrink wrap and other licenses of software generally available to the Effective Time pursuant to existing Contracts that are not material to Pivotal and its Subsidiaries, taken as public at a whole and per copy license fee of less than One Thousand Dollars (ii$1,000) Ordinary Course Licenses Outper copy);
(fo) adopt or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or materially change any insurance coverage (other reorganizationthan as contemplated in this Agreement);
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(hp) (i) incuragree to any audit assessment by any taxing authority, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (ii) make file any loansmaterial Return or amendment to any Return unless copies of such Return or amendment have first been delivered to Parent for its review at a reasonable time prior to filing, advances or capital contributions to, or investments in, any other Person, other than Pivotal or any direct or indirect wholly owned Subsidiary of Pivotal;
(i) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto that in the aggregate are in excess of $1,000,000;
(jiii) except as required by Applicable Law, make or change any judgment by a court election in respect of competent jurisdiction, (i) pay, discharge, settle Taxes or satisfy adopt or change any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge or satisfaction accounting method in the ordinary course respect of business, (B) as required by their terms as in effect on the date of this Agreement of claims, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements in the ordinary course of business, (ii) cancel any material Indebtedness owed to Pivotal or any of its SubsidiariesTaxes, or (iii) waive, release, grant or transfer any right of material value;
(k) (i) materially modify, materially amend, terminate, cancel, waive any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (iiiv) enter into any Contract that if closing agreement, settle any claim or assessment in effect on the date hereof would be a Material Contract, other than customer contracts entered into in the ordinary course respect of business;
(l) commence any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal or any of its Subsidiaries)Taxes, or compromise, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements in the ordinary course of business that involve only the payment of money damages not in excess of $500,000 individually or $2,000,000 in the aggregate, in any case without the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal or any of its Subsidiaries;
(m) change its financial or Tax accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law;
(n) settle or compromise any material liability for Taxes or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liability; consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of a material amount Taxes, that would, in the case of Taxes; grant any power of attorney with respect (i) through (iv), reasonably be expected to material Taxes; enter into any Tax Sharing Agreement have an adverse effect on Parent or any closing agreement of its Affiliates in a tax period ending after the Closing Date;
(q) except as is necessary to comply with its obligations pursuant to Section 5.7 below, modify or change the exercise or conversion rights or exercise or purchase prices of any of its capital stock, any of its stock options, warrants or other similar agreementsecurities, or accelerate or otherwise modify (i) the right to exercise any option, warrant or other right to purchase any of its capital stock or other securities or (ii) the vesting or release of any shares of its capital stock or other securities from any repurchase options or rights of refusal held by it or any other party or any other restrictions;
(r) (i) initiate any litigation, action, suit, proceeding, claim or arbitration or (ii) settle or agree to settle any litigation, action, suit, proceeding, claim or arbitration;
(s) (i) pay, discharge or satisfy, in an amount in excess of Ten Thousand Dollars ($10,000) in any one case or Thirty Thousand ($30,000) in the aggregate, any Liability arising otherwise than in the ordinary course of business, other than (1) the payment, discharge or satisfaction of Liabilities reflected or reserved against in the Company Balance Sheet and (2) the payment, discharge or satisfaction of Merger Expenses, or (ii) make any capital expenditures, capital additions or capital improvements;
(t) materially change the manner in which it extends warranties, discounts or credits to customers; or
(i) agree to do any of the things described in the preceding clauses (a)-(u), (ii) take or change agree to take any method action which would reasonably be expected to make any of accounting for Tax purposes;the Companies’ representations or warranties contained in this Agreement materially untrue or incorrect, or (iii) take or agree to take any action which would reasonably be expected to prevent the Companies from performing or cause the Companies not to perform one or more covenants required hereunder to be performed by the Companies; For purposes of this Section 5.3, “Company Material Contract” includes any Contract arising subsequent to the date of this Agreement that would have been required to be listed on the Companies Disclosure Schedule pursuant to Section 3.11 had such Contract been in effect on the date of this Agreement.
Appears in 1 contract
Conduct of Business. During the period from the date of this Agreement to the Effective Time, except as consented to in writing in advance by VMware Parent or as otherwise expressly specifically required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) by this Agreement, Pivotal the Company shall, and shall cause each of its Subsidiaries to, carry on its business in to not incur liabilities outside of the ordinary course, including its development and sales efforts as currently contemplated, course of business and use commercially reasonable best efforts to (i) preserve intact its business organization, assets, rights Intellectual Property and properties, (ii) keep available the services of its current officers, employees other material assets and consultants and (iii) preserve its goodwill and its relationships with customers, suppliers, licensors, licensees, distributors and others having material business dealings with itbusiness. In addition to and without limiting the generality of the foregoing, during the period from the date of this Agreement to the Effective Time, except (x1) as set forth in section 5.1 Section 6.1 of the Pivotal Company Disclosure Letter, (y2) as consented to in writing in advance by Parent (which consent shall not be unreasonably withheld, conditioned or delayed), (3) as required by applicable Law or (4) as otherwise specifically required by this Agreement or (z) as specifically required by applicable LawAgreement, Pivotal the Company shall not, and shall not permit any of its Subsidiaries, without VMware’s prior written consent (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), Subsidiaries to:
(a) (i) establish a record date for, declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, or enter into any voting agreement with respect to the voting of, any of its capital stock or other equity interestsinterests of the Company or its Subsidiaries, except for dividends by a wholly owned Subsidiary of Pivotal the Company to Pivotal or any other wholly owned Subsidiary of Pivotalits parent, (ii) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal the Company or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, other than (A) in connection with the withholding of Class A Shares to satisfy tax Tax obligations with respect to awards granted pursuant to the Pivotal exercise of Company Stock Plans and outstanding on Options, vesting of Company RSUs or the date payment of this Agreement or as permitted by this Agreement, in accordance with their terms on the date exercise price of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this AgreementCompany Stock Options, or (iii) split, combine, reclassify or otherwise amend the terms of any of its capital stock or other equity 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 other equity interests;
(b) issue, deliver, sell, grant, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) any shares of its capital stock or other equity interests or any securities convertible into, exchangeable for or exercisable for any such shares or other equity interests, or any rights, warrants or options to acquire, any such shares or other equity interests, or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive shares of capital stock of VMware the Company on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof (other than the issuance of Class A Shares upon the exercise of Pivotal Options, the Company Stock Options and settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPPCompany RSUs, in each case, that are outstanding on the date of this Agreement and Made Available to VMware and otherwise Measurement Date in accordance with their terms as in effect on such date);
(c) amend or otherwise change, or authorize or propose to amend or otherwise change, change its certificate of incorporation or bylaws by-laws (or similar organizational documents);
(d) directly or indirectly acquire or agree to acquire (i) by merging or consolidating with, purchasing a substantial equity interest in or a substantial portion of the assets of, making an investment in or loan or capital contribution to or in any other manner, any corporation, partnership, association or other business organization or division thereof or (ii) any assets that are otherwise material to Pivotal the Company and its Subsidiaries, except, in each case, for (1) capital expenditures which shall be subject to the limitations of clause (i) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes other than inventory acquired in the ordinary course of business consistent with Pivotal’s investment management policy, and except in the case of clause (ii), acquisitions of inventory, products or services in the ordinary course of business; Table of Contentspast practice;
(e) directly or indirectly sell, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien or otherwise dispose in whole or in part of any of its material properties, assets or rights (including any material Pivotal Intellectual Property Registrations) or any interest therein, except, except sales of inventory in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Outordinary course of business consistent with past practice;
(f) adopt or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive repay or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, other than Pivotal the Company or any direct or indirect wholly owned Subsidiary of Pivotalthe Company and routine travel and business expense advances made to directors, employees and consultants of the Company, in each case in the ordinary course of business;
(ih) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto thereto;
(i) enter into, modify, amend, terminate, cancel or extend any (i) Material Contract or (ii) Contract that is not a Material Contract that imposes liability on the Company not taken into account in the aggregate are estimated calculation of the Company Net Cash as of the date hereof in excess of $1,000,00025,000;
(j) except as required by commence any judgment by a court of competent jurisdiction, Action (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) an Action as a result of an Action commenced against the payment, discharge or satisfaction in the ordinary course of business, (B) as required by their terms as in effect on the date of this Agreement of claims, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements in the ordinary course of business, (ii) cancel any material Indebtedness owed to Pivotal Company or any of its Subsidiaries, Subsidiaries or (iii) waive, release, grant or transfer any right an Action in respect of material value;
(k) (i) materially modify, materially amend, terminate, cancel, waive any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (ii) enter into any Contract that if in effect on the date hereof would be a Material Contract, other than customer contracts entered into in the ordinary course of business;
(l) commence any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal or any of its Subsidiariestransactions contemplated hereby), or compromise, settle or agree to settle any Legal Proceeding, Action other than Transaction Litigation pursuant to a settlement: (A) that results solely in monetary obligation involving payment by the Company of the amount specifically reserved in accordance with GAAP with respect to such Action on the Company Balance Sheet and which amount is subject to section 5.7), compromises, settlements or agreements reserved and included in the ordinary course of business Company Net Cash Calculation; (B) that involve results solely in monetary obligation involving only the payment of money damages monies by the Company of not in excess of more than $500,000 individually or $2,000,000 25,000 in the aggregate, ; or (C) pursuant to or otherwise in any case without the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal or any of its Subsidiariesaccordance with Section 6.5;
(mk) change its financial or Tax tax accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law, or revalue any of its material assets outside of the ordinary course of business;
(nl) except as is otherwise required by applicable Law or GAAP, (i) settle or compromise any material liability for Taxes or surrender any material claim for a refund of Taxes; (ii) file any amended material Tax Return or claim for income or other material Tax refund; (iii) make, revoke or modify any material Tax election, or change the entity classification of any Subsidiary for U.S. federal tax purposes; (iv) file any Tax Return other than in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liabilitypractice; (v) consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of a material amount of Taxes; (vi) grant any power of attorney with respect to material Taxes; (vii) enter into any Tax Sharing Agreement or any closing allocation agreement, Tax sharing agreement, Tax indemnity agreement or other similar agreementagreement (other than any Ordinary Agreement); (viii) commence, settle or compromise any claims, audits or proceeding relating to a material amount of Taxes; (ix) adopt or change any method of accounting for Tax purposes; or (x) fail to pay material Taxes when due, in each case of clauses (i) through (ix), except in the ordinary course of business;
(m) change its fiscal year;
(n) other than as required under this Agreement or the terms of any Employee Plan or other program, Contract or arrangement in effect on the date hereof or as required by applicable Law (i) grant any current or former Company Associate any increase in compensation, bonus or other benefits, or any such grant of any type of compensation or benefits to any current or former Company Associate not previously receiving or entitled to receive such type of compensation or benefit, or pay any bonus of any kind or amount to any current or former Company Associate, (ii) grant or pay to any current or former Company Associate any equity or equity-based award, severance, change in control or termination pay, or modifications thereto or increases therein, (iii) pay any benefit or grant or amend any award (including in respect of stock options, stock appreciation rights, performance units, restricted stock or other stock-based or stock-related awards or the removal or modification of any restrictions in any Company Stock Plan or awards made thereunder) except as required to comply with any applicable Law or pursuant to any Employee Plan (including any award agreement thereunder) in effect as of the date hereof, (iv) adopt or enter into any collective bargaining agreement or other labor union contract, (v) take any action to accelerate the vesting, funding or payment of any compensation or benefit under any Employee Plan, (vi) establish, adopt or materially amend, modify or terminate any existing Employee Plan or (vii) hire any employees;
(o) renew or enter into any non-compete, exclusivity, non-solicitation or similar agreement that would restrict or limit the operations of the Company or any of its Subsidiaries;
(p) enter into any new line of business outside of its existing business;
(q) enter into any new lease or amend the terms of any existing lease of real property;
(r) cancel, terminate or modify in any material respect, or take any action that could permit cancellation, termination or material modification of, any insurance policy material to the Company or any Subsidiary;
(s) adopt or implement any stockholder rights plan (or similar plan commonly referred to as a “poison pill”);
(t) enter into, adopt or amend any collective bargaining agreement or other agreement with any labor organization;
(u) acquire any interest in real property;
(A) enter into any material transaction or Contract with any Affiliate, any holder of five percent (5%) or more of the outstanding Shares, or any director or executive officer of the Company or any of its Subsidiaries or (B) enter into any material transaction or Contract with any other person that would be required to be reported by the Company pursuant to Item 404 of Regulation S-K under the Exchange Act;
(w) acquire, purchase, sell, lease, license, sublicense, pledge, transfer, assign, subject to any Encumbrance, abandon, permit to lapse, fail to take any action necessary to maintain, enforce or protect or otherwise dispose of, or otherwise grant any rights under, any Company Registered IP, material assets or material properties, except (A) non-exclusive licenses of Intellectual Property granted by the Company or any Subsidiary in the ordinary course of business where the grant of such license is solely to a commercial service provider to perform services for the Company or any Subsidiary consistent with past practice and is incidental to, and not material to, any performance under the agreement with such commercial service provider that includes such license, (B) sales of inventory or used equipment in the ordinary course of business (for clarity, this excludes any Intellectual Property); or
(x) authorize any of, or commit, resolve or agree to take any of, the foregoing actions.
Appears in 1 contract
Conduct of Business. During (a) Except as required by applicable Law, as required by this Agreement or as set forth on Section 5.01(a) of the Company Disclosure Schedule, during the period from the date of this Agreement until the Final Effective Time (or such earlier date on which this Agreement may be terminated pursuant to Section 7.01), unless Parent otherwise consents in writing, the Effective Time, except as consented to in writing in advance by VMware or as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) by this Agreement, Pivotal Company shall, and shall cause each of its Subsidiaries to, carry on its business in all material respects in the ordinary course. To the extent consistent with the foregoing, including its development and sales efforts as currently contemplatedthe Company shall, and shall cause its Subsidiaries to, use its and their commercially reasonable efforts to (i) preserve intact its business organization, assets, rights and properties, (ii) keep available the services each of its current officersSubsidiaries’ business organizations substantially intact, employees and consultants and (iii) preserve its goodwill and its relationships existing relations with key customers, suppliersreinsurance providers, licensorsGovernmental Authorities and other Persons with whom the Company or its Subsidiaries have significant business relationships, licenseesin each case, distributors and others having material business dealings consistent with itpast practice. In addition to and without Without limiting the generality of the foregoing, and except as required by applicable Law, as required or as set forth on Section 5.01(a) of the Company Disclosure Schedule, during such period, unless Parent otherwise consents in writing (such consent not to be unreasonably withheld, delayed or conditioned), the Company shall not, and shall not permit any of its Subsidiaries to:
(i) (A) issue, sell or grant any shares of its capital stock or other equity or voting interests, or any securities or rights convertible into, exchangeable or exercisable for, or evidencing the right to subscribe for any shares of its capital stock or other equity or voting interests, or any options, rights, warrants or other commitments or agreements to acquire from the Company, or that obligate the Company to issue, any capital stock of, or other equity or voting interests in, or any securities convertible into or exchangeable for shares of capital stock of, or other equity or voting interests in, the Company; provided that the Company may issue Company Shares or other securities (as required pursuant to the vesting or settlement of Share Units (1) outstanding on the date of this Agreement in accordance with the terms of the applicable award or Company Right in effect on the date of this Agreement or (2) granted after the date of this Agreement in accordance with this Agreement; (B) redeem, purchase or otherwise acquire any of its outstanding shares of capital stock or other equity or voting interests, or any rights, warrants or options to acquire any shares of its capital stock or other equity or voting interests, except (x) pursuant to the Company Plans or the Share Units or (y) in connection with the satisfaction of Tax withholding obligations with respect to Share Units in the case of clauses (x) and (y), in accordance with their terms in effect on the date of this Agreement, (C) in the case of the Company, establish a record date, declare, set aside for payment or pay any dividend on, or make any other distribution in respect of, any shares of its capital stock or other equity or voting interests, in each case, other than regular quarterly cash distributions, in accordance with the declaration and payment schedule set forth in Section 5.01(a)(i)(C) of the Company Disclosure Schedule and, in each case, not to exceed $0.04 per Company Share or (D) split, combine, subdivide or reclassify any shares of its capital stock or other equity or voting interests;
(ii) (A) incur any indebtedness for borrowed money, issue or sell any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, incur any obligations with respect to capital leases, or enter into any “keep well” or other agreement to maintain any financial statement condition of another Person (collectively, “Indebtedness”), modify any of the material terms with respect to any Indebtedness, or guaranty the Indebtedness of any other Person, except for (w) intercompany guarantees or intercompany “keep well” or other agreements to maintain any financial statement condition of the Company or any of its Subsidiaries and (x) letters of credit issued in the ordinary course of business, (B) enter into any swap or hedging transaction or other derivative agreements other than consistent with the Investment Guidelines or the Company’s Hedging Policy, dated as of March 1, 2012 (without taking into account any amendments thereto or waivers thereunder), or (C) make any loans, capital contributions or advances to any Person other than (w) to the Company or any Subsidiary of the Company, (x) pursuant to Section 5.01(a)(vi) or (y) consistent with the Investment Guidelines;
(iii) adopt or implement any shareholder rights plan or similar arrangement;
(iv) sell or lease to any Person, in a single transaction or series of related transactions, any of its properties or assets whose value or purchase price exceeds $250,000 individually or $1 million in the aggregate, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer used or useful in the conduct of the business of the Company or any of its Subsidiaries, (B) transfers among the Company and its Subsidiaries, or (C) pursuant to Section 5.01(a)(xvi);
(v) make or authorize capital expenditures outside the ordinary course of business;
(vi) except as permitted under Section 5.01(a)(v) or Section 5.01(a)(xvi), make any acquisition (including by merger) of the capital stock or, except in the ordinary course of business, a material portion of the assets of any other Person, in each case for consideration in excess of $250,000 individually or $1 million in the aggregate;
(vii) except as required pursuant to the terms of any Company Plan as in effect on the date of this Agreement, (1) grant to any director, executive officer or other employee any increase in salary or bonus opportunity other than increases to non-executive employees in the ordinary course of business, (2) grant to any director, executive officer or other employee any increase in severance, retention or termination pay, (3) establish, adopt, enter into or amend in any respect any Company Plan or collective bargaining agreement other than non-material amendments in the ordinary course of business consistent with past practice or (4) enter into any employment, consulting, severance or termination agreement with any director, executive officer or other employee of the Company or any of its Subsidiaries; provided, however, that the foregoing shall not restrict the Company or any of its Subsidiaries from entering into or making available to employees hired in the ordinary course of business after the date hereof to replace terminated employees or to fill positions open as of the date hereof (provided that, with respect to new hires to replace employees terminated after the date of this Agreement, the Company provides Parent with reasonable notice that it intends to replace such terminated employee or fill such open position and provides Parent with a reasonable opportunity to consult with the Company with respect thereto), plans, agreements, benefits and compensation arrangements (excluding equity incentive grants) that have a value (excluding equity incentive grants) that is consistent with the past practice of making compensation and benefits available to such hired employees in similar positions;
(viii) make any changes in any material respect in the Company’s or any of its Subsidiaries’ financial accounting or actuarial methods, principles or practices, except insofar as may be required (A) by GAAP (or any interpretation thereof), including pursuant to standards, guidelines and interpretations of the Financial Accounting Standards Board or any similar organization, (B) by Applicable SAP or (C) by Law, including Regulation S-X under the Securities Act;
(ix) (A) amend (whether by merger, amalgamation, consolidation or otherwise) the Company Charter or (B) amend (whether by merger, amalgamation, consolidation or otherwise) in any material respect the comparable organizational documents of any Subsidiary;
(x) adopt a plan or agreement of complete or partial liquidation or dissolution, merger, amalgamation, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries;
(xi) grant, or allow to be imposed, any Lien (other than Permitted Liens) on any of its material assets;
(xii) settle or compromise any pending or threatened Action against the Company or any of its Subsidiaries (A) for a cash settlement amount of more than $250,000 individually or $1 million in the aggregate, or (B) which settlement or compromise imposes or concedes any fault on the part of the Company or any of its Subsidiaries or imposes any material restrictions on any of their future activities;
(xiii) amend or modify in any material respect or terminate (excluding terminations upon expiration of the term thereof in accordance with its terms) any Material Contract or waive, release or assign any material rights, claims or benefits of it or its Subsidiaries under any Material Contract, or enter into any Contract or agreement that would have been a Material Contract had it been entered into prior to the date of this Agreement;
(xiv) reduce any reserves, provisions for losses or other liability amounts in respect of the Company Reinsurance Contracts, except (A) to the extent required after the date hereof by any concurrent change in applicable Law, Applicable SAP or GAAP, as applicable or (B) as a result of payments to other parties in accordance with the terms of the Company Reinsurance Contracts;
(xv) except in the ordinary course of business or as related to the First-Step Merger, make any material Tax election or settle or compromise any material Tax liability or material Tax refund;
(xvi) acquire or dispose of any Investment Assets in any manner inconsistent with the Investment Guidelines;
(xvii) amend, modify or otherwise change the Investment Guidelines in any material respect;
(xviii) abandon, dispose of, or permit to lapse any right to material Intellectual Property owned by the Company or its Subsidiaries, or disclose any material Trade Secret or other material confidential information of the Company or any of its Subsidiaries in a manner that would result in the loss of confidentiality thereof;
(xix) (A) take any action or cause any action to be taken (including any action otherwise permitted by this Section 5.01(a)) that would prevent the First-Step Merger or the Second-Step Merger from constituting a tax-free reorganization under Section 368(a) and related provisions of the Code or (B) fail to take any commercially reasonable action or fail to cause any commercially reasonable action to be taken (including any failure otherwise permitted by this Section 5.01(a)) that is necessary to cause the First-Step Merger or the Second-Step Merger to constitute a tax-free reorganization under Section 368(a) and related provisions of the Code;
(xx) except as required by Section 2.07, amend the Warrant; or
(xxi) authorize any of, or commit or agree, in writing or otherwise, to take any of, the foregoing actions.
(b) Except as required by applicable Law, as contemplated, required or permitted by this Agreement or as described in Section 5.01(b) of the Parent Disclosure Schedule, during the period from the date of this Agreement until the Final Effective Time (or such earlier date on which this Agreement may be terminated pursuant to Section 7.01), unless the Effective TimeCompany otherwise consents in writing (such consent not to be unreasonably withheld, except (x) as set forth delayed or conditioned), Parent shall, and shall cause each of its Subsidiaries to, carry on its business in section 5.1 all material respects in the ordinary course. Without limiting the generality of the Pivotal Disclosure Letterforegoing, (y) and except as specifically required by this Agreement or (z) as specifically required by applicable Law, Pivotal as contemplated, required or permitted by this Agreement or as described in Section 5.01(b) of the Parent Disclosure Schedule, during such period, unless the Company otherwise consents in writing (such consent not to be unreasonably withheld, delayed or conditioned), Parent shall not, and shall not permit any of its Subsidiaries, without VMware’s prior written consent (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), Subsidiaries to:
(ai) (iA) declareredeem, set aside purchase or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, otherwise acquire any of its capital stock or other equity interests, except for dividends by a wholly owned Subsidiary of Pivotal to Pivotal or any other wholly owned Subsidiary of Pivotal, (ii) purchase, redeem or otherwise acquire outstanding shares of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii) split, combine, reclassify or otherwise amend the terms of any of its capital stock or other equity 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 other equity interests;
(b) issue, deliver, sell, grant, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) any shares of its capital stock or other equity interests or any securities convertible into, exchangeable for or exercisable for any such shares or other equity voting interests, or any rights, warrants or options to acquire, acquire any such shares of its capital stock or other equity or voting interests, except (x) pursuant to the Parent Stock Plans, Parent Director Stock Plan, Parent Equity Awards or other equity awards, (y) in connection with the satisfaction of Tax withholding obligations with respect to Parent Equity Awards or other equity awards or (z) pursuant to the Parent’s share repurchase program, (B) in the case of Parent, establish a record date for, declare, set aside for payment or pay any stock appreciation rightsdividend on, “phantom” stock rightsor make any other distribution in respect of, performance units, rights to receive any shares of its capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares equity or Class B Shares, including pursuant to Contracts as in effect on the date hereof (other than the issuance of Class A Shares upon the exercise of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPPvoting interests, in each case, that are outstanding on the date other than regular quarterly cash dividends not to exceed $0.25 per Parent Share or (C) split, combine, subdivide or reclassify any shares of this Agreement and Made Available to VMware and otherwise in accordance with their terms as in effect on such date)its capital stock or other equity or voting interests;
(c) amend or otherwise change, or authorize or propose to amend or otherwise change, its certificate of incorporation or bylaws (or similar organizational documents);
(d) directly or indirectly acquire or agree to acquire (i) by merging or consolidating with, purchasing a substantial equity interest in or a substantial portion of the assets of, making an investment in or loan or capital contribution to or in any other manner, any corporation, partnership, association or other business organization or division thereof or (ii) any assets that are otherwise material to Pivotal and its Subsidiaries, except, in each case, for (1) capital expenditures which shall be subject to the limitations of clause (i) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes in the ordinary course of business consistent with Pivotal’s investment management policy, and except in the case of clause (ii), acquisitions of inventory, products or services in the ordinary course of business; Table of Contents
(e) directly or indirectly sell, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien or otherwise dispose in whole or in part of any of its material properties, assets or rights (including any material Pivotal Intellectual Property Registrations) or any interest therein, except, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Out;
(f) adopt or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, other than Pivotal or any direct or indirect wholly owned Subsidiary of Pivotal;
(i) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto that changes in the aggregate are in excess of $1,000,000;
(j) except as required by any judgment by a court of competent jurisdiction, (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge or satisfaction in the ordinary course of business, (B) as required by their terms as in effect on the date of this Agreement of claims, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements in the ordinary course of business, (ii) cancel any material Indebtedness owed to Pivotal respect in Parent’s or any of its Subsidiaries, ’ financial accounting or (iii) waive, release, grant or transfer any right of material value;
(k) (i) materially modify, materially amend, terminate, cancel, waive any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (ii) enter into any Contract that if in effect on the date hereof would be a Material Contract, other than customer contracts entered into in the ordinary course of business;
(l) commence any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal or any of its Subsidiaries), or compromise, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements in the ordinary course of business that involve only the payment of money damages not in excess of $500,000 individually or $2,000,000 in the aggregate, in any case without the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal or any of its Subsidiaries;
(m) change its financial or Tax accounting actuarial methods, principles or practices, except insofar as may have been be required (A) by a change in GAAP (or applicable any interpretation thereof), including pursuant to standards, guidelines and interpretations of the Financial Accounting Standards Board or any similar organization, (B) by Applicable Parent SAP or (C) by Law, including Regulation S-X under the Securities Act;
(niii) settle (A) amend (whether by merger, amalgamation, consolidation or compromise otherwise) the Parent Charter or Parent Bye-laws or (B) amend (whether by merger, consolidation or otherwise) in any material liability for Taxes or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change respect the entity classification comparable organizational documents of any Subsidiary for U.S. federal tax purposes; file in a manner that would reasonably be expected to prevent or to impede, interfere with, hinder or delay in any Tax Return material respect the consummation of the Transactions;
(iv) adopt a plan or agreement of complete or partial liquidation or dissolution of Parent or any of its Subsidiaries (other than dormant Subsidiaries of Parent);
(v) (A) take any action or cause any action to be taken (including any action otherwise permitted by this Section 5.01(b)) that would prevent the First-Step Merger or the Second-Step Merger from constituting a tax-free reorganization under Section 368(a) and related provisions of the Code or (B) fail to take any commercially reasonable action or fail to cause any commercially reasonable action to be taken (including any failure otherwise permitted by this Section 5.01(b)) that is necessary to cause the First-Step Merger or the Second-Step Merger to constitute a tax-free reorganization under Section 368(a) and related provisions of the Code; or
(vi) authorize any of, or commit or agree, in writing or otherwise, to take any of, the ordinary course foregoing actions.
(c) Nothing contained in this Agreement is intended to give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Final Effective Time, and nothing contained in this Agreement is intended to give the Company, directly or indirectly, the right to control or direct Parent’s or its Subsidiaries’ operations. Prior to the Final Effective Time, each of business Parent and on a basis the Company shall exercise, consistent with past practice that would materially the terms and adversely affect conditions of this Agreement, complete control and supervision over its Tax liability; consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of a material amount of Taxes; grant any power of attorney with respect to material Taxes; enter into any Tax Sharing Agreement or any closing agreement or other similar agreement; or change any method of accounting for Tax purposes;and its Subsidiaries’ respective operations.
Appears in 1 contract
Samples: Merger Agreement (Flagstone Reinsurance Holdings, S.A.)
Conduct of Business. During (a) Except as (I) permitted by this Agreement, (II) required by applicable Law or (III) set forth in Section 5.1 of the Company Disclosure Schedule, during the period from the date of this Agreement to until the Effective TimePurchase Date, except as consented to unless Parent otherwise consents in writing in advance by VMware or as otherwise expressly required or prohibited (including by x) the restrictions set forth in subclauses (a) through (r) below) by this Agreement, Pivotal Company shall, and shall cause each of its Subsidiaries to, carry on conduct its business in all material respects in the ordinary course, including its development and sales efforts as currently contemplated, and use commercially reasonable efforts to (i) preserve intact its business organization, assets, rights and properties, (ii) keep available the services of its current officers, employees and consultants and (iii) preserve its goodwill and its relationships consistent with customers, suppliers, licensors, licensees, distributors and others having material business dealings with it. In addition to and without limiting the generality of the foregoing, during the period from the date of this Agreement to the Effective Time, except (x) as set forth in section 5.1 of the Pivotal Disclosure Letterpast practice, (y) as specifically required by this Agreement or the Company shall use its best efforts to preserve the current relationships of the Company and its Subsidiaries with their respective customers, vendors, suppliers and other persons with which they have business relationships, and (z) as specifically required by applicable Law, Pivotal the Company shall not, and shall not permit any of its Subsidiaries, without VMware’s prior written consent (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), Subsidiaries to:
(ai) (iA) issue, sell or grant any shares of its capital stock, voting securities or equity interests, or any securities or rights convertible into, exchangeable or exercisable for, or evidencing the right to subscribe for any shares of its capital stock, voting securities or equity interests, or any warrants, options or rights to purchase or acquire any shares of its capital stock, voting securities or equity interests or any securities or rights convertible into, exchangeable or exercisable for, or evidencing the right to subscribe for, any shares of its capital stock, voting securities or equity interests, provided that (x) the Company may issue shares of Company Common Stock upon the exercise of options that are outstanding on the date hereof and (y) capital stock, voting securities or equity interests of the Company’s Subsidiaries may be issued to the Company or a direct or indirect wholly owned Subsidiary of the Company; (B) redeem, purchase or otherwise acquire any outstanding shares of capital stock, voting securities or equity interests of the Company, or any warrants, options or rights to acquire any shares of capital stock, voting securities or equity interests of the Company, (C) declare, set aside for payment or pay any dividends dividend on, or make any other distributions (whether in cash, stock or property) distribution in respect of, any of its capital stock or other equity interests, except for dividends by a wholly owned Subsidiary of Pivotal to Pivotal or any other wholly owned Subsidiary of Pivotal, (ii) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, other than the Company; (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iiiD) split, combine, subdivide or reclassify or otherwise amend the terms of any of its capital stock or other equity 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 other equity interests;
(b) issue, deliver, sell, grant, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) any shares of its capital stock or other equity interests or any securities convertible into, exchangeable for or exercisable for any such shares or other equity interests, or any rights, warrants or options to acquire, any such shares or other equity interests, or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive shares of capital stock of VMware on a deferred basis the Company; or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof (other than the issuance of Class A Shares upon the exercise of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPP, in each case, that are outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with their terms as in effect on such date);
(cE) amend or otherwise change, or authorize or propose to amend or otherwise change, its certificate of incorporation or bylaws (or similar organizational documents);
(d) directly or indirectly acquire or agree to acquire (i) by merging or consolidating with, purchasing a substantial equity interest in or a substantial portion of the assets of, making an investment in or loan or capital contribution to or in any other manner, any corporation, partnership, association material respect or other business organization or division thereof or (ii) any assets that are otherwise material to Pivotal and its Subsidiaries, except, in each case, for (1) capital expenditures which shall be subject to the limitations of clause (i) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes in the ordinary course of business consistent with Pivotal’s investment management policy, and except in the case of clause (ii), acquisitions of inventory, products or services in the ordinary course of business; Table of Contents
(e) directly or indirectly sell, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien or otherwise dispose in whole or in part of waive any of its material propertiesrights under, assets or rights (including accelerate the vesting under, any material Pivotal Intellectual Property Registrations) provision of the Stock Plans or any interest thereinagreement evidencing any outstanding option or other right to acquire capital stock of the Company or any restricted stock purchase agreement or any related contract;
(ii) incur any Company Indebtedness;
(iii) sell, except, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, lease or encumbrances required to be effected prior dispose of any properties or assets that are material to the Effective Time pursuant to existing Contracts that are not material to Pivotal Company and its Subsidiaries, taken as a whole and whole, to any Person (ii) Ordinary Course Licenses Out;
(f) adopt or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, other than Pivotal to the Company or any a direct or indirect wholly owned Subsidiary of Pivotal;
(i) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto that in the aggregate are in excess of $1,000,000;
(j) except as required by any judgment by a court of competent jurisdiction, (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwiseCompany), other than except (A) the payment, discharge or satisfaction sales of inventory in the ordinary course of business, consistent with past practice, and (B) as required by their terms as in effect on the date dispositions of this Agreement of claims, liabilities obsolete or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements worthless assets in the ordinary course of business, (ii) cancel any material Indebtedness owed to Pivotal or any of its Subsidiaries, or (iii) waive, release, grant or transfer any right of material valueconsistent with past practice;
(kiv) make capital expenditures, except capital expenditures not in excess of $25,000 individually or $100,000 in the aggregate, for the Company and its Subsidiaries taken as a whole during any month;
(iv) materially modifymake investments in or acquisitions (by purchase of securities or assets, materially amendmerger or consolidation, terminateor otherwise) of other Persons, cancel, waive any material right under businesses or extend any Material Contract divisions thereof;
(vi) make loans or advances (other than renewals of Contracts with customers of Pivotal Products travel and similar advances to its employees, and trade credit to customers, in the ordinary course of business, consistent with past practice) to any Person other than the Company or a direct or indirect wholly owned Subsidiary of the Company;
(vii) (A) enter into, terminate, renew, extend or amend any Material Contract or Material Lease or any other contract or agreement that is material to the Company and its Subsidiaries taken as a whole, or (iiB) enter into or extend the term or scope of any Contract contract or agreement that if purports to restrict the Company or any Subsidiary from engaging in any line of business or in any geographic area;
(viii) increase the compensation of any of its directors or employees or enter into, establish or amend in any material respect any employment, retention, change in control, collective bargaining, bonus or other incentive compensation, profit sharing, health or other welfare, stock option or other equity (or equity-based), pension, retirement, vacation, severance, deferred compensation or other compensation or benefit plan, policy, agreement, trust, fund or arrangement with, for or in respect of, any director, executive officer or employee, other than as required pursuant to applicable Law or the terms of agreements or commitments in effect on as of the date hereof would be a Material Contractand listed in Section 5.1(a)(viii) of the Company Disclosure Schedule;
(ix) make, revoke or change any Tax election or settle or compromise any Tax liability, other than customer contracts entered into in an election not to have Section 382(l)(5) of the ordinary course of businessCode apply;
(lx) commence make any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal or any of its Subsidiaries), or compromise, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements changes in the ordinary course of business that involve only the payment of money damages not in excess of $500,000 individually or $2,000,000 in the aggregate, in any case without the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal or any of its Subsidiaries;
(m) change its financial or Tax tax accounting methods, principles or practices, except insofar as may have been be required by a change in GAAP or applicable Law;
(nxi) settle amend the Company Charter Documents;
(xii) adopt a plan or compromise any material liability for Taxes agreement of complete or surrender any material claim for partial liquidation, dissolution, restructuring, recapitalization, merger, consolidation or other reorganization;
(xiii) settle, compromise, fail to defend or cause a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liability; consent default judgment to any extension or waiver of the limitation period applicable to any claim or assessment in respect of a material amount of Taxes; grant any power of attorney be entered with respect to material Taxesany claim, litigation or proceeding by or against the Company or any of its Subsidiaries, any of their respective assets, or any of their respective officers or directors in their capacity as such, (A) involving a claim of damages in excess of $25,000 or seeking equitable relief, or (B) relating to any of the Transactions;
(xiv) accelerate accounts receivable on an aggregate basis;
(xv) delay payments to vendors or others to whom the Company owes payments on a general basis (except for disputed payments);
(xvi) create, or otherwise agree to, any restrictions on the ability of the Company or any of its Subsidiaries to transfer cash (or cash equivalents) between accounts outside of and inside the United States or on the free use of such cash;
(xvii) establish, or enter into, or make a financial commitment or contribute to, or amend the terms of, or terminate any joint venture, partnership agreement or similar arrangement or contract involving a sharing of profits, losses, business or opportunities with any other Person, including without limitation any such action with respect to the Joint Venture or the subject matter of the 3.18(g) Document; enter into or
(xviii) agree, in writing or otherwise, to take any Tax Sharing of the foregoing actions or take any action or agree, in writing or otherwise, to take any action that would cause the condition in paragraph (a) of Annex A not to be satisfied.
(b) The Company agrees that, during the period from the date of this Agreement until the Effective Time, except as expressly contemplated or permitted by this Agreement or as required by applicable Law, and except as may be agreed in writing by the Parent or Purchaser, the Company shall not, and shall not permit any closing agreement of its Subsidiaries to, take any action or other similar agreement; agree, in writing or otherwise, to take any action which would cause any of the representations or warranties of the Company set forth in this Agreement (A) that are qualified as to materiality or Material Adverse Effect to be untrue and (B) that are not so qualified to be untrue in any material respect.
(c) The Company shall give Purchaser notice of any effect, event or change any method of accounting for Tax purposes;that would reasonably be expected to have a Company Material Adverse Effect.
Appears in 1 contract
Conduct of Business. During the period from the date of this Agreement to the Effective TimeClosing, except (1) as set forth in Section 6.1 of the Company Disclosure Letter, (2) as consented to in writing in advance by VMware Parent (such consent not to be unreasonably withheld, conditioned or delayed), (3) as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) contemplated by this AgreementAgreement or (4) as required by Law or in respect of COVID-19 Actions to the extent required by any Law or Governmental Entity, Pivotal the Company shall, and shall cause each of its Subsidiaries to, use reasonable best efforts to carry on its business in the ordinary course, including its development Ordinary Course of Business and sales efforts as currently contemplated, and use commercially reasonable efforts to (i) preserve intact its business organization, preserve its material assets, rights and propertiesmaterial Permits, (ii) keep available the services of its current officers, officers and employees and consultants and (iii) preserve its goodwill and its relationships with customers, suppliers, licensors, licensees, distributors distributors, Collaboration Partners, and others having material business dealings with it. In addition to and without limiting the generality of the foregoing, during the period from the date of this Agreement to the Effective TimeClosing, except (x1) as set forth in section 5.1 Section 6.1 of the Pivotal Company Disclosure Letter, (y2) as consented to in writing in advance by Parent (such consent not to be unreasonably withheld, conditioned or delayed), (3) as otherwise specifically required expressly contemplated by this Agreement or (z4) as specifically required by applicable LawLaw or in respect of COVID-19 Actions to the extent required by any Law or Governmental Entity, Pivotal the Company shall not, and shall not permit any of its Subsidiaries, without VMware’s prior written consent (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), Subsidiaries to:
(a) (i) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock or other equity interests, except for dividends by a wholly owned Subsidiary of Pivotal the Company to Pivotal or any other wholly owned Subsidiary of Pivotalits parent, (ii) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal the Company or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, interests or (iii) split, combine, reclassify or otherwise amend the terms of any of its capital stock or other equity 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 other equity interestsinterests other than as otherwise provided for in Section 6.1(b);
(b) issue, deliver, sell, grant, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) any shares of its capital stock or other equity interests or any securities convertible into, exchangeable for or exercisable for any such shares or other equity interests, or any rights, warrants or options to acquire, any such shares or other equity interests, or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive shares of capital stock of VMware the Company on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof (other than the issuance of Class A Shares upon the exercise of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPP, in each case, that are Company Stock Options outstanding on the date of this Agreement and Made Available to VMware and otherwise Measurement Date in accordance with their terms as in effect on such datedate and issuances of Shares pursuant to the Company ESPP in accordance with Section 6.12);
(c) amend or otherwise change, or authorize or propose to amend or otherwise change, change its certificate of incorporation or bylaws by-laws (or similar organizational documents);
(d) directly or indirectly acquire or agree to acquire (i) by merging or consolidating with, purchasing a substantial an equity interest in or a substantial portion of the assets of, making an investment in or loan or capital contribution to or in any other similar manner, any corporation, partnership, association or other business organization or division thereof or (ii) any assets that are otherwise material to Pivotal and its Subsidiariesthe Company, except, in each case, for (1) capital expenditures which shall be subject to the limitations of clause (i) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes other than assets acquired in the ordinary course Ordinary Course of business consistent with Pivotal’s investment management policy, and except in the case of clause (ii), acquisitions of inventory, products or services in the ordinary course of business; Table of ContentsBusiness;
(e) directly or indirectly sell, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien or otherwise dispose in whole or in part of any of its material propertiesproperties (including Products and other Company Intellectual Property), assets or rights (including any material Pivotal Intellectual Property Registrations) or any interest therein, except, in each case, (i) except sales, pledges, dispositions, transfers, abandonments, leases, non-exclusive licenses, lapses, expirations, or encumbrances required to be effected prior to other dispositions of inventory in the Effective Time pursuant to existing Contracts that are not material to Pivotal and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Outof Business;
(f) adopt or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) other than in connection with the financing of ordinary course trade payables or accounts payable in the Ordinary Course of Business, incur, create, assume or otherwise become liable for, or repay, cancel, forgive repay or prepay, in each case, any IndebtednessIndebtedness in excess of $250,000, or amend, modify or refinance any material Indebtedness or (ii) other than with respect to accounts receivable and extensions of credit in the Ordinary Course of Business and advances in expenses to employees in the Ordinary Course of Business, make any loans, advances or capital contributions to, or investments in, any other Person, other than Pivotal the Company or any direct or indirect wholly owned Subsidiary of Pivotalthe Company;
(ih) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto that in the aggregate are in excess of $1,000,000100,000 in the aggregate or not otherwise provided for in the capital expenditure budget set forth in Section 6.1(h) of the Company Disclosure Letter;
(ji) except as required by any judgment by a court of competent jurisdiction, (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise)) in excess of $100,000 in any individual case, other than (A) the payment, discharge or satisfaction in the ordinary course Ordinary Course of business, (B) Business or as required by their terms as in effect on the date of this Agreement of claims, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of Pivotal the Company included in the Pivotal Company SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements in the ordinary course Ordinary Course of businessBusiness, (ii) cancel or otherwise forgive any material Indebtedness owed to Pivotal the Company or any of its Subsidiaries, Subsidiaries (including loans made to Service Providers) or (iii) waive, release, grant or transfer any right of material value;
(k) (i) materially modify, materially amend, terminate, waive, release or assign any rights under, cancel, waive extend, determine not to renew, or exercise any material right option under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (iiContract,(ii) enter into any Contract that if in effect on the date hereof would be a Material Contract, other than customer contracts entered into or (iii) amend or modify any Contract in existence on the ordinary course of businessdate hereof that, after giving effect to such amendment or modification, would be a Material Contract;
(lk) commence any Legal Proceeding Action (other than a Legal Proceeding an Action as a result of a Legal Proceeding an Action commenced against Pivotal the Company or any of its Subsidiaries)Subsidiaries or any Action taken against Parent, Merger Sub, or any of their respective Affiliates) for monetary consideration in excess of $100,000, or, other than in connection with a breach of this Agreement or any other agreements contemplated hereby, compromise, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject Action (including any Action relating to section 5.7), compromises, settlements this Agreement or agreements the transactions contemplated hereby) that results in the ordinary course of business that involve only the a payment of money damages not in excess monies to or from the Company of more than $500,000 individually or $2,000,000 in the aggregate, 100,000 in any case without the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal or any of its Subsidiariesindividual case;
(ml) change its financial or Tax accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law, or revalue any of its material assets;
(m) change its fiscal year;
(n) settle or compromise any material liability for Taxes income or surrender any other material claim for a refund of Taxes; file any amended income or other material Tax Return or claim for an income or other material Tax refund; make, revoke or modify any material Tax election, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any income or other material Tax Return other than in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liabilitypractice; consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of a income or other material amount Taxes outside of Taxesthe Ordinary Course of Business; grant fail to pay any power of attorney with respect income or other material Taxes when due or fail to file any material TaxesTax Return when due (taking into account any valid extensions); enter into any Tax Sharing Agreement allocation agreement, Tax sharing agreement, Tax indemnity agreement or any closing agreement or (in each case, other similar agreementthan standard commercial agreements with third parties entered into in the Ordinary Course of Business the principal purpose of which is unrelated to Taxes); or change any method of accounting for Tax purposes;
(o) other than as required to comply with applicable Law or a Company Plan in effect as of the date hereof (i) grant any Service Provider any increase in compensation, bonus or other benefits, or grant any type of compensation or benefits to any Service Provider who was not previously receiving or entitled to receive such type of compensation or benefit, or pay any bonus of any kind or amount to any Service Provider, other than, in the Ordinary Course of Business, individual increases of up to three percent (3%) in the annual base salary or wage rate, (ii) grant or pay to any current or former Service Provider any severance, termination, retention, change in control, transaction or similar payments or benefits, or make any modifications thereto or increases thereof, (iii) pay any benefit or grant or amend any award (including in respect of stock-based or stock-related awards or the removal or modification of any restrictions in any Company Plan or awards made thereunder), (iv) adopt or enter into any collective bargaining agreement or other labor union contract, (v) take any action to accelerate the vesting, funding or payment of any compensation or benefit under any Company Plan or other Contract or (vi) establish, adopt or enter into any new employee benefit or compensation plan or arrangement or amend, modify, materially alter the prior interpretation of or terminate any existing Company Plan, in each case for the benefit of any current or former Service Provider;
(p) hire any officer or any other Service Provider with annual base compensation of $200,000 or higher;
(q) terminate any officer or any other Service Provider with annual base compensation of $200,000 or higher or otherwise cause any such individual to resign, in each case other than for cause or poor performance (documented in accordance with the Company’s past practices);
(r) terminate, allow to lapse or expire, suspend, modify in any material respect or otherwise take any step to materially limit the effectiveness or validity of, or fail to maintain as valid and in full force and effect, any Permit (including all Company Permits);
(s) enter into any new line of business outside of its existing business;
(t) (i) sell, assign or transfer all or any portion of the Owned Company Intellectual Property, (ii) grant any licenses of Company Intellectual Property, excluding non-exclusive licenses entered into by the Company or any of its Subsidiaries in the ordinary course of business (iii) abandon, permit to lapse or cease to prosecute or maintain any of the Company Registered IP, or (iv) disclose to any third party, other than under a confidentiality agreement or other legally binding confidentiality undertaking, any material trade secret of the Company or any of its Subsidiaries that is included in the Company Intellectual Property in a way that results in loss of material trade secret protection thereon, except for any such disclosures made as a result of publication of a patent application filed by the Company or any of its Subsidiaries or in connection with any required regulatory filing;
(u) adopt or implement any stockholder rights plan or similar arrangement;
(v) (i) commence, alone or with any third party, any research program or pre-clinical or clinical study that has not been disclosed to Parent prior to the date of this Agreement, (ii) unless mandated by any Governmental Entity, discontinue, terminate or suspend any ongoing research program or clinical study or (iii) unless mandated by any Governmental Entity, make any material change to, discontinue, terminate or suspend any ongoing clinical study; or
(w) authorize any of, or commit, resolve or agree to take any of, the foregoing actions. Notwithstanding anything to the contrary set forth herein, nothing contained in this Agreement shall give Parent or its Affiliates, directly or indirectly, the right to control or direct the operations of the Company or any of its Subsidiaries or to require consents from Parent, in violation of the HSR Act or any other applicable Law prior to the Closing. Prior to the Closing, the Company and each of its Subsidiaries shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over their respective operations.
Appears in 1 contract
Conduct of Business. (a) Conduct of Business by the -------------------- -------------------------- Company. During the period from the date of this Agreement to the Effective -------- Time, except as consented to in writing in advance by VMware or as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) by this Agreement, Pivotal Company shall, and shall cause each of its Subsidiaries to, carry on its business their respective businesses in the ordinary coursecourse consistent with past practice and in compliance with all applicable laws and regulations and, including its development and sales efforts as currently contemplatedto the extent consistent therewith, and use commercially all reasonable efforts to (i) preserve intact its current business organizationorganizations, assets, rights and properties, (ii) keep available the services of its current officers, officers and employees and consultants and (iii) preserve its goodwill and its relationships with customers, suppliers, licensors, licensees, distributors and others having material business dealings with itthem with the intention that its goodwill and ongoing business shall be unimpaired at the Effective Time. In addition to and without Without limiting the generality of the foregoing, during the period from the date of this Agreement to the Effective Time, except (x) as set forth in section 5.1 of the Pivotal Disclosure Letter, (y) as specifically required by this Agreement or (z) as specifically required by applicable Law, Pivotal Company shall not, and shall not permit any of its Subsidiaries, without VMware’s prior written consent (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), Subsidiaries to:
(ai) (ix) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) ), in respect of, any of its capital stock stock, other than dividends or other equity interests, except for dividends distributions by a direct or indirect wholly owned Subsidiary of Pivotal the Company to Pivotal or any other wholly owned Subsidiary of Pivotalits parent, (ii) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iiiy) split, combine, combine or reclassify or otherwise amend the terms of any of its capital stock or other equity 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 (z) purchase, redeem or otherwise acquire any shares of its capital stock or any other equity interestssecurities thereof or any rights, warrants or options to acquire any such shares or other securities;
(bii) issue, deliver, sell, grant, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) any shares of its capital stock or stock, any other equity interests voting securities or any securities convertible into, exchangeable for or exercisable for any such shares or other equity interests, or any rights, warrants or options to acquire, any such shares shares, voting securities or convertible securities (other equity interests, or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive than (x) the issuance of shares of capital stock Company Common Stock upon the exercise of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect Stock Options outstanding on the date hereof (other than the issuance of Class A Shares upon the exercise of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPP, in each case, that are outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with their terms as in effect on such datethe date hereof or (y) the issuance of shares of Company Common Stock pursuant to the Option Agreement), or any "phantom" stock, "phantom" stock rights, stock appreciation rights or stock based performance units;
(ciii) amend its Amended and Restated Articles of Incorporation or otherwise change, Bylaws or authorize other comparable charter or propose to amend or otherwise change, its certificate of incorporation or bylaws (or similar organizational documents);
(div) directly or indirectly acquire or agree to acquire (ix) by merging or consolidating with, or by purchasing a substantial equity interest in or a substantial portion of the assets of, making an investment in or loan or capital contribution to or in by any other manner, any corporationPerson or division, partnership, association business or other business organization or division thereof equity interest of any Person or (iiy) any assets that which, individually, are otherwise material to Pivotal and its Subsidiariesin excess of $1,000,000, except, in each case, except for (1) capital expenditures which shall be subject to the limitations of clause (i) below and (2) purchases of marketable securities by raw materials or on behalf of Pivotal or its Subsidiaries for cash management purposes supplies in the ordinary course of business consistent with Pivotal’s investment management policy, and except in the case of clause (ii), acquisitions of inventory, products or services in the ordinary course of business; Table of Contentspast practice;
(ev) directly or indirectly sell, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien or otherwise dispose in whole or in part of any of its material properties, properties or assets or rights (including securitizations), except sales of inventory in the ordinary course of business consistent with past practice;
(vi) (x) incur any material Pivotal Intellectual Property Registrations) indebtedness for borrowed money or guarantee any such indebtedness of another Person, issue or sell any debt securities or warrants or other rights to acquire any debt securities of the Company or any interest therein, except, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal and of its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Out;
(f) adopt guarantee any debt securities of another Person, enter into any "keep well" or other agreement to maintain any financial statement condition of another Person or enter into a plan any arrangement having the economic effect of complete or partial liquidationany of the foregoing, dissolution, restructuring, recapitalization or other reorganization;
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay except for short-term borrowings incurred in the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness ordinary course of business consistent with past practice or (iiy) make any loans, advances or capital contributions to, or investments in, any other Person, other than Pivotal in the ordinary course of business or to or in any direct or indirect wholly owned Subsidiary of Pivotalthe Company;
(ivii) incur except for projects already approved, make or commit agree to incur make any new capital expenditure or authorization expenditures (including leases and in-licenses), or commitment with respect thereto that in the aggregate enter into any agreement or agreements providing for payments which, individually, are in excess of $1,000,000;
(jviii) except as required by any judgment by a court of competent jurisdiction, (iw) pay, discharge, settle or satisfy any claims, liabilities liabilities, obligations or obligations litigation (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge discharge, settlement or satisfaction in the ordinary course of businessbusiness consistent with past practice or in accordance with their terms, (B) as required by their terms as in effect on the date of this Agreement of claimsliabilities disclosed, liabilities or obligations reflected or reserved against in the most recent audited consolidated financial statements (or the notes thereto) of Pivotal the Company included in the Pivotal Filed SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements in the ordinary course of businessbusiness consistent with past practice, (iix) cancel any material Indebtedness owed indebtedness, (y) waive or assign any claims or rights of substantial value or (z) waive any benefits of, or agree to Pivotal modify in any respect (A) any standstill or similar agreements to which the Company or any of its Subsidiaries, Subsidiaries is a party or (iiiB) waive, release, grant or transfer any right of material value;
(k) (i) materially modify, materially amend, terminate, cancel, waive any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business, any confidentiality or similar agreements to which the Company or any of its Subsidiaries is a party;
(A) except in the ordinary course of business consistent with past practice, modify, amend or terminate any material contract or agreement to which the Company or any of its Subsidiaries is a party or (iiB) modify, amend or terminate the Sales and Distribution Agreement between the Company and Xxx Xxxxx and Company dated July 15, 1992, as amended, or the Distribution Agreement by and between the Company and Schering-Plough, Ltd. dated as of April 3, 1998;
(x) enter into any Contract contracts, agreements, binding arrangements or understandings relating to the distribution, sale, license, marketing or manufacturing by third parties of the Company's or its Subsidiaries' products or products licensed by the Company or its Subsidiaries, other than pursuant to any such contracts, agreements, arrangements or understandings currently in place (that if have been disclosed in writing to Parent prior to the date hereof) in accordance with their terms as of the date hereof;
(xi) except as otherwise contemplated by this Agreement or as required to comply with applicable law, (A) adopt, enter into, terminate or amend in any material respect (I) any collective bargaining agreement or Benefit Plan or (II) any other agreement, plan or policy involving the Company or its Subsidiaries, and one or more of its current or former directors, officers or employees, (B) increase in any manner the compensation, bonus or fringe or other benefits of, or pay any bonus to, any current or former officer, director or employee (except for normal increases of cash compensation or cash bonuses in the ordinary course of business consistent with past practice that, in the aggregate, do not materially increase benefits or compensation expenses of the Company or its Subsidiaries), (C) pay any benefit or amount not required under any Benefit Plan or any other benefit plan or arrangement of the Company or its Subsidiaries as in effect on the date hereof of this Agreement, (D) increase in any manner the severance or termination pay of any current or former director, officer or employee, (E) enter into or amend any employment, deferred compensation, consulting, severance, termination or indemnification agreement, arrangement or understanding with any current or former employee, officer or director, (F) grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or Benefit Plan (including the grant of stock options, "phantom" stock, stock appreciation rights, "phantom" stock rights stock based or stock related awards, performance units or restricted stock or the removal of existing restrictions in any Benefit Plans or agreements or awards made thereunder), (G) amend or modify any Stock Option, (H) take any action to fund or in any other way secure the payment of compensation or benefits under any employee plan, agreement, contract or arrangement or Benefit Plan, (I) take any action to accelerate the vesting of payment of any compensation or benefit under any Benefit Plan or (J) materially change any actuarial or other assumption used to calculate funding obligations with respect to any Pension Plan or change the manner in which contributions to any Pension Plan are made or the basis on which such contributions are determined;
(xii) except as otherwise contemplated by this Agreement, enter into any agreement of a nature that would be a Material Contractrequired to be filed as an exhibit to Form 10-K under the Exchange Act, other than customer contracts entered into for the sale of the Company's or its Subsidiaries' products in the ordinary course of business;
(lxiii) commence except as required by GAAP, make any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal or any of its Subsidiaries), or compromise, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements change in the ordinary course of business that involve only the payment of money damages not in excess of $500,000 individually or $2,000,000 in the aggregate, in any case without the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal or any of its Subsidiaries;
(m) change its financial or Tax accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law;
(nxiv) settle transfer or compromise license to any material liability for Taxes Person or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; makeotherwise extend, revoke amend or modify any material Tax electionrights to the Intellectual Property Rights of the Company and its Subsidiaries; or
(xv) authorize any of, or change commit or agree to take any of, the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liability; consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of a material amount of Taxes; grant any power of attorney with respect to material Taxes; enter into any Tax Sharing Agreement or any closing agreement or other similar agreement; or change any method of accounting for Tax purposes;foregoing actions.
Appears in 1 contract
Samples: Merger Agreement (Centocor Inc)
Conduct of Business. During the period from the date of this Agreement to (a) From the Effective TimeDate through the Closing, the Company will, and will cause its Subsidiaries to, except as contemplated by this Agreement or as consented to by Buyer in writing (which consent may not be unreasonably conditioned, withheld, delayed or denied), operate its business in advance by VMware or as otherwise expressly required or prohibited (including by the restrictions set forth ordinary course consistent in subclauses (a) through (r) below) by this Agreementall material respects with past practice. To the extent consistent therewith, Pivotal shallthe Company will, and shall will cause each of its Subsidiaries to, carry on use its business in the ordinary course, including its development and sales efforts as currently contemplated, and use commercially reasonable efforts to (i) preserve substantially intact its and its Subsidiaries’ business organization, assets, rights and properties, (ii) to keep available the services of its and its Subsidiaries’ current officersofficers and employees, employees and consultants and (iii) to preserve its goodwill and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees, distributors licensees and others other Persons having material business dealings relationships with it. In addition to and without .
(b) Without limiting the generality of the foregoing, during the period from the date of this Agreement to the Effective Time, except (x) as set forth on Schedule 5.1 or as consented to by Buyer in section 5.1 of writing (which consent may not be unreasonably conditioned, withheld, delayed or denied except as to Sections 5.1(b)(i)-(v)), the Pivotal Disclosure Letter, (y) as specifically required by this Agreement or (z) as specifically required by applicable Law, Pivotal shall Company will not, and shall the Company will cause its Subsidiaries not permit to, except as otherwise contemplated by this Agreement:
(i) amend the articles of incorporation, code of regulations or other organizational documents of the Company or any of its Subsidiaries, without VMware’s prior written consent (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), to:except as required by Law;
(aii) (i) declaresplit, set aside combine or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, reclassify any of its capital stock or other equity interests, except for dividends by a wholly owned Subsidiary of Pivotal to Pivotal or any other wholly owned Subsidiary of Pivotal, (ii) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii) split, combine, reclassify or otherwise amend the terms of any of its capital stock or other equity 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 other equity interestsstock;
(biii) issueissue any warrants, deliver, sell, grant, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act options or other applicable securities Laws) any rights to purchase shares of its capital stock or other equity interests or any securities convertible into, exchangeable for or exercisable for any such shares or other equity interests, or any rights, warrants or options to acquire, any such shares or other equity interests, or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive into shares of its capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof (other than the issuance of Class A Shares upon the exercise of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPP, in each case, that are outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with their terms as in effect on such date)stock;
(civ) amend or otherwise change, or authorize or propose make any distribution to amend or otherwise change, its certificate of incorporation or bylaws (or similar organizational documents)Shareholders;
(dv) directly redeem or indirectly acquire or agree to acquire (i) by merging or consolidating with, purchasing a substantial repurchase any portion of any equity interest in the Company or a substantial portion of the assets of, making an investment in or loan or capital contribution to or in any other manner, any corporation, partnership, association or other business organization or division thereof or (ii) any assets that are otherwise material to Pivotal and its Subsidiaries, except, in each case, for (1) capital expenditures which shall be subject to the limitations of clause (i) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes in the ordinary course of business consistent with Pivotal’s investment management policy, and except in the case of clause (ii), acquisitions of inventory, products or services in the ordinary course of business; Table of ContentsSubsidiary;
(evi) directly or indirectly sell, leaseassign, licensetransfer, sell and leasebackconvey, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien lease or otherwise dispose in whole or in part of any of its material assets or properties, assets or rights (including any material Pivotal Intellectual Property Registrations) or any interest therein, except, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Out;
(f) adopt or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, other than Pivotal or any direct or indirect wholly owned Subsidiary of Pivotal;
(i) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto that in the aggregate are in excess of $1,000,000;
(j) except as required by any judgment by a court of competent jurisdiction, (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge or satisfaction in the ordinary course of business, (B) as required by their terms as in effect on the date of this Agreement of claims, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements in the ordinary course of business, (ii) cancel any material Indebtedness owed to Pivotal or any of its Subsidiaries, or (iii) waive, release, grant or transfer any right of material value;
(k) (i) materially modify, materially amend, terminate, cancel, waive any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (ii) enter into any Contract that if in effect on the date hereof would be a Material Contract, other than customer contracts entered into in the ordinary course of business;
(lvii) commence (A) except as otherwise required by Law or existing Employee Plans, take any Legal Proceeding action with respect to the grant of any severance or termination pay (other than a Legal Proceeding as a result pursuant to policies or agreements of a Legal Proceeding commenced against Pivotal the Company or any of its Subsidiaries)Subsidiaries in effect on the Effective Date) which will become due and payable after the Closing Date to any employee or any director of the Company, or compromise, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements (B) except in the ordinary course of business that involve only the payment of money damages not in excess of $500,000 individually business, adopt, enter into or $2,000,000 in the aggregate, in materially amend any case without the imposition of any equitable relief on, or the admission of wrongdoing by, Pivotal or any of its SubsidiariesEmployee Plan;
(mviii) change its financial acquire by merger or Tax accounting methodsconsolidation with, principles or practicesmerge or consolidate with, or purchase substantially all of the stock or assets of, any corporation, partnership, association, joint venture or other business organization or division thereof;
(ix) make any material loans or material advances to any officer who is also a Shareholder or any director of the Company, except insofar for advances for expenses;
(x) make or change any election, change an annual accounting period or adopt or change any accounting method (other than as may have been required by a change in GAAP or applicable Law;
(n) ), file any amended Tax Return, enter into any closing agreement, settle any Tax claim or compromise assessment relating to the Company or any material liability for Taxes or Subsidiary, surrender any material right to claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liability; consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any Subsidiary, if such election, adoption, change, amendment, agreement, settlement, surrender, consent, or other action would have the effect of materially increasing the Tax liability of the Company or any Subsidiary, or decreasing any Tax attribute of the Company or any Subsidiary existing on the Closing Date;
(xi) (A) make any material loans, advances or capital contributions to any other Person, other than (1) loans, advances or capital contributions by the Company to one or more of its wholly-owned Subsidiaries or by any Subsidiary of the Company to the Company or any wholly-owned Subsidiary of the Company or (2) extensions of loans or advances in respect the ordinary course of business consistent with past practice, (B) incur, assume, guarantee or repurchase any indebtedness for borrowed money (or obtain any commitment(s) therefor) other than pursuant to the Company’s existing credit facilities as of the Effective Date or (C) create or incur any Lien, except for a Permitted Lien, on any material asset;
(xii) institute, settle or compromise any Actions pending or threatened before any arbitrator, court or other Governmental Authority involving the payment after the Effective Time of monetary damages by the Company or any of its Subsidiaries of any uninsured amount of Taxesexceeding $100,000 in the aggregate; grant any power of attorney with respect to material Taxes; or
(xiii) enter into any Tax Sharing Agreement agreement, or otherwise become obligated, to do any closing agreement or other similar agreement; or change any method of accounting for Tax purposes;action prohibited under this Section 5.1(b).
Appears in 1 contract
Samples: Merger Agreement (PENTAIR PLC)
Conduct of Business. During the period from the date of Except as contemplated by this Agreement to the Effective TimeAgreement, except set forth on SCHEDULE 6.1 or as otherwise consented to in writing in advance by VMware Parent (which such consent may not be unreasonably withheld, conditioned or as otherwise expressly required or prohibited (including by delayed), from the restrictions set forth in subclauses date hereof through the Closing, the Company, covenants and agrees that:
(a) through Except for recruitment of new employees, salary increases or the introduction of new or modifications to employee benefit arrangements consistent with the Ordinary Course of Business, the Company shall not permit any Acquired Company to (ri) belowincrease in any manner the base compensation of, or enter into any new bonus or incentive agreement or arrangement with, any of its employees, (ii) enter into any new employment, severance, consulting, or other compensation agreement with any of its existing employees or any other Person, (iii) amend or enter into a new Employee Benefit Plan (except as required by Law), or (iv) make or agree to make any bonus or profit sharing payments to any employee or any other Person.
(b) Subject to the terms and conditions of this Agreement, Pivotal shall, and the Company shall cause each of its Subsidiaries to, carry on its business in the ordinary course, including its development and sales efforts as currently contemplated, and Acquired Companies to use commercially reasonable efforts Best Efforts to (i) preserve intact its business organization, assets, rights and properties, (ii) keep available the services of its current officers, present employees and consultants preserve the goodwill, reputation and (iii) preserve its goodwill and its present relationships of the Business with suppliers, customers, suppliers, licensors, licensees, distributors licensors and others having material business dealings relations with it. In addition to and without limiting the generality any of the foregoingAcquired Companies, during and will not enter any Contracts that would be a Material Contract other than in the period from the date Ordinary Course of this Agreement to the Effective Time, except Business.
(xc) as set forth in section 5.1 The Company shall cause each of the Pivotal Disclosure Letter, Acquired Companies to use Best Efforts to conduct the Business in all material respects according to its Ordinary Course of Business in substantially the same manner as heretofore conducted.
(yd) as specifically required by this Agreement or (z) as specifically required by applicable Law, Pivotal The Company shall not, and shall not permit any of its SubsidiariesAcquired Company to, without VMware’s prior written consent (which consentissue, in the cases of the matters set forth in subclauses (e), (g), (i), (j) deliver or (k) below shall not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), to:
(a) (i) declare, set aside or pay any dividends onsell, or make any other distributions (whether in cashauthorize or propose the issuance, stock delivery or property) in respect sale of, any of its capital stock or other equity interests, except for dividends by a wholly owned Subsidiary of Pivotal to Pivotal or any other wholly owned Subsidiary of Pivotal, (ii) purchase, redeem or otherwise acquire shares of capital stock of any class or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii) split, combine, reclassify or otherwise amend the terms of any of its capital stock or other equity 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 other equity interests;
(b) issue, deliver, sell, grant, pledge or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) any shares of its capital stock or other equity interests or any securities convertible into, exchangeable for or exercisable for any such shares or other equity interests, or any rights, warrants warrants, calls, subscriptions or options to acquire, any such shares or other shares, equity interests, or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive shares of capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof (other than the issuance of Class A Shares upon the exercise of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPP, in each case, that are outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with their terms as in effect on such date);
(c) amend or otherwise change, or authorize or propose to amend or otherwise change, its certificate of incorporation or bylaws (or similar organizational documents);
(d) directly or indirectly acquire or agree to acquire (i) by merging or consolidating with, purchasing a substantial equity interest in or a substantial portion of the assets of, making an investment in or loan or capital contribution to or in any other manner, any corporation, partnership, association or other business organization or division thereof or (ii) any assets that are otherwise material to Pivotal and its Subsidiaries, except, in each case, for (1) capital expenditures which shall be subject to the limitations of clause (i) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes in the ordinary course of business consistent with Pivotal’s investment management policy, and except in the case of clause (ii), acquisitions of inventory, products or services in the ordinary course of business; Table of Contentsconvertible securities.
(e) directly or indirectly The Company shall not, and shall not permit any Acquired Company to, amend its Organizational Documents.
(f) The Company shall not, and shall not permit any Acquired Company to, sell, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien or otherwise dispose in whole of, or in part of agree to sell, lease, license, encumber or otherwise dispose of, any of its material properties, assets or rights (including any material Pivotal Intellectual Property Registrations) or any interest therein, except, other than in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Out;
(f) adopt or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;Business.
(g) fail The Company will use reasonable efforts to maintaincontinue the capital expenditure projects identified on SCHEDULE 6.1(G) in the Ordinary Course of Business and with respect to which the Company currently anticipates spending approximately $5,000,000 in each of April, 2007 and May 2007. Notwithstanding the foregoing, the Company's covenants and agreements set forth in paragraphs (b) and (c) of this SECTION 6.1 shall not be breached or allow to lapsedeemed violated in the event that any supplier, customer, licensor and other Person having a business relationship with any of the Acquired Companies terminates or abandondiscontinues its business relationship with an Acquired Company (or otherwise conditions the continuation of its business relationship with an Acquired Company, including by failure to pay the required fees in receipt of any jurisdiction, any material Pivotal Intellectual Property Registrations;
(hpayment or pricing or other contractual concessions) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, other than Pivotal or any direct or indirect wholly owned Subsidiary of Pivotal;
(i) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto that in the aggregate are in excess of $1,000,000;
(j) except as required by any judgment by a court of competent jurisdiction, (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge or satisfaction in the ordinary course of business, (B) as required by their terms as in effect on the date of this Agreement of claims, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements in the ordinary course of business, (ii) cancel any material Indebtedness owed to Pivotal or any of its Subsidiaries, or (iii) waive, release, grant or transfer any right of material value;
(k) (i) materially modify, materially amend, terminate, cancel, waive any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (ii) enter into any Contract that if in effect on the date hereof would be a Material Contract, other than customer contracts entered into in the ordinary course of business;
(l) commence any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal the announcement or any performance of its Subsidiaries), or compromise, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements in the ordinary course of business that involve only the payment of money damages not in excess of $500,000 individually or $2,000,000 in the aggregate, in any case without the imposition of any equitable relief on, this Agreement or the admission of wrongdoing by, Pivotal or any of its Subsidiaries;
(m) change its financial or Tax accounting methods, principles or practices, except insofar as may have been required transactions contemplated by a change in GAAP or applicable Law;
(n) settle or compromise any material liability for Taxes or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liability; consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of a material amount of Taxes; grant any power of attorney with respect to material Taxes; enter into any Tax Sharing Agreement or any closing agreement or other similar agreement; or change any method of accounting for Tax purposes;this Agreement.
Appears in 1 contract
Samples: Merger Agreement (Pactiv Corp)
Conduct of Business. During the period from the date of (a) Except as expressly contemplated by this Agreement to the Effective Time, except as consented to in writing in advance by VMware or as otherwise expressly required by applicable Law or prohibited (including by the restrictions as set forth in subclauses (aSection 5.1(a) through (r) below) by this Agreement, Pivotal shall, and shall cause each of its Subsidiaries to, carry on its business in the ordinary course, including its development and sales efforts as currently contemplated, and use commercially reasonable efforts to (i) preserve intact its business organization, assets, rights and properties, (ii) keep available the services of its current officers, employees and consultants and (iii) preserve its goodwill and its relationships with customers, suppliers, licensors, licensees, distributors and others having material business dealings with it. In addition to and without limiting the generality of the foregoingCompany Disclosure Schedule, during the period from the date of this Agreement to the Effective Time, except unless Parent otherwise provides its prior written consent, the Company shall, and shall cause its Subsidiaries to, conduct its operations in the ordinary course consistent with past practice, and shall use reasonable best efforts to maintain and preserve its business organization and its material rights and franchises and to retain the services of its officers and key employees and maintain relationships with customers, suppliers, lessees, licensees and other third parties having significant business relationships with it, and to maintain all of its operating assets in their current condition (x) normal wear and tear excepted), to the end that their goodwill and ongoing business shall not be impaired in any material respect (it being understood that any impairment of such goodwill and ongoing business shall not be a breach of this sentence so long as set forth the Company and its Subsidiaries shall have complied with their respective obligations to use reasonable best efforts as provided in section 5.1 of the Pivotal Disclosure Letter, (y) this sentence). Except as specifically required contemplated or permitted by this Agreement or (z) as specifically required by applicable LawLaw or as contemplated by Section 5.1(a) of the Company Disclosure Schedule, Pivotal shall notduring the period from the date of this Agreement until the Effective Time, and shall not permit any of unless Parent otherwise provides its Subsidiaries, without VMware’s prior written consent (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below consent shall not be unreasonably withheld, conditioned or delayed, and in all other cases delayed if the Expiration Date shall be in VMware’s sole discretionnot have occurred within 60 days of the commencement of the Offer), toneither the Company nor its Subsidiaries shall:
(ai) (iA) issue, deliver, sell or grant, pledge or otherwise encumber or subject to any Lien, any shares of its capital stock, any other voting securities, or any other securities or rights convertible into, exchangeable or exercisable for, or evidencing the right to subscribe for any shares of its capital stock, or any rights, warrants or options to purchase any shares of its capital stock, or any securities or rights convertible into, exchangeable or exercisable for, or evidencing the right to subscribe for, any shares of its capital stock; provided that the Company may issue shares of Company Common Stock (and the related rights under the Company Rights Plan) upon the exercise of Options and SARs that are outstanding on the date of this Agreement, in accordance with their respective terms as of the date of this Agreement; (B) redeem, purchase or otherwise acquire any of its outstanding shares of capital stock, or any other securities thereof or any rights, warrants or options to acquire any such shares or securities, except in connection with the exercise of Options and SARs that are outstanding on the date of this Agreement and in accordance with their respective terms as of the date of this Agreement and consistent with past practice; (C) declare, set aside for payment or pay any dividends dividend on, or make any other distributions distribution (whether in cash, stock or propertyother form) in respect of, any shares of its capital stock or other equity interestsstock; (D) adjust, except for dividends by a wholly owned Subsidiary of Pivotal to Pivotal or any other wholly owned Subsidiary of Pivotal, (ii) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of Pivotal or its Subsidiaries or any options, warrants, or rights to acquire any such shares or other equity interests, other than (A) the withholding of Class A Shares to satisfy tax obligations with respect to awards granted pursuant to the Pivotal Stock Plans and outstanding on the date of this Agreement or as permitted by this Agreement, in accordance with their terms on the date of this Agreement and (B) the acquisition by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement or as permitted by this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii) split, combine, subdivide or reclassify or otherwise amend the terms of any of its capital stock or other equity 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 other equity interests(E) enter into any Contract, understanding or arrangement with respect to the sale, voting, registration or repurchase of Company Common Stock or the capital stock of any Subsidiary of the Company;
(bii) issueredeem, deliverrepurchase, prepay, defease, cancel, incur, create, assume or otherwise acquire, or modify in any material respect the terms of, any indebtedness for borrowed money or assume, guarantee or endorse, or otherwise become responsible for, any such indebtedness of another Person, issue or sell any debt securities or calls, options, warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries or enter into any arrangement having the economic effect of any of the foregoing except for (A) borrowings made pursuant to the Financing Agreement among the Company and certain of its subsidiaries and The CIT Group/Business Credit, Inc., in accordance with its terms and consistent with past practice and (B) other amounts not in excess of $250,000 in the aggregate outstanding at any time;
(iii) sell, grantpledge, pledge dispose of, transfer, lease, license, or otherwise encumber or subject to any Lien (other than transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws) any shares of its capital stock or other equity interests or any securities convertible into, exchangeable for or exercisable for any such shares or other equity interests, or any rights, warrants or options to acquirea Permitted Lien), any such shares or other equity interests, or any stock appreciation rights, “phantom” stock rights, performance unitsproperties, rights to receive shares of capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares assets, except sales, pledges, dispositions, transfers, leases, licenses or Class B Shares, including pursuant to Contracts as in effect on the date hereof encumbrances (other than the issuance of Class A Shares upon the exercise of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPP, in each case, that are outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with their terms as in effect on such date);
(cA) amend or otherwise change, or authorize or propose to amend or otherwise change, its certificate of incorporation or bylaws (or similar organizational documents);
(d) directly or indirectly acquire or agree to acquire (i) by merging or consolidating with, purchasing a substantial equity interest in or a substantial portion of the assets of, making an investment in or loan or capital contribution to or in any other manner, any corporation, partnership, association or other business organization or division thereof or (ii) any assets that are otherwise material to Pivotal and its Subsidiaries, except, in each case, for (1) capital expenditures which shall be subject to the limitations of clause (i) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes in the ordinary course of business consistent with Pivotal’s investment management policy, and except in the case of clause past practices (ii), acquisitions of inventory, products or services in the ordinary course of business; Table of Contents
(eB) directly or indirectly sell, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien or otherwise dispose in whole or in part of any of its material properties, assets or rights (including any material Pivotal Intellectual Property Registrations) or any interest therein, except, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Out;
(f) adopt or enter into a plan in force on the date of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, other than Pivotal or any direct or indirect wholly owned Subsidiary of Pivotal;
(i) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto that in the aggregate are in excess of $1,000,000;
(j) except as required by any judgment by a court of competent jurisdictionthis Agreement, (iC) pay, discharge, settle dispositions of inventory or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge or satisfaction assets in the ordinary course of businessbusiness or which are obsolete or worthless or (D) transfers among the Company and its wholly owned Subsidiaries;
(iv) make any capital expenditures in excess of $250,000 individually or $750,000 in the aggregate;
(v) directly or indirectly acquire (A) by merging, consolidating with, purchasing a material portion of the assets of, by making an investment in or capital contribution to, or by any other manner, any Person or division, business or equity interest of any Person or (B) any assets, rights, or properties except (1) for capital expenditures (which shall be governed by clause (iv) above), (2) for purchases of inventory, components, raw materials or supplies or finished products, services, or marketing campaigns in the ordinary course of business consistent with past practice and (3) pursuant to Contracts in effect as of the date of this Agreement;
(vi) (A) increase in a material respect the compensation of any of its directors, officers or employees, other than (1) as required pursuant to applicable Law or the terms of Collective Bargaining Agreements or Contracts in effect on the date of this Agreement and listed in the Company Disclosure Schedule, (2) increases in salaries, wages, bonuses and benefits of employees (other than executive officers) made in the ordinary course of business consistent with past practice, and (3) increases in salaries, wages, bonuses and benefits of executive officers in amounts set forth on Section 5.1(a)(vi)(A)(3) of the Company Disclosure Schedule; (B) grant or provide any severance or termination payments or benefits to any director, employee or consultant of the Company or any of its Subsidiaries, other than as required by their the terms of any Benefit Plan as in effect on the date of this Agreement; (C) make any new equity awards to any director, employee or consultant of the Company or any of its Subsidiaries; (D) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, compensation or benefits under any Benefit Plan to the extent not required by the terms of such Benefit Plan as in effect on the date of this Agreement of claims, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements in the ordinary course of business, (ii) cancel any material Indebtedness owed to Pivotal or any of its Subsidiaries, or (iii) waive, release, grant or transfer any right of material value;
(k) (i) materially modify, materially amend, terminate, cancel, waive any material right under or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (iiE) enter into or amend any Contract collective bargaining agreements; provided, however, that if nothing in effect on this Section 5.1 shall prevent the date hereof would be a Material Contract, other than customer contracts entered into in Company or its Subsidiaries from hiring new employees as non-officers or non-directors of the ordinary course of business;
(l) commence any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal or any of its Subsidiaries), or compromise, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements Company in the ordinary course of business that involve only consistent with past practice so long as the payment amount of money damages not in excess of $500,000 individually or $2,000,000 salaries, wages, bonuses and benefits provided to such new employees shall be in the aggregate, in any case without the imposition ordinary course of any equitable relief on, or the admission of wrongdoing by, Pivotal or any of its Subsidiariesbusiness consistent with past practice;
(mvii) make, change its or revoke any material Tax election, change any material method of Tax accounting, enter into any closing agreement, settle or compromise any material liability for Taxes, file any material amended Tax Return, or surrender any claim for a material refund of Taxes;
(viii) make any material changes in financial or Tax accounting methods, principles or practicespractices (or change an annual accounting period), except insofar as may have been be required by a change in GAAP or applicable Law;
(nix) settle make any changes or compromise modifications to any pricing policy or investment policy or any method of doing business except for changes to product prices in accordance with past practice;
(x) make any change or modification to the Privacy Policy, except such changes or modifications required by credit card issuers used by the Company and its Subsidiaries;
(xi) (A) amend the Company Charter Documents or other comparable charter or organizational documents of any of the Company's Subsidiaries or (B) create any new Subsidiaries;
(xii) enter into, materially modify, terminate, or waive any material liability for Taxes right under any Contract that is or surrender would be a Material Contract (except with respect to any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than store Lease in the ordinary course of business business), if it had been entered into prior to the date of this Agreement;
(xiii) enter into, materially modify, terminate, or waive any material right under any Contract (other than (A) a Material Contract, which shall be governed by clause (xii) above, and on (B) a basis consistent with past practice store Lease entered into in the ordinary course of business) that would materially has a term of two years or more and adversely affect that involves the payment of $100,000 or more per year by or to the Company or any of its Tax liabilitySubsidiaries; consent or
(xiv) authorize any of or commit, resolve, propose or agree to take any extension or waiver of the limitation foregoing actions.
(b) Parent and Merger Sub agree that, during the period from the date of this Agreement until the Effective Time, Parent and Merger Sub shall not, and shall not permit any of their Subsidiaries to take, or agree or commit to take, any action that could reasonably be expected to (i) impose any meaningful delay in the obtaining of, or significantly increase the risk of not obtaining, any authorizations, consents, orders, declarations or approvals of any Governmental Authority necessary to consummate the Transactions or the expiration or termination of any applicable waiting period, (ii) significantly increase the risk of any Governmental Authority entering an order or Restraint prohibiting or impeding the consummation of the Transactions or (iii) otherwise would reasonably be expected to cause a meaningful delay or impediment to the consummation of the Transactions (each, a "Delay"). Without limiting the generality of the foregoing, Parent and Merger Sub agree that, during the period from the date of this Agreement until the Effective Time, Parent and Merger Sub shall not, and shall not permit any claim of their Subsidiaries to, acquire or assessment in respect agree to acquire by merging or consolidating with, or by purchasing a substantial portion of the assets of or equity in, or by any other manner, any Person or portion thereof, or otherwise acquire or agree to acquire any assets or rights, if the entering into of a material amount definitive agreement relating to or the consummation of Taxes; grant any power of attorney with respect such acquisition, merger or consolidation would reasonably be expected to material Taxes; enter into any Tax Sharing Agreement or any closing agreement or other similar agreement; or change any method of accounting for Tax purposes;result in a Delay.
Appears in 1 contract
Conduct of Business. During the period from From the date of this Agreement through the earlier of the Closing or valid termination of this Agreement pursuant to Article X (the Effective Time“Interim Period”), except as consented to in writing in advance by VMware or as otherwise expressly required or prohibited (including by the restrictions set forth in subclauses (a) through (r) below) by this Agreement, Pivotal Company shall, and shall cause each of its Subsidiaries to, carry on its except as otherwise explicitly contemplated by this Agreement or the Ancillary Agreements or required by Law or as consented to by Acquiror in writing (which consent shall not be unreasonably conditioned, withheld, delayed or denied), use reasonable best efforts to operate the business of the Company in the ordinary course, including its development and sales efforts as currently contemplated, and use commercially reasonable efforts to (i) preserve intact its business organization, assets, rights and properties, (ii) keep available the services of its current officers, employees and consultants and (iii) preserve its goodwill and its relationships course consistent with customers, suppliers, licensors, licensees, distributors and others having material business dealings with itpast practices. In addition to and without Without limiting the generality of the foregoing, during the period from the date of this Agreement to the Effective Time, except (x) as set forth in section 5.1 on Section 6.1 of the Pivotal Company Disclosure LetterLetter or as consented to by Acquiror in writing (which consent shall not be unreasonably conditioned, (ywithheld, delayed or denied) the Company shall not, and the Company shall cause its Subsidiaries not to, except as specifically required otherwise contemplated by this Agreement or (z) as specifically the Ancillary Agreements or required by applicable Law, Pivotal shall not, and shall not permit any of its Subsidiaries, without VMware’s prior written consent (which consent, in the cases of the matters set forth in subclauses (e), (g), (i), (j) or (k) below shall not be unreasonably withheld, conditioned or delayed, and in all other cases shall be in VMware’s sole discretion), to:
(a) change or amend the Governing Documents of the Company (iother than as contemplated by the Restated Company Certificate);
(b) declare, set aside make or pay declare any dividends on, dividend or distribution to the stockholders of the Company or make any other distributions (whether in cash, stock or property) in respect of, of any of its capital stock the Company Capital Stock or other equity interests;
(c) split, except for dividends by combine, reclassify, recapitalize or otherwise amend any terms of any shares or series of the Company Capital Stock or equity interests in a wholly owned Subsidiary manner that would increase the Aggregate Merger Consideration payable to the stockholders of Pivotal to Pivotal or any other wholly owned Subsidiary of Pivotal, the Company;
(iid) purchase, repurchase, redeem or otherwise acquire any issued and outstanding share capital, outstanding shares of capital stock stock, membership interests or other equity interests of Pivotal or its Subsidiaries or the Company, except for (i) the acquisition by the Company of any optionsshares of capital stock, warrants, or rights to acquire any such shares membership interests or other equity interests of the Company or of any Company Options or Company Restricted Stock Unit Awards in connection with the repurchase, forfeiture or cancellation of such interests, other than Company Options, and Company Restricted Stock Unit Awards; (Aii) the acquisition by the Company of shares of Company Common Stock in connection with the surrender of shares of Company Common Stock by holders of Company Options in order to pay the exercise price of the Company Options; and (iii) the withholding of Class A Shares shares of Company Common Stock to satisfy tax Tax obligations with respect to awards granted pursuant to the Pivotal Company Options and Company Restricted Stock Plans and outstanding on the date of this Agreement Unit Awards;
(e) enter into, modify in any material respect or as permitted by this Agreement, terminate (other than expiration in accordance with their terms its terms) any Contract of a type required to be listed on Section 4.12(a) of the date Company Disclosure Letter, or any Real Property Lease or FCC or NOAA Licenses, in each case, other than in the ordinary course of this Agreement and (B) the acquisition business, as required by Pivotal of Pivotal Options or Pivotal RSUs on the date of this Agreement Law or as expressly permitted by under this Agreement in connection with the forfeiture of such awards, in accordance with their terms on the date of this Agreement, or (iii) split, combine, reclassify or otherwise amend the terms of any of its capital stock or other equity 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 other equity interestsSection 6.1;
(bf) issue, deliver, sell, grantassign, transfer, license, sublicense, convey, lease, covenant not to assert, pledge or otherwise encumber or subject to any Lien Lien, abandon, cancel, let lapse, or otherwise dispose of any material tangible assets or properties of the Company or its Subsidiaries, except for (i) the sale of inventory in the ordinary course of business consistent with past practice; (ii) dispositions of obsolete or worthless equipment; (iii) transactions among the Company and its Subsidiaries or among its Subsidiaries; and (iv) transactions in the ordinary course of business;
(g) acquire any ownership interest in any real property;
(h) except as otherwise required by Law, existing Company Benefit Plans or the Contracts listed on Section 4.12(a) of the Company Disclosure Letter, (i) grant any severance, retention, change in control or termination or similar payment, other than transfer restrictions in the ordinary course of general applicability business consistent with past practice; (ii) terminate, adopt, enter into or materially amend or grant any new non-equity-based awards under any Company Benefit Plan or any plan, policy, practice, program, agreement or other arrangement that would be deemed a Company Benefit Plan if in effect as may be provided of the date of this Agreement, other than in the ordinary course of business consistent with past practice; (iii) increase the cash compensation or bonus opportunity of any employee, officer, director or other individual service provider, except such increases to any such individuals who are not directors or officers of the Company or its Subsidiaries in the ordinary course of business consistent with past practice; (iv) take any action to amend or waive any performance or vesting criteria or to accelerate the time of payment or vesting of any compensation or benefit payable by the Company or any of the Company’s Subsidiaries; (v) hire or engage any new employee or individual independent contractor if such new employee or individual independent contractor will receive annual base compensation in excess of $350,000, other than in the ordinary course of business consistent with past practice; or (vi) terminate the employment or engagement other than for cause, death or disability, of any employee with a title of senior vice president or above;
(i) acquire by merger or consolidation with, or merge or consolidate with, or purchase substantially all or a material portion of the assets of, any corporation, partnership, association, joint venture or other business organization or division thereof;
(j) incur, create, assume, refinance, guarantee or otherwise become liable for (whether directly, contingently or otherwise) any Indebtedness in excess of $20,000,000, other than in connection with borrowings, extensions of credit and other financial accommodations under the Securities Act or Company’s existing credit facilities, notes and other applicable securities Laws) any shares of its capital stock or other equity interests or any securities convertible into, exchangeable for or exercisable for any such shares or other equity interests, or any rights, warrants or options to acquire, any such shares or other equity interests, or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive shares of capital stock of VMware on a deferred basis or other rights linked to the value of Class A Shares or Class B Shares, including pursuant to Contracts as in effect on the date hereof (other than the issuance of Class A Shares upon the exercise of Pivotal Options, the settlement of Pivotal RSUs or the exercise of purchase rights under the Pivotal ESPPexisting Indebtedness and, in each case, any refinancings thereof, provided, that, in no event shall any such borrowing, extension of credit or other financial accommodation be subject to any prepayment fee or penalty or similar arrangement or amend, restate or modify in a manner materially adverse to the Company any terms of or any agreement with respect to any such outstanding Indebtedness (when taken as a whole) other than with respect to the Company Note Conversion;
(k) (i) make, change or revoke any material election in respect of Taxes; (ii) amend, modify or otherwise change any filed Tax Return in a manner that are is material to the Company or its Subsidiaries; (iii) adopt or request permission of any taxing authority to change any accounting method in respect of material Taxes; (iv) enter into any closing agreement in respect of material Taxes executed on or prior to the Closing Date or enter into any Tax sharing or similar agreement (other than customary commercial Contracts entered into in the ordinary course of business not primarily related to Taxes); (v) settle or compromise any claim or assessment in respect of material Taxes; (vi) surrender or allow to expire any right to claim a refund of material Taxes; (vii) file any Tax Return of the Company or its Subsidiaries in a manner that is inconsistent with the past practices of the Company; or (viii) consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of material Taxes or in respect to any material Tax attribute that would give rise to any claim or assessment of Taxes;
(l) take any action, or knowingly fail to take any action, where such action or failure to act would reasonably be expected to prevent the Mergers from qualifying for the Intended Tax Treatment;
(m) authorize for issuance, issue, sell, transfer, encumber, dispose or deliver any additional shares of Company Capital Stock or securities exercisable or exchangeable for or convertible into Company Capital Stock or grant any additional equity or equity-based compensation other than (i) upon the exercise or settlement of Company Options or Company Restricted Stock Unit Awards under the Company Incentive Plans and applicable award agreement outstanding on the date of this Agreement and Made Available to VMware and otherwise in accordance with their terms as in effect as of the date of this Agreement; (ii) as required to comply with any Company Benefit Plan as in effect on such date)the date of this Agreement; (iii) upon the exercise of any Company Warrant and (iv) upon the Company Note Conversion;
(cn) amend adopt a plan of, or otherwise change, or authorize or propose to amend or otherwise change, its certificate of incorporation or bylaws (or similar organizational documents);
(d) directly or indirectly acquire or agree to acquire (i) by merging or consolidating with, purchasing a substantial equity interest in or a substantial portion of the assets of, making an investment in or loan or capital contribution to or in any other manner, any corporation, partnership, association or other business organization or division thereof or (ii) any assets that are otherwise material to Pivotal and its Subsidiaries, except, in each case, for (1) capital expenditures which shall be subject to the limitations of clause (i) below and (2) purchases of marketable securities by or on behalf of Pivotal or its Subsidiaries for cash management purposes in the ordinary course of business consistent with Pivotal’s investment management policy, and except in the case of clause (ii), acquisitions of inventory, products or services in the ordinary course of business; Table of Contents
(e) directly or indirectly sell, lease, license, sell and leaseback, abandon, allow to lapse, mortgage or otherwise encumber or subject to any Lien or otherwise dispose in whole or in part of any of its material properties, assets or rights (including any material Pivotal Intellectual Property Registrations) or any interest therein, except, in each case, (i) sales, pledges, dispositions, transfers, abandonments, leases, licenses, lapses, expirations, or encumbrances required to be effected prior to the Effective Time pursuant to existing Contracts that are not material to Pivotal and its Subsidiaries, taken as a whole and (ii) Ordinary Course Licenses Out;
(f) adopt or enter into a plan of or effect a, complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganizationreorganization of the Company or its Subsidiaries (other than the Mergers);
(g) fail to maintain, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Pivotal Intellectual Property Registrations;
(h) (i) incur, create, assume or otherwise become liable for, or repay, cancel, forgive or prepay, any Indebtedness, or amend, modify or refinance any Indebtedness or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, other than Pivotal or any direct or indirect wholly owned Subsidiary of Pivotal;
(i) incur or commit to incur any capital expenditure or authorization or commitment with respect thereto that in the aggregate are in excess of $1,000,000;
(j) except as required by any judgment by a court of competent jurisdiction, (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge or satisfaction in the ordinary course of business, (B) as required by their terms as in effect on the date of this Agreement of claims, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of Pivotal included in the Pivotal SEC Documents filed prior to the date hereof (for amounts not in excess of such reserves) or (C) incurred since the date of such financial statements in the ordinary course of business, (ii) cancel any material Indebtedness owed to Pivotal or any of its Subsidiaries, or (iiio) waive, release, grant settle, compromise or transfer otherwise resolve any right of material value;
(k) (i) materially modifyinquiry, materially amendinvestigation, terminateclaim, cancelAction, waive any material right under litigation or extend any Material Contract (other than renewals of Contracts with customers of Pivotal Products in the ordinary course of business) or (ii) enter into any Contract that if in effect on the date hereof would be a Material ContractLegal Proceedings, other than customer contracts entered into in the ordinary course of business;
(l) commence any Legal Proceeding (other than a Legal Proceeding as a result of a Legal Proceeding commenced against Pivotal or any of its Subsidiaries), or compromise, settle or agree to settle any Legal Proceeding, other than Transaction Litigation which is subject to section 5.7), compromises, settlements or agreements except in the ordinary course of business that or where such waivers, releases, settlements or compromises are covered by insurance or involve only the payment of money monetary damages in an amount less than $1,000,000 in the aggregate;
(p) (A) sell, assign, transfer, license, sublicense, covenant not to assert, pledge, encumber, subject to a Lien (other than a Permitted Lien), or grant to, or agree to grant to, any Person rights in or to any Company IP that is material to the Company and its Subsidiaries, (other than non-exclusive licenses and sublicenses of Company IP granted in the ordinary course of business consistent with past practice), or dispose of, cancel, abandon or permit to lapse any rights to any Company Intellectual Property that is material to the Company and its Subsidiaries, except for the expiration of Company Registered Intellectual Property in accordance with the applicable statutory term, or (B) subject any material Company IP to any Copyleft Licenses;
(q) disclose or agree to disclose to any Person (other than Acquiror or any of its representatives) any material trade secret or any other material confidential information of the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice and pursuant to confidentiality agreements containing obligations to maintain the confidentiality thereof;
(r) make or commit to make capital expenditures other than in an amount not in excess of $500,000 individually or $2,000,000 the amount set forth on Section 6.1(r) of the Company Disclosure Letter, in the aggregate;
(s) manage the Company’s and its Subsidiaries’ working capital in a manner other than in the ordinary course of business consistent with past practice;
(t) enter into or extend any collective bargaining agreement or similar labor agreement, in any case without the imposition of any equitable relief onother than as required by applicable Law, or recognize or certify any labor union, labor organization, or group of employees of the admission Company or its Subsidiaries as the bargaining representative for any employees of wrongdoing by, Pivotal the Company or any of its Subsidiaries;
(mu) terminate without replacement or fail to use reasonable efforts to maintain any License material to the conduct of the business of the Company and its Subsidiaries, taken as a whole;
(v) (i) limit the right of the Company or any of the Company’s Subsidiaries to engage in any line of business or in any geographic area, to develop, market or sell products or services, or to compete with any Person; or (ii) grant any exclusive or similar rights to any Person, in each case, except where such limitation or grant does not, and would not be reasonably likely to, individually or in the aggregate, materially and adversely affect, or materially disrupt the ordinary course operation of the businesses of the Company and its Subsidiaries, taken as a whole;
(w) terminate without replacement or amend in a manner materially detrimental to the Company and its Subsidiaries, taken as a whole, any material insurance policy insuring the business of the Company or any of the Company’s Subsidiaries;
(x) cease conducting, or enter into any new line of business outside of the business currently conducted by the Company and its Subsidiaries as of the date of this Agreement;
(y) make any material change its in financial or Tax accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law;; or
(nz) settle or compromise any material liability for Taxes or surrender any material claim for a refund of Taxes; file any amended Tax Return or claim for Tax refund; make, revoke or modify any material Tax election, or change the entity classification of any Subsidiary for U.S. federal tax purposes; file any Tax Return other than in the ordinary course of business and on a basis consistent with past practice that would materially and adversely affect its Tax liability; consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of a material amount of Taxes; grant any power of attorney with respect to material Taxes; enter into any Tax Sharing Agreement or agreement to do any closing agreement or other similar agreement; or change any method of accounting for Tax purposes;action prohibited under this Section 6.1.
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