CONDUCT OF BUSINESSES PENDING THE MERGER. SECTION 5.01 Conduct of Business by the Company and the Subsidiaries Pending the Merger. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, the Company agrees, and shall cause each Subsidiary (except to the extent that Parent shall otherwise consent in writing), to carry on its business in the usual, regular and ordinary course and in substantially the same manner as previously conducted, to pay its debts and Taxes when due (subject to good faith disputes over such debts or Taxes), to pay or perform other obligations when due and, to the extent consistent with such business, to use all reasonable efforts consistent with past practices and policies to preserve intact its present business organization, keep available the services of its present officers and key employees and consultants and preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others having business dealings with it, to the end that its goodwill and ongoing businesses would be unimpaired at the Effective Time. The Company shall promptly notify Parent of any event or occurrence not in the ordinary course of business of the Company or the Subsidiary. By way of amplification and not limitation, except as specifically contemplated by this Agreement or as specifically set forth in Section 5.01 of the Company Disclosure Schedule, neither the Company nor the Subsidiary shall, between the date of this Agreement and the Effective Time, directly or indirectly, do, or propose to do, any of the following without the prior written consent of Parent (it is hereby agreed by Parent that following an email request for consent by the Company, consent via email from Parent’s General Counsel or Chief Financial Officer to the Company shall be deemed written consent for purposes of this Section 5.01):
Appears in 1 contract
Samples: Merger Agreement (DemandTec, Inc.)
CONDUCT OF BUSINESSES PENDING THE MERGER. SECTION 5.01 Conduct of Business by the Company and the Subsidiaries Pending the Merger. During the period from The Company agrees that, between the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, except as set forth in Section 5.01 of the Company agreesDisclosure Schedule or as specifically contemplated by any other provision of this Agreement, and shall cause each Subsidiary (except to the extent that Parent unless Buyer shall otherwise consent in writing), which consent shall not be unreasonably withheld (provided, that for purposes of this Section 5.01 only, any assessment as to carry on its business in the usualunreasonableness of any decision of Buyer to withhold consent shall be made with reference to the perspective of a similarly-situated buyer):
(a) the businesses of the Company and the Company Subsidiaries shall be conducted only in, regular and the Company and the Company Subsidiaries shall not take any action except in, the ordinary course of business and in substantially the same a manner as previously conducted, to pay its debts and Taxes when due (subject to good faith disputes over such debts or Taxes), to pay or perform other obligations when due and, to the extent consistent with such business, to use all reasonable efforts consistent with past practices and policies practice; and
(b) the Company shall use all commercially reasonable efforts to preserve substantially intact its present business organization, to keep available the services of its present officers and key the current officers, employees and consultants of the Company and the Company Subsidiaries and to preserve its the current relationships of the Company and the Company Subsidiaries with customers, students, suppliers, distributors, licensors, licensees, licensees and others having business dealings other Persons with it, to the end that its goodwill and ongoing businesses would be unimpaired at the Effective Time. The Company shall promptly notify Parent of any event or occurrence not in the ordinary course of business of which the Company or the Subsidiaryany Company Subsidiary has significant business relations. By way of amplification and not limitation, except (x) as specifically contemplated by this Agreement Agreement, (y) for transfers of cash among the Company and the Company Subsidiaries pursuant to the Company's existing cash management policies or (z) as specifically set forth in Section 5.01 of the Company Disclosure Schedule, neither the Company nor the any Company Subsidiary shall, between the date of this Agreement and the Effective Time, directly or indirectly, do, or propose to do, any of the following without the prior written consent of Parent Buyer which consent shall not be unreasonably withheld (it is hereby agreed by Parent provided, that following an email request for consent by the Company, consent via email from Parent’s General Counsel or Chief Financial Officer to the Company shall be deemed written consent for purposes of this Section 5.015.01 only, any assessment as to the unreasonableness of any decision of Buyer to withhold consent shall be made with reference to the perspective of a similarly-situated buyer):
(i) amend or change its Certificate of Incorporation or By-Laws or equivalent organizational documents;
(ii) transfer, issue, sell, pledge, lease, license, dispose, grant, encumber, or authorize for transfer, issuance, sale, pledge, lease, license, disposition, grant or encumbrance (whether to a third party or any Affiliate) any shares of its stock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of such stock, or any other ownership interest (including, without limitation, any phantom interest), of the Company or any Company Subsidiary (except (a) for the issuance of shares of Company Common Stock pursuant to the Company Stock Options or Company Warrants outstanding on the date of this Agreement, or (b) the conversion of shares of Company Preferred Stock into Company Common Stock in accordance with the terms of the Company Charter);
(iii) except with respect to trademarks in the ordinary course of business and consistent with past practice, (a) grant any license in respect of any Intellectual Property of the Company or any Company Subsidiary, (b) develop any Intellectual Property jointly with any third party, or (c) disclose any confidential Intellectual Property of the Company or any Company Subsidiary other than in the ordinary course of business and consistent with past practice unless such Intellectual Property is subject to a confidentiality agreement protecting against any further disclosure;
(iv) authorize, declare or set aside any dividend payment or other distribution, payable in cash, stock, property or otherwise, with respect to any of its stock other than the payment of dividends required to be paid to holders of Company Preferred Stock;
(v) reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its stock or issue or authorize the issuance of any other securities in respect of, or in lieu of or in substitution for shares of its capital stock;
(vi) acquire or agree to acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets) any interest in any corporation, partnership, other business organization or any division thereof or any assets thereof for a purchase price in excess of $250,000;
(vii) incur any additional indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse the obligations of any Person (other than its subsidiaries consistent with past practice), or make any loans or advances to any Person (other than its subsidiaries and employees consistent with past practice (provided that such loans or advances to employees do not exceed $50,000 in the aggregate)), except for indebtedness under the Company's existing Loan and Security Agreement dated as of March 9, 1999 between the Company, the Company Subsidiaries, Fleet National Bank (in its capacity as Agent) and the other financial institutions signatory thereto, as amended and in effect, incurred in the ordinary course of business and consistent with past practice and for other indebtedness with a maturity of not more than one year in a principal amount not, in the aggregate, in excess of $150,000;
(viii) enter into any contract or agreement requiring the payment, or receipt of payment, of consideration in excess of $100,000 individually or $500,000 in the aggregate, or modify, amend, renew, waive any material provision of, or terminate any existing Company Material Contract, other than in the ordinary course of business consistent with past practice;
(ix) make or authorize any capital expenditures, other than as set forth in Section 5.01(ix) of the Company Disclosure Schedule;
(x) waive any stock repurchase or acceleration rights, amend or change the terms of any options, warrants, or restricted stock, or reprice options granted under any Company Option Plan or warrants or, except pursuant to the terms of Company Options or Company Warrants outstanding as of the date hereof with respect to fractional shares, authorize cash payments in exchange for any options granted under any Company Option Plans, any Scheduled Options, or Company Warrants;
(xi) (a) increase the compensation payable or to become payable to the Company's or any Company Subsidiary's officers or employees, except for increases in salaries or wages accordance with past practices and consistent with current budgets, as disclosed in Section 5.01(xi) of the Company Disclosure Schedule, (b) grant or amend any rights to severance or termination pay to, or enter into or amend any employment or severance agreement with, any director, officer or other employee of the Company or any Company Subsidiary (other than the entering into of employment agreements with new employees of the Company (other than new officers or directors) in accordance with the Company's past practice and existing policies) or (c) forgive any indebtedness of any employee of the Company or any Company Subsidiary;
(xii) pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) in excess of $300,000 in the aggregate (not including any amounts covered by insurance not resulting in an increase in the premium under such insurance), other than the payment, discharge or satisfaction, in the ordinary course of business consistent with past practice, or cancel any indebtedness in excess of $50,000 in the aggregate or waive any claims or rights of substantial value, or waive the 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;
(xiii) make or revoke any Tax elections, adopt or change any method of Tax accounting, request any ruling or similar determination, enter into any closing agreement or settle any Tax liabilities or take any action (including communications with a Governmental Entity) with respect to the computation of Taxes or the preparation of a Tax Return that is inconsistent with past practice;
(xiv) take any action, other than as required by U.S. GAAP or by the SEC, with respect to accounting principles or procedures, including, without limitation, any revaluation of assets;
(xv) establish, adopt, enter into or amend any collective bargaining agreement or Employee Benefit Plan other than in the ordinary course of business consistent with prior practice and except as would not result in any material increase in the amounts payable by the Company or any Company Subsidiary thereunder, or make any material determinations not in the ordinary course of business consistent with prior practice, under any collective bargaining agreement or Employee Benefit Plan; or
(xvi) agree in writing or otherwise to take any of the actions described in clauses (i) through (xv) above.
Appears in 1 contract
CONDUCT OF BUSINESSES PENDING THE MERGER. SECTION 5.01 Conduct of Business by the Company and the Subsidiaries Pending the Merger. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, the Company agrees, and shall cause each Subsidiary (except to the extent that Parent shall otherwise consent in writing)writing (which consent shall not be unreasonably withheld, to conditioned or delayed) or as otherwise expressly permitted or authorized by this Agreement, the Company shall, and shall cause each Subsidiary to, carry on its business in the usual, regular and ordinary course and in compliance with all applicable Laws and in substantially the same manner as previously conducted, to pay its debts and Taxes when due (subject to good faith disputes over such debts or Taxes), to pay or perform other obligations when due and, to the extent consistent with such business, to use all commercially reasonable efforts consistent with past practices and policies to preserve intact its present business organization, keep available the services of its present officers and key employees and consultants and preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others having business dealings with it, to the end that its goodwill and ongoing businesses would be unimpaired at the Effective Time. The Company shall use commercially reasonable efforts to promptly notify Parent of any material event or occurrence not in the ordinary course of business of the Company or any Subsidiary of which it becomes aware. The parties hereto understand and acknowledge that it is their intent to work closely together during the Subsidiarytime period from the date hereof until the Effective Time. If Company becomes aware of a material deterioration in the relationship with any significant customer, key advertiser, key supplier or key employee or significant number of other employees of Company, it will promptly bring such information to the attention of Parent in writing. By way of amplification and not limitation, except as specifically contemplated by this Agreement or as specifically set forth in Section 5.01 of the Company Disclosure Schedule, neither the Company nor the shall not, and shall not permit any Subsidiary shallto, between the date of this Agreement and the Effective Time, directly or indirectly, authorize, do, or propose to do, any of the following without the prior written consent of Parent (it is hereby agreed which consent shall not be unreasonably withheld, conditioned or delayed):
(a) amend or otherwise change its Certificate of Incorporation or Bylaws or equivalent organizational documents;
(b) issue, sell, pledge, dispose of, grant, encumber, authorize or propose the issuance, sale, pledge, disposition, grant or encumbrance of any shares of its capital stock of any class, or any options, warrants, convertible securities or other rights of any kind to issue, deliver, sell or cause to be issued delivered or sold, any shares of such capital stock or any other ownership interest (including, without limitation, any phantom interest), of the Company or any Subsidiary, except pursuant to the terms of options, warrants or preferred stock outstanding on the date of this Agreement;
(c) sell, lease, license, pledge, grant, encumber (other than Permitted Liens) or otherwise dispose of any of its properties or assets which are material, individually or in the aggregate, to its business outside of the ordinary course of business;
(d) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock;
(e) split, combine, subdivide, redeem or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, or purchase or otherwise acquire (or grant any rights to have purchased or otherwise acquired), directly or indirectly, any shares of its capital stock or any options, warrants, convertible securities or other rights of any kind, except from former employees, directors and consultants in accordance with agreements providing for the repurchase of shares in connection with any termination of service by Parent such party;
(f) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets) any interest or any assets in any corporation, partnership, other business organization or any division thereof;
(g) institute or settle any Legal Proceeding;
(h) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advances;
(i) authorize any capital expenditure in excess of $25,000 in the aggregate;
(j) enter into any lease or contract for the purchase or sale of any real property or material personal property;
(k) waive or release any material right or claim;
(l) increase, or agree to increase, the compensation or benefits payable, or to become payable, to its officers or employees or grant any severance or termination pay to, or enter into any employment or severance agreement with, any of its directors, officers or other employees, or establish, adopt, enter into or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other Plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee; provided, however, that following an email request the foregoing provisions of this subsection shall not apply to any amendments to employee benefit plans described in Section 3(3) of ERISA that may be required by Law or that are contemplated or provided for consent by this Agreement;
(m) accelerate, amend or change the period of exercisability or the vesting schedule of restricted stock or Company Options granted under any option plan, employee stock plan or other agreement or authorize cash payments in exchange for any Company Options granted under any of such plans except as specifically required by the terms of such plans or any such agreement or any related agreement in effect as of the date of this Agreement and disclosed in the Company Disclosure Schedule;
(n) extend any offers of employment to potential employees, consultants or independent contractors or terminate any existing employment relationships;
(o) amend or terminate any Material Contract or enter into, amend or terminate any contract that would be a Material Contract;
(p) enter into, amend or terminate any contract, agreement, commitment or arrangement that, if fully performed, would not be permitted under this Section 5.01;
(q) other than in the ordinary course of business consistent with past practice, enter into any licensing, distribution, OEM agreements, sponsorship, advertising, merchant program or other similar contracts, agreements or obligations that may not be cancelled without penalties by the Company upon notice of thirty (30) days or less;
(r) enter into any contract or agreement outside the ordinary course of business that is material to the business, results of operations or financial condition of the Company;
(s) other than paying the Company Transaction Expenses or any Debt, consent via email from Parent’s General Counsel pay, discharge or Chief Financial Officer satisfy any material claim, liability or obligation (absolute, accrued, asserted, unasserted, contingent or otherwise) other than in the ordinary course of business and consistent with past practices;
(t) take any action resulting in a material change, with respect to accounting policies, principles or procedures, including for the avoidance of doubt as related to accounts payable, accounts receivable and the recognition of deferred revenue;
(u) make or change any Tax or accounting election, change any annual accounting period, adopt or change any accounting method, file any amended Tax Return, enter into any closing agreement, settle any Tax claim or assessment relating to the Company shall or any Subsidiary, surrender any right to claim refund of Taxes, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any Subsidiary, or take any other action outside the ordinary course of business that would have the effect of increasing the Tax liability of the Company or any Subsidiary or Parent;
(v) other than in the ordinary course of business, (i) sell, assign, lease, terminate, abandon, transfer, permit to be deemed written consent for purposes encumbered (other than Permitted Liens) or otherwise dispose of or grant any security interest in and to any item of the Company Intellectual Property, in whole or in part, (ii) grant any license with respect to any Company Intellectual Property, other than non-exclusive licenses granted to customers of the Company or any Subsidiary, or (iii) disclose, or allow to be disclosed, any confidential Company Intellectual Property, unless such Company Intellectual Property is subject to a confidentiality or non-disclosure covenant protecting against disclosure thereof;
(w) enter into any agreement to develop, create or invent any Intellectual Property jointly with any third party;
(x) revalue any of its assets, including writing down the value of inventory or writing off notes or accounts receivable;
(y) fail to maintain its equipment and other assets in good working condition and repair according to the standards it has maintained up to the date of this Section 5.01):Agreement, subject only to ordinary wear and tear;
(z) take any action that would cause there to be a Company Material Adverse Effect;
(aa) permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to Parent;
(bb) except as required by U.S. GAAP, write off as uncollectible, or establish any extraordinary reserve with respect to, any account receivable or other indebtedness in excess of $10,000 with respect to a single matter, or in excess of $25,000 in the aggregate; or
(cc) take, or agree in writing or otherwise to take, authorize the entrance into, or enter into any contract or agreement to do any of the actions described in subsections (a) through (bb) above.
Appears in 1 contract
CONDUCT OF BUSINESSES PENDING THE MERGER. SECTION 5.01 Section 5.1 Conduct of Business by in the Company Ordinary Course. Each of Videonics and the Subsidiaries Pending the Merger. During the period from Focus covenants and agrees that, except as otherwise provided for herein, between the date of this Agreement hereof and continuing until the earlier of the termination of this Agreement or the Effective Time, unless the Company agrees, and shall cause each Subsidiary (except to Chairman of the extent that Parent Board of Directors of the other shall otherwise consent in writing), to carry on the business of such Party and its business in Subsidiaries shall be conducted only in, and such entities shall not take any action except in, the usual, regular and ordinary course of business and in substantially the same a manner as previously conducted, to pay its debts and Taxes when due (subject to good faith disputes over such debts or Taxes), to pay or perform other obligations when due and, to the extent consistent with such business, to use all reasonable efforts consistent with past practices practice; and policies each of Videonics and Focus and its Subsidiaries will use their commercially reasonable efforts to preserve substantially intact its present their business organizationorganizations, to keep available the services of its those of their present officers and key officers, employees and consultants who are integral to the operation of their businesses as presently conducted, to maintain in effect all Material Agreements and to preserve its their present relationships with customers, suppliers, distributors, licensors, licensees, significant customers and others having suppliers and with other persons with whom they have significant business dealings with it, to the end that its goodwill and ongoing businesses would be unimpaired at the Effective Time. The Company shall promptly notify Parent of any event or occurrence not in the ordinary course of business of the Company or the Subsidiaryrelations. By way of amplification and not limitation, except as specifically expressly contemplated by this Agreement or as specifically set forth Agreement, each of Videonics and Focus agrees on behalf of itself and, in Section 5.01 the case of the Company Disclosure ScheduleFocus, neither the Company nor the Subsidiary shallits Subsidiaries, that they will not, between the date of this Agreement hereof and the Effective Time, directly or indirectly, do, or propose to do, do any of the following without the prior written consent of Parent (it is hereby agreed by Parent that following an email request for consent by the Companyother, consent via email from Parent’s General Counsel or Chief Financial Officer to as set forth in the Company shall be deemed written consent for purposes first sentence of this Section 5.01):5.1:
(i) except for (A) the issuance of shares of Videonics Common Stock and Focus Common Stock in order to satisfy obligations under the Videonics Plans and Focus Plans in effect on the date hereof and Focus Equity Rights or Videonics Equity Rights issued thereunder and under existing dividend reinvestment plans, which issuances shall be consistent with its existing policy and past practice; (B) grants of stock options with respect to Videonics Common Stock or Focus Common Stock to employees in the ordinary course of business and in amounts and in a manner consistent with past practice; and (C), in the case of Focus, (1) the issuance of up to 2,500,000 shares of Focus Common Stock pursuant to a shelf registration on Form S-1, (2) the posting of Focus Common Stock held in treasury as collateral for the a judgment adverse to Focus in the matter of CRA Systems, Inc. v. Focus Enhancements, Inc. or (3) payment of some or all of Union Atlantic LC's fee for providing investment banking services to Focus in connection with this transaction by the issuance to Union Atlantic of shares of Focus Common Stock in accordance with the agreement attached as Schedule A hereto, issue, sell, pledge, dispose of, encumber, authorize, or propose the issuance, sale, pledge, disposition, encumbrance or authorization of any shares of capital stock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of capital stock of, or any other ownership interest in, such Party or any of its Subsidiaries; (ii) amend or propose to amend the Certificate or Articles of Incorporation, as the case may be, or bylaws of such Party (other than the increase in the authorized capital of Focus contemplated herein) or any of its Subsidiaries or adopt, amend or propose to amend any shareholder rights plan or related rights agreement; (iii) split, combine or reclassify any outstanding shares of Videonics Common Stock or Focus Common Stock, or declare, set aside or pay any dividend or distribution payable in cash, stock, property or otherwise with respect to shares of Videonics Common Stock or Focus Common Stock, except for cash dividends to shareholders of Videonics and Focus declared in accordance with existing dividend policy payable to shareholders of record on the record dates consistently used in prior periods; (iv) redeem, purchase or otherwise acquire or offer to redeem, purchase or otherwise acquire any shares of its capital stock, or (v) authorize or propose or enter into any contract, agreement, commitment or arrangement with respect to any of the matters prohibited by this Section 5.1(a).
(i) acquire (by merger, consolidation, or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof or make any investment in another entity (other than an entity which is a wholly owned Subsidiary of such Party as of the date hereof and other than incorporation of a wholly owned Subsidiary); (ii) except in the ordinary course of business and in a manner consistent with past practice and except for the sub-lease by Focus of its Wilmington facility, sell, pledge, dispose of, or encumber or authorize or propose the sale, pledge, disposition or encumbrance of any assets of such Party or any of its Subsidiaries, except for transactions which do not exceed $100,000 in the aggregate in any 12-month period, no Party shall make any dispositions in excess of an aggregate of $100,000; or (iii) authorize, enter into or amend any contract, agreement, commitment or arrangement with respect to any of the matters prohibited by this Section 5.1(b);
(c) sell, transfer, lease, license, sublicense, mortgage, pledge, dispose of, encumber, grant or otherwise dispose of any Intellectual Property rights, or amend or modify in any material way any existing agreements with respect to any Intellectual Property rights;
(d) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee (other than guarantees by Focus of bank debt of its Subsidiaries entered into in the ordinary course of business) or endorse or otherwise as an accommodation become responsible for, the obligations of any Person, or make any loans, advances or enter into any financial commitments, except in the ordinary course of business consistent with past practice and as otherwise permitted under any loan or credit agreement to which it is a party; authorize any capital expenditures which are, in the aggregate, in excess of $100,000 for it and, in the case of Focus, its Subsidiaries taken as a whole; or enter into or amend in any material respect any contract, agreement, commitment or arrangement with respect to any of the matters set forth in this Section 5.1(d);
(e) hire or terminate any employee or consultant, except in the ordinary course of business consistent with past practice; increase the compensation (including, without limitation, bonus) payable or to become payable to its officers or employees, except for retention agreements entered into in anticipation of the Merger and except for previously disclosed officers salary increases, increases in salary or wages of employees who are not officers of it or, in the case of Focus, its Subsidiaries in the ordinary course of business consistent with past practices, or grant any severance or termination pay or stock options to, or enter into any employment or severance agreement with any director, officer or other employee of it or, in the case of Focus, any of its Subsidiaries, or establish, adopt, enter into or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any current or former directors, officers or employees;
(f) change, any accounting policies or procedures (including procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable) unless required by statutory accounting principles or GAAP;
(g) create, incur, suffer to exist or assume any Encumbrance on any material assets of it or, in the case of Focus, its Subsidiaries;
(h) other than in the ordinary course of business consistent with past practice, (A) enter into any Material Agreement, (B) modify, amend or transfer in any material respect or terminate any Material Agreement to which it or, in the case of Focus, any of its Subsidiaries is a party or waive, release or assign any material rights or claims thereto or thereunder or (C) enter into or extend any lease with respect to real property with any third party;
(i) make any Tax election or settle or compromise any federal, state, local or foreign income tax liability or agree to an extension of a statute of limitations;
(j) settle any material litigation or waive, assign or release any material rights or claims except, in the case of litigation, any litigation which settlement would not (A) impose either material restrictions on the conduct of the business of it or, in the case of Focus, any of its Subsidiaries or (B) for any individual litigation item settled, exceed $100,000 in cost or value to it or, in the case of Focus, any of its Subsidiaries. Neither Videonics, Focus or any Focus Subsidiaries shall pay, discharge or satisfy any liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), except in the ordinary course of business consistent with past practice in an amount or value not exceeding $50,000 in any instance or series of related instances or $100,000 in the aggregate or in accordance with their terms as in effect as of the date hereof;
(k) engage in any transaction, or enter into any agreement, arrangement, or understanding with, directly or indirectly, any related party, other than those existing as of the date hereof which are listed in the Disclosure Schedule of such party;
(l) maintain in full force and effect all insurance, as the case may be, currently in effect; and
(m) take any action which it believes when taken could reasonably be expected to adversely affect or delay in any material respect the ability of any of the Parties to obtain any approval of any Governmental Authority required to consummate the transactions contemplated hereby;
(n) other than pursuant to this Agreement, take any action to cause the shares of their respective Common Stock to cease to be quoted on any of the stock exchanges on which such shares are now quoted;
(o) take any action which it believes when taken would cause its representations and warranties contained herein to become inaccurate in any material respect.
Appears in 1 contract
CONDUCT OF BUSINESSES PENDING THE MERGER. SECTION 5.01 Conduct of Business by the Company and the Subsidiaries Pending the Merger. During Except as set forth in Section 5.01 of the Company Disclosure Schedule, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, the Company agrees, and shall cause each Subsidiary (except to the extent that Parent shall otherwise consent in writing, which consent shall not be unreasonably withheld), to carry on its business business, pay its debts and Taxes, pay or perform its other obligations, all in the its usual, regular and ordinary course and in substantially the same manner as previously conducted, to pay its debts and Taxes when due conducted (subject to good faith disputes over such debts or Taxes), to pay or perform other obligations when due and, to the extent consistent with such business, to use all reasonable efforts consistent with past practices and policies to preserve intact its present business organization, keep available the services of its present officers and key employees and consultants and to preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others having business dealings with it, to the end that its goodwill and ongoing businesses would be unimpaired at the Effective Time. The Company shall promptly notify Parent of any event or occurrence not in the ordinary course of business of the Company or the any Subsidiary. By way of amplification and not limitation, except as specifically contemplated by this Agreement or as specifically set forth in Section 5.01 of the Company Disclosure Schedule, neither the Company nor the any Subsidiary shall, between the date of this Agreement and the Effective Time, directly or indirectly, do, or propose to do, any of the following without the prior written consent of Parent Parent, which consent shall not be unreasonably withheld (it is hereby agreed by Parent that following an email request for consent by the Company, consent via email from Parent’s General Counsel Parent by Xxx Xxxxx, Xxxxxxx Xxxxxxxxx (xxxxxxx.xxxxxxxxx@xxxxxxxxxxx.xxx) or Chief Financial Officer Xxx Xxxxx (xxxxxx.xxxxx@xxxxxxxxxxx.xxx) to the Company or Parent’s failure to respond within five (5) business days shall be deemed written consent for purposes of this Section 5.01, provided that a response within such time period indicating a need for more time or requesting additional information shall not be deemed a “failure to respond” where a similarly situated reasonable acquirer acting in good faith would require such additional time or additional information before consenting):
(a) amend or otherwise change its Certificate of Incorporation or Bylaws or equivalent organizational documents;
(b) issue, sell, pledge, dispose of, grant, encumber, authorize or propose the issuance, sale, pledge, disposition, grant or encumbrance of any shares of its capital stock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of such capital stock or any other ownership interest (including, without limitation, any phantom interest), of the Company or any Subsidiary, except pursuant to the terms of options, warrants or preferred stock outstanding on the date of this Agreement;
(c) sell, lease, exclusively license, pledge, grant, encumber or otherwise dispose of any of its properties or assets which are material, individually or in the aggregate, to its business except in the ordinary course of business consistent with past practice (other than the proposed spin-out of SlingShop, Inc. prior to Closing);
(d) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (other than the proposed spin-out of SlingShop, Inc. prior to Closing);
(e) split, combine, subdivide, redeem or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, or purchase 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 by such party;
(f) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets) any interest or any assets in any corporation, partnership, other business organization or any division thereof;
(g) institute or settle any Legal Proceeding;
(h) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advances;
(i) authorize any capital expenditure not included in the Company’s capital plan on the date hereof in excess of $10,000, individually or in the aggregate;
(j) enter into any lease or contract not in the ordinary course of business for the purchase or sale of any property, real or personal;
(k) waive or release any material right or claim;
(l) (i) increase, or agree to increase, the compensation payable, or to become payable, to its officers or employees, (ii) grant any severance or termination pay to, or enter into any employment or severance agreement with, any of its directors, officers or other employees, or (iii) establish, adopt, enter into or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other Plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee; provided, however, that the foregoing provisions of this subsection shall not apply to any amendments to employee benefit plans described in Section 3(3) of ERISA that may be required by Law;
(m) accelerate, amend or change the period of exercisability or the vesting schedule of restricted stock or Company Options granted under any option plan, employee stock plan or other agreement or authorize cash payments in exchange for any Company Options granted under any of such plans except as specifically required by the terms of such plans or any such agreement or any related agreement in effect as of the date of this Agreement and disclosed in the Company Disclosure Schedule;
(n) other than in the ordinary course of business or in accordance with past practice or in accordance with the Company’s 2011 fiscal plan or with the written consent of Parent, extend any offers of employment to potential employees, consultants or independent contractors or terminate any existing employment relationships, and provided that hiring employees to fill vacancies existing on the date hereof or created thereafter shall be deemed in the ordinary course of business;
(o) amend (in a material manner) or terminate any Material Contract;
(p) enter into, amend or terminate any contract, agreement, commitment or arrangement that, if fully performed, would not be permitted under this Section 5.01;
(q) other than in the ordinary course of business, enter into any licensing, distribution, OEM agreements, sponsorship, merchant program or other similar Contracts, agreements or obligations that may not be cancelled without penalties by the Company upon notice of 30 days or less;
(r) enter into any Contract outside the ordinary course of business;
(s) pay, discharge or satisfy any material claim, liability or obligation (whether absolute, accrued, asserted, unasserted, contingent or otherwise) except pursuant to Contracts requiring the Company to do so or in the ordinary course of business, consistent with past practices;
(t) take any action resulting in a material change with respect to accounting policies, principles, procedures or methods, except as required by U.S. GAAP;
(u) make or change any material Tax or accounting election, change any annual accounting period, adopt or change any accounting method, file any amended Tax Return, enter into any closing agreement, settle any material Tax claim or assessment relating to the Company or any Subsidiary, surrender any right to claim refund of Taxes, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any Subsidiary, or take any other action or omit to take any action that would reasonably be expected to have a Company Material Adverse Effect or a Parent Material Adverse Effect;
(v) (i) specifically sell, assign, terminate, abandon, permit to be encumbered or otherwise dispose of or grant any security interest in and to any item of the Company Intellectual Property, in whole or in part, other than non-exclusive licenses granted to customers of the Company or any Subsidiary in the ordinary course of business, (ii) grant any license with respect to any Company Intellectual Property, other than non-exclusive licenses granted to customers of the Company or any Subsidiary in the ordinary course of business, (iii) enter into any agreement to develop, create or invent any Intellectual Property jointly with any third party other than in the ordinary course of business, or (iv) disclose, or allow to be disclosed, any confidential Company Intellectual Property, unless such Company Intellectual Property is subject to a confidentiality or non-disclosure covenant protecting against disclosure thereof;
(w) revalue any of its assets, including writing down the value of inventory or writing off notes or accounts receivable except as required by U.S. GAAP;
(x) accelerate or delay collection of accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected except in the ordinary course of business, consistent with past practice;
(y) delay or accelerate payment of any account payable or other liability beyond or in advance of its due date or the date when such liability would have been paid, except in the ordinary course of business, consistent with past practice;
(z) fail to maintain its equipment and other assets in good working condition and repair according to the standards it has maintained up to the date of this Agreement, subject only to ordinary wear and tear;
(aa) take any action or fail to take any action that would cause there to be a Company Material Adverse Effect;
(bb) permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to Parent;
(cc) write off as uncollectible, or establish any extraordinary reserve with respect to, any account receivable or other indebtedness in excess of $15,000 with respect to a single matter, or in excess of $75,000 in the aggregate except as required by U.S. GAAP; or
(dd) take, or agree in writing or otherwise to take, any of the actions described in subsections (a) through (aa) above, or any action which is reasonably likely to make any of the Company’s representations or warranties contained in this Agreement untrue or incorrect on the date made (to the extent so limited) or as of the Effective Time. Parent acknowledges and agrees that: (i) nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the operations of Company or Company Subsidiaries prior to the Effective Time, (ii) prior to the Effective Time, Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ respective operations, and (iii) notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 5.01 or elsewhere in this Agreement to the extent the requirement of such consent would, upon advice of Company’s counsel, violate any Law.
Appears in 1 contract
CONDUCT OF BUSINESSES PENDING THE MERGER. SECTION 5.01 Conduct of Business by the Company and the Subsidiaries Pending the Merger. During Except as set forth in Section 5.01 of the Company Disclosure Schedule, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, the Company agrees, and shall cause each Subsidiary (except to the extent that Parent shall otherwise consent in writing, which consent shall not be unreasonably withheld), to carry on its business business, pay its debts and Taxes, pay or perform its other obligations, all in the its usual, regular and ordinary course and in substantially the same manner as previously conducted, to pay its debts and Taxes when due conducted (subject to good faith disputes over such debts or Taxes), to pay or perform other obligations when due and, to the extent consistent with such business, to use all reasonable efforts consistent with past practices and policies to preserve intact its present business organization, keep available the services of its present officers and key employees and consultants and to preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others having business dealings with it, to the end that its goodwill and ongoing businesses would be unimpaired at the Effective Time. The Company shall promptly notify Parent of any event or occurrence not in the ordinary course of business of the Company or the any Subsidiary. By way of amplification and not limitation, except as specifically contemplated by this Agreement or as specifically set forth in Section 5.01 of the Company Disclosure Schedule, neither the Company nor the any Subsidiary shall, between the date of this Agreement and the Effective Time, directly or indirectly, do, or propose to do, any of the following without the prior written consent of Parent Parent, which consent shall not be unreasonably withheld (it is hereby agreed by Parent that following an email request for consent by the Company, consent via email from Parent’s General Counsel Parent by Xxx Xxxxx, Xxxxxxx Xxxxxxxxx (xxxxxxx.xxxxxxxxx@xxxxxxxxxxx.xxx) or Chief Financial Officer Xxx Xxxxx (xxxxxx.xxxxx@xxxxxxxxxxx.xxx) to the Company or Parent’s failure to respond within five (5) business days shall be deemed written consent for purposes of this Section 5.01, provided that a response within such time period indicating a need for more time or requesting additional information shall not be deemed a “failure to respond” where a similarly situated reasonable acquirer acting in good faith would require such additional time or additional information before consenting):
(a) amend or otherwise change its Certificate of Incorporation or Bylaws or equivalent organizational documents;
(b) issue, sell, pledge, dispose of, grant, encumber, authorize or propose the issuance, sale, pledge, disposition, grant or encumbrance of any shares of its capital stock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of such capital stock or any other ownership interest (including, without limitation, any phantom interest), of the Company or any Subsidiary, except pursuant to the terms of options, warrants or preferred stock outstanding on the date of this Agreement;
(c) sell, lease, exclusively license, pledge, grant, encumber or otherwise dispose of any of its properties or assets which are material, individually or in the aggregate, to its business except in the ordinary course of business consistent with past practice (other than the proposed spin-out of SlingShop, Inc. prior to Closing);
(d) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (other than the proposed spin-out of SlingShop, Inc. prior to Closing);
(e) split, combine, subdivide, redeem or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, or purchase 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 by such party;
(f) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets) any interest or any assets in any corporation, partnership, other business organization or any division thereof;
(g) institute or settle any Legal Proceeding;
(h) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advances;
(i) authorize any capital expenditure not included in the Company’s capital plan on the date hereof in excess of $10,000, individually or in the aggregate;
(j) enter into any lease or contract not in the ordinary course of business for the purchase or sale of any property, real or personal;
(k) waive or release any material right or claim;
(l) (i) increase, or agree to increase, the compensation payable, or to become payable, to its officers or employees, (ii) grant any severance or termination pay to, or enter into any employment or severance agreement with, any of its directors, officers or other employees, or (iii) establish, adopt, enter into or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other Plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee; provided, however, that the foregoing provisions of this subsection shall not apply to any amendments to employee benefit plans described in Section 3(3) of ERISA that may be required by Law;
(m) accelerate, amend or change the period of exercisability or the vesting schedule of restricted stock or Company Options granted under any option plan, employee stock plan or other agreement or authorize cash payments in exchange for any Company Options granted under any of such plans except as specifically required by the terms of such plans or any such agreement or any related agreement in effect as of the date of this Agreement and disclosed in the Company Disclosure Schedule;
(n) other than in the ordinary course of business or in accordance with past practice or in accordance with the Company’s 2011 fiscal plan or with the written consent of Parent, extend any offers of employment to potential employees, consultants or independent contractors or terminate any existing employment relationships, and provided that hiring employees to fill vacancies existing on the date hereof or created thereafter shall be deemed in the ordinary course of business;
(o) amend (in a material manner) or terminate any Material Contract;
(p) enter into, amend or terminate any contract, agreement, commitment or arrangement that, if fully performed, would not be permitted under this Section 5.01;
(q) other than in the ordinary course of business, enter into any licensing, distribution, OEM agreements, sponsorship, merchant program or other similar Contracts, agreements or obligations that may not be cancelled without penalties by the Company upon notice of 30 days or less;
(r) enter into any Contract outside the ordinary course of business;
(s) pay, discharge or satisfy any material claim, liability or obligation (whether absolute, accrued, asserted, unasserted, contingent or otherwise) except pursuant to Contracts requiring the Company to do so or in the ordinary course of business, consistent with past practices;
(t) take any action resulting in a material change with respect to accounting policies, principles, procedures or methods, except as required by U.S. GAAP;
(u) make or change any material Tax or accounting election, change any annual accounting period, adopt or change any accounting method, file any amended Tax Return, enter into any closing agreement, settle any material Tax claim or assessment relating to the Company or any Subsidiary, surrender any right to claim refund of Taxes, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any Subsidiary, or take any other action or omit to take any action that would reasonably be expected to have a Company Material Adverse Effect or a Parent Material Adverse Effect;
(i) specifically sell, assign, terminate, abandon, permit to be encumbered or otherwise dispose of or grant any security interest in and to any item of the Company Intellectual Property, in whole or in part, other than non-exclusive licenses granted to customers of the Company or any Subsidiary in the ordinary course of business, (ii) grant any license with respect to any Company Intellectual Property, other than non-exclusive licenses granted to customers of the Company or any Subsidiary in the ordinary course of business, (iii) enter into any agreement to develop, create or invent any Intellectual Property jointly with any third party other than in the ordinary course of business, or (iv) disclose, or allow to be disclosed, any confidential Company Intellectual Property, unless such Company Intellectual Property is subject to a confidentiality or non-disclosure covenant protecting against disclosure thereof;
(w) revalue any of its assets, including writing down the value of inventory or writing off notes or accounts receivable except as required by U.S. GAAP;
(x) accelerate or delay collection of accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected except in the ordinary course of business, consistent with past practice;
(y) delay or accelerate payment of any account payable or other liability beyond or in advance of its due date or the date when such liability would have been paid, except in the ordinary course of business, consistent with past practice;
(z) fail to maintain its equipment and other assets in good working condition and repair according to the standards it has maintained up to the date of this Agreement, subject only to ordinary wear and tear;
(aa) take any action or fail to take any action that would cause there to be a Company Material Adverse Effect;
(bb) permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to Parent;
(cc) write off as uncollectible, or establish any extraordinary reserve with respect to, any account receivable or other indebtedness in excess of $15,000 with respect to a single matter, or in excess of $75,000 in the aggregate except as required by U.S. GAAP; or
(dd) take, or agree in writing or otherwise to take, any of the actions described in subsections (a) through (aa) above, or any action which is reasonably likely to make any of the Company’s representations or warranties contained in this Agreement untrue or incorrect on the date made (to the extent so limited) or as of the Effective Time. Parent acknowledges and agrees that: (i) nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the operations of Company or Company Subsidiaries prior to the Effective Time, (ii) prior to the Effective Time, Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ respective operations, and (iii) notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 5.01 or elsewhere in this Agreement to the extent the requirement of such consent would, upon advice of Company’s counsel, violate any Law.
Appears in 1 contract
Samples: Merger Agreement (Lenco Mobile Inc.)
CONDUCT OF BUSINESSES PENDING THE MERGER. SECTION 5.01 Conduct of Business by (a) Unless the Company and the Subsidiaries Pending the Merger. During other Parties hereto shall otherwise consent in writing (such consent not to be unreasonably withheld, conditioned or delayed), during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement in accordance with Section 7.01 or the Effective TimeClosing (the “Executory Period”), except as expressly contemplated by this Agreement or as set forth on Schedule 4.01 of the Company agrees, and shall cause each Subsidiary (except Inventergy Disclosure Schedule with respect to Inventergy or Schedule 4.01 of the Parent Disclosure Schedule with respect to the extent that Parent, respectively, (i) Inventergy and Parent shall otherwise consent conduct their respective business, in writing), to carry on its business all material respects in the usual, regular and ordinary course and in substantially the same manner of business as previously conducted, contemplated to pay its debts and Taxes when due (subject to good faith disputes over such debts be conducted or Taxes), to pay or perform other obligations when due and, to the extent consistent with such business, to past practice and (ii) Inventergy and Parent shall use all its respective commercially reasonable efforts consistent with past practices and policies the foregoing to preserve intact intact, in all material respects, its present business organization, to keep available the services of its present officers and respective directors, officers, key employees and consultants and preserve its consultants, to maintain, in all material respects, existing relationships with customers, suppliers, distributors, licensors, licenseesall Persons with whom it does significant business, and others having business dealings to preserve the possession, control and condition of its respective assets, all as consistent with itpast practice; provided, however, Inventergy may create one or more wholly-owned subsidiaries during the Executory Period and transfer to such wholly-owned subsidiaries portions of the end that assets held by Inventergy. Without limiting the foregoing, Parent agrees to use its goodwill commercially reasonable efforts to timely file all Parent SEC Reports required to be filed during the Executory Period.
(b) Without limiting the generality of the foregoing clause (a), except (x) as contemplated by the terms of this Agreement (including the proposed Reverse Split (as defined below) and ongoing businesses would be unimpaired at the Effective Time. The Company shall promptly notify Parent Stockholder Dividend (as defined below), the Transition Agreement, or the securities purchase agreement by and among Parent and those certain buyers of any event or occurrence not preferred stock of Parent and warrants to purchase Parent Common Stock dated as of December 17, 2013 (the “Parent SPA”), (y) as such action is in the ordinary course of business consistent with past practice in all material respects or (z) as set forth on Schedule 4.01 of the Company Inventergy Disclosure Schedule with respect to Inventergy or the Subsidiary. By way of amplification and not limitation, except as specifically contemplated by this Agreement or as specifically set forth in Section 5.01 Schedule 4.01 of the Company Parent Disclosure ScheduleSchedule with respect to the Parent, respectively, during the Executory Period, neither the Company Inventergy nor the Subsidiary shallParent will, between the date of this Agreement and the Effective Time, directly or indirectly, do, or propose to do, any of the following without the prior written consent of the other Parties (such consent not to be unreasonably withheld, conditioned or delayed):
(i) amend, waive or otherwise change, in any respect, its respective Certificate of Incorporation, as amended;
(ii) authorize for issuance, issue, grant, sell, pledge, dispose of or propose to issue, grant, sell, pledge or dispose of any of its capital stock or any options, warrants, commitments, subscriptions or rights of any kind to acquire or sell any of its capital stock, or other securities or equity interests, including any securities convertible into or exchangeable for any of its capital stock or equity interest of any class and any other equity-based awards, or engage in any hedging transaction with a third Person with respect to such capital stock or other securities or equity interests;
(iii) split, combine, recapitalize or reclassify any of its equity interests or issue any other securities in respect thereof, or declare, pay or set aside any distribution or other dividend (whether in cash, equity or property or any combination thereof) in respect of its equity interests, or directly or indirectly redeem, purchase or otherwise acquire or offer to acquire any of its capital equity or other securities or equity interests;
(iv) incur, create, assume, prepay or otherwise become liable for any Indebtedness (directly, contingently or otherwise), make a loan or advance to or investment in any third party, or guarantee or endorse any indebtedness, liability or obligation of any Person;
(v) increase the wages, salaries or compensation of any of its employees by more than five percent (5%) or increase bonuses for the foregoing individuals in excess of five percent (5%) other than as contemplated by existing employment agreements or arrangements, or make commitments to advance with respect to bonuses for fiscal year 2013 or 2014, or materially increase other benefits of any of the foregoing individuals, or enter into, establish, materially amend or terminate any Inventergy Benefit Plan or Parent Benefit Plan with, for or in respect of any current consultant, officer, manager director or employee, in each case other than as required by applicable Law or pursuant to the terms of any Inventergy Benefit Plan or Parent Benefit Plan in effect on the date of this Agreement;
(it is hereby agreed vi) make or rescind any material election relating to Taxes, settle any claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to Taxes, file any amended Tax Return or claim for refund, or make any change in its accounting or Tax policies or procedures, in each case except as required by applicable Law or in compliance with GAAP;
(vii) transfer or license to any Person or otherwise extend, materially amend or modify, permit to lapse or fail to preserve any of the Inventergy Intellectual Property or Parent Intellectual Property, other than nonexclusive licenses in the ordinary course of business consistent with past practice, or disclose to any Person who has not entered into a confidentiality agreement any trade secrets;
(viii) terminate or waive or assign any material right under any Inventergy Material Contract or Parent Material Contract (each as would be required to be filed as an exhibit to a Form 10-K) or enter into any contract (A) involving amounts potentially exceeding $100,000 or (B) that following would be an email request for consent Inventergy Material Contract or Parent Material Contract or (C) with a term longer than one year that cannot be terminated without payment of a material penalty and upon notice of 60 days or less;
(ix) fail to maintain its books, accounts and records in all material respects in the ordinary course of business consistent with past practice;
(x) except as contemplated in Section 4.01(a), establish any Subsidiary or enter into any new line of business;
(xi) fail to use commercially reasonable efforts to keep in force insurance policies or replacement or revised policies providing insurance coverage with respect to the assets, operations and activities of Inventergy or Parent in an amount and scope of coverage as are currently in effect;
(xii) revalue any of its material assets or make any change in accounting methods, principles or practices, except in compliance with GAAP and approved by the Companyoutside auditors of Inventergy or Parent, consent via email from as applicable;
(xiii) waive, release, assign, settle or compromise any claim, action or proceeding (including any suit, action, claim, proceeding or investigation relating to this Agreement or the transactions contemplated hereby), other than waivers, releases, assignments, settlements or compromises that involve only the payment of monetary damages (and not the imposition of equitable relief on, or the admission of wrongdoing by, either Inventergy or Parent’s General Counsel ) not in excess of $100,000 individually or Chief in the aggregate, or otherwise pay, discharge or satisfy any claims, liabilities or obligations, unless such amount has been reserved in the Inventergy Financial Officer Statements or Parent Financial Statements, as applicable;
(xiv) close or materially reduce the respective activities of Inventergy or Parent, as applicable, or effect any layoff or other Inventergy-initiated or Parent initiated personnel reduction or change, at any of their respective facilities;
(xv) acquire, including by merger, consolidation, acquisition of stock or assets, or any other form of business combination, any corporation, partnership, limited liability company, other business organization or any division thereof, or any material amount of assets;
(xvi) make capital expenditures in excess of $300,000;
(xvii) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization;
(xviii) voluntarily incur any material liability or obligation (whether absolute, accrued, contingent or otherwise);
(xix) sell, lease, license, transfer, exchange or swap, mortgage or otherwise pledge or encumber (including securitizations), or otherwise dispose of any material portion of its properties, assets or rights;
(xx) enter into any agreement, understanding or arrangement with respect to the Company shall voting of the capital equity of Inventergy and/or Parent or Merger Sub;
(xxi) take any action that would reasonably be deemed written consent for purposes expected to delay or impair the obtaining of any Required Governmental Approval or any Required Contractual Consent to be obtained in connection with this Section 5.01):Agreement;
(xxii) enter into, amend, waive or terminate (other than terminations in accordance with their terms) any transaction with an Affiliate; or
(xxiii) authorize or agree to do any of the foregoing actions.
Appears in 1 contract
CONDUCT OF BUSINESSES PENDING THE MERGER. SECTION 5.01 5.01. Conduct of Business by the Company and the Subsidiaries Pending the Merger. During the period from The Company agrees that, between the date of this Agreement and continuing until the earlier to occur of the Effective Time and the termination of this Agreement or the Effective TimeAgreement, except as set forth in Section 5.01 of the Company agreesDisclosure Schedule or as contemplated by any other provision of this Agreement, and shall cause each Subsidiary (except to the extent that unless Parent shall otherwise consent in writing), to carry on writing (which consent shall not be unreasonably withheld or delayed):
(i) the Company shall use its business in the usual, regular and ordinary course and in substantially the same manner as previously conducted, to pay its debts and Taxes when due (subject to good faith disputes over such debts or Taxes), to pay or perform other obligations when due and, to the extent consistent with such business, to use all commercially reasonable efforts consistent with past practices to conduct the businesses of the Company and policies to preserve intact its present business organization, keep available the services of its present officers and key employees and consultants and preserve its relationships with customers, suppliers, distributors, licensors, licenseesCompany Subsidiaries shall be conducted only in, and others having business dealings with it, to the end that its goodwill Company and ongoing businesses would be unimpaired at the Effective Time. The Company shall promptly notify Parent of any event or occurrence not Subsidiaries in the ordinary course of business and in a manner consistent with past practice; and
(ii) the Company shall use its commercially reasonable efforts to preserve substantially intact its business organization and the business organization of the Company Subsidiaries, to keep available the services of the current officers, employees and consultants of the Company and the Company Subsidiaries and to preserve the current relationships of the Company and the Company Subsidiaries with customers, suppliers and other persons with which the Company or the Subsidiaryany Company Subsidiary has significant business relations. By way of amplification and not limitation, except as specifically otherwise contemplated by this Agreement or as specifically set forth in Section 5.01 of the Company Disclosure Schedule, neither the Company nor and the Subsidiary shallCompany Subsidiaries shall not, between the date of this Agreement and the earlier to occur of the Effective TimeTime and the termination of this Agreement, directly or indirectly, do, or propose to do, any of the following without the prior written consent of Parent (it is hereby agreed which consent shall not be unreasonably withheld or delayed):
(a) amend or otherwise change its organizational documents;
(b) issue, sell, pledge, dispose of, grant, encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of any shares of its capital stock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of such capital stock, or any other ownership interest (including, without limitation, any phantom interest), of the Company or any Company Subsidiary, including, without limitation, any grant of options to a "disqualified individual" within the meaning of Section 280G of the Code, except pursuant to the terms of options, warrants or preferred stock outstanding on the date of this Agreement or pursuant to shares reserved for issuance under the Company Stock Plans as of the date hereof;
(c) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock;
(d) reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, except that the Company may repurchase, at cost, any shares of its capital stock subject to a right of repurchase;
(e) acquire (including, without limitation, by Parent merger, consolidation or acquisition of stock or assets) any interest in any corporation, partnership, other business organization or any division thereof or, except in the ordinary course of business and consistent with past practice, any assets in excess of $50,000 individually, or $250,000 in the aggregate;
(f) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advances, except in the ordinary course of business and consistent with past practice;
(g) authorize any capital expenditure in excess of $50,000 individually or $250,000 in the aggregate;
(h) increase the compensation payable or to become payable to its officers or employees, grant any severance or termination pay, or right thereto, to, or enter into any employment or severance agreement with, any director, officer or other employee of the Company or any Company Subsidiary, enter into any employment or consulting arrangements with any person who provides services to the Company or any Company Subsidiary that following an email request provides for compensation amounts that are not in accordance with past practice or establish, adopt, enter into or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee;
(i) enter into any contract or agreement in which the obligation of the Company or any Company Subsidiary exceeds $50,000, except in the ordinary course of business and consistent with past practice;
(j) enter into, amend or terminate any contract, agreement, commitment or arrangement that, if fully performed, would not be permitted under this Section 5.01;
(k) other than in the ordinary course of business consistent with past practice, enter into any contract, agreement or obligation which shall not terminate or be subject to termination for convenience, in each case, without cost, by the Company or any Company Subsidiary upon notice of 30 days or less;
(l) take any action, other than reasonable and usual actions in the ordinary course of business and consistent with past practice, with respect to accounting policies or procedures;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, adopt or change any method of Tax accounting, file any amended Tax return, enter into any closing agreement, settle any Tax claim or assessment, surrender any right to claim a Tax refund, consent by to any extension or waiver of the limitation period applicable to any Tax claim or assessment or take or omit to take any other action with respect to Taxes, if any such action or omission would have the effect of materially increasing the Tax liability of the Company, consent via email from any Company Subsidiary, Parent or any affiliate of Parent’s General Counsel ; or
(n) (i) sell, assign, lease, terminate, abandon, transfer or Chief Financial Officer otherwise dispose of or grant any security interest in and to any item of the Owned Intellectual Property or Licensed Intellectual Property, in whole or in part, (ii) grant any license with respect to any Owned Intellectual Property, other than license of Company Software to customers of the Company or any Company Subsidiary to whom the Company or any Company Subsidiary licenses such Company Software in the ordinary course of business, (iii) develop, create or invent any Intellectual Property jointly with any third party not exclusively assigned to the Company shall Company, or (iv) disclose, or allow to be deemed written consent for purposes of this Section 5.01):disclosed, any confidential Owned Intellectual Property, unless such Owned Intellectual Property is subject to a confidentiality or nondisclosure covenant protecting against disclosure thereof.
Appears in 1 contract
CONDUCT OF BUSINESSES PENDING THE MERGER. SECTION 5.01 5.01. Conduct of Business by the Company and the Subsidiaries Pending the Merger. During ----------------------------------------------------- Except as set forth in the period from Company Disclosure Schedule or as contemplated by any other provision of this Agreement, the Company agrees that, between the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time:
(i) the businesses of the Company shall be conducted only in, and the Company shall not take any action except in, the Company agrees, and shall cause each Subsidiary (except to the extent that Parent shall otherwise consent in writing), to carry on its business in the usual, regular and ordinary course Ordinary Course of Business and in substantially the same a manner as previously conducted, to pay its debts and Taxes when due (subject to good faith disputes over such debts or Taxes), to pay or perform other obligations when due and, to the extent consistent with such business, to use all reasonable efforts consistent with past practices and policies practice;
(ii) the Company shall use commercially reasonable best efforts to preserve substantially intact its present current business organization, to keep available the services of its present officers and key the current officers, employees and consultants of the Company and to preserve its the current relationships of the Company with customers, suppliers, distributors, licensorslessors, licenseescreditors, contractors and others having other persons with which the Company has business dealings relations, with it, to the end intention that its goodwill and ongoing businesses would shall be unimpaired at preserved;
(iii) the Effective Time. The Company shall maintain in good working order and condition, ordinary wear and tear excepted, and in compliance in all material respects with all applicable laws and regulations, all of the Company's assets; and
(iv) the Company shall observe and perform all terms, conditions, covenants and obligations contained in all existing agreements between the Company and third parties the violation of which would have, individually or in the aggregate, a Material Adverse Effect on the Company's business; not willfully take any action which would cause a breach or violation of or default under any material agreement, lease, contract, or other written instrument, commitment or arrangement, or under any License or Permit, judgment, writ or order, applicable to or affecting the Company's business or the Company Common Stock, and promptly notify Parent in writing of the occurrence of any event such breach or occurrence not in the ordinary course of business of the Company or the Subsidiarydefault. By way of amplification and not limitation, except as specifically contemplated by expressly provided in this Agreement or as specifically set forth in Section 5.01 of the Company Disclosure Schedule, neither the Company nor the Subsidiary shallshall not, between the date of this Agreement and the Effective Time, directly or indirectly, do, or propose to do, any of the following following:
(a) amend or otherwise change its articles of incorporation or by-laws;
(b) issue, sell, pledge, dispose of, grant, encumber, transfer or authorize the issuance, sale, pledge, disposition, grant, encumbrance or transfer of, (i) any shares of its capital stock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of such capital stock, or any other ownership interest (including, without the prior written consent limitation, any phantom interest), of Parent (it is hereby agreed by Parent that following an email request for consent by the Company, consent via email from Parent’s General Counsel or Chief Financial Officer (ii) any assets or properties of the Company other than in the Ordinary Course of Business;
(c) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock, make any other actual, constructive or deemed distribution in respect of its capital stock or otherwise make any payments to stockholders in their capacity as such;
(d) reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any shares of its capital stock;
(e) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets) any interest in any corporation, partnership, other business organization or any division thereof or, except in the Ordinary Course of Business, any material assets;
(f) incur or agree to incur any indebtedness for borrowed money or issue or agree to issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, except for indebtedness incurred in the Ordinary Course of Business, which in no event shall exceed $50,000 individually or $250,000 in the aggregate;
(g) make or authorize any capital expenditures involving payments by the Company in excess of $50,000 individually or $250,000 in the aggregate;
(h) increase or agree to increase the compensation payable or to become payable to its officers, directors or employees, except for increases in accordance with past practice in salaries or wages of employees of the Company who are not officers of the Company, or grant or agree to grant any severance or termination pay to, or enter into any employment or severance agreement with, any director, officer, employee or consultant of the Company (except that the Company may continue to hire new employees and to enter into employment agreements or arrangements with such new employees), or establish, adopt, enter into or amend any collective bargaining, bonus, profit sharing, savings, insurance, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee, other than in the Ordinary Course of Business;
(i) enter into, amend, modify or waive any material right under any contract or agreement material to the business, results of operations or financial condition of the Company;
(j) enter into any licensing, distribution, sponsorship, advertising, marketing, sales, merchant program or other similar contracts, agreements, or obligations involving payments by the Company shall in excess of $50,000;
(k) take any action, other than reasonable and usual actions in the Ordinary Course of Business and consistent with past practice, with respect to accounting policies or procedures, except for any such action required by a concurrent change in GAAP;
(l) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person;
(m) make any loans, advances or capital contributions to, or investments in, any other person;
(n) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company;
(o) revalue in any material respect any of its assets, including writing down the value of inventory or writing-off notes or accounts receivable, other than in the Ordinary Course of Business;
(p) modify its standard warranty terms for its products or amend or modify any product warranties in effect as of the date hereof in any manner that would reasonably be deemed written consent expected to have a Material Adverse Effect;
(q) make any material Tax election (except as permitted by Section 7.11) or settle or compromise any Tax liability or permit any material insurance policy naming it as a beneficiary or loss-payable to expire or to be canceled or terminated, unless a comparable insurance policy reasonably acceptable to Parent is obtained and in effect;
(r) fail to file any Tax Returns when due (or, alternatively, fail to file for available extensions) or fail to cause such Tax Returns when filed to be complete and accurate in all respects;
(s) fail to pay any Taxes or other material debts when due;
(t) fail to maintain all insurance polices consistent with past practices and, unless comparable insurance is substituted therefor, not take any action to terminate or modify, nor permit the lapse or termination of, the present insurance policies and coverages of the Company;
(u) settle or compromise any pending or threatened suit, action or claim that (i) relates to the transactions contemplated hereby or (ii) would involve payment by the Company of more than $50,000 individually or $250,000 in the aggregate or that would reasonably be expected to have a Material Adverse Effect;
(v) take any action or fail to take any action that could reasonably be expected to (i) limit the utilization of any net operating losses, built-in losses, tax credits or other similar items of the Company under Section 382, 383, 384 or 1502 of the Code or the Treasury Regulations thereunder, other than limitations arising under the Merger, (ii) cause any transaction in which the Company was a party that was intended to be treated as a reorganization under Section 368(a) of the Code to fail to qualify as a reorganization under Section 368(a) of the Code, or (iii) cause or voluntarily permit a change in any method of accounting for tax purposes during or applicable to its current tax year which would render inaccurate, misleading or incomplete the information concerning Taxes set forth or referred to in Section 3.14 hereof, or that would reasonably be expected to have a Material Adverse Effect for any period prior to the Effective Time; or
(w) take or agree in writing or otherwise to take any of the actions described in Sections 5.01(a) through 5.01(v) or take any action that would make any of the representations or warranties of the Company contained in this Section 5.01):Agreement (including the exhibits hereto) untrue or incorrect.
Appears in 1 contract
Samples: Merger Agreement (Newport Corp)
CONDUCT OF BUSINESSES PENDING THE MERGER. SECTION 5.01 5.01. Conduct of Business Respective Businesses by the Company Blockbuster and the Subsidiaries Viacom Pending the Merger. During the period from Each of Blockbuster and Viacom covenants and agrees that, between the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, unless the Company agreesother party shall have consented in writing (such consent not to be unreasonably withheld), the businesses of each of Blockbuster and Viacom and their respective subsidiaries shall, in all material respects, be conducted in, and each of Blockbuster and Viacom and their respective subsidiaries shall cause each Subsidiary (not take any material action except to in, the extent that Parent shall otherwise consent in writing), to carry on its business in the usual, regular and ordinary course and in substantially the same manner as previously conducted, to pay its debts and Taxes when due (subject to good faith disputes over such debts or Taxes), to pay or perform other obligations when due and, to the extent consistent with such of business, to use all reasonable efforts consistent with past practices practice; and policies each of Blockbuster and Viacom shall use its reasonable best efforts to preserve substantially intact its present business organization, to keep available the services of its present officers and key its subsidiaries' current officers, employees and consultants and to preserve its and its subsidiaries' relationships with customers, suppliers, distributors, licensors, licensees, suppliers and others having other persons with which it or any of its subsidiaries has significant business dealings with it, to the end that its goodwill and ongoing businesses would be unimpaired at the Effective Time. The Company shall promptly notify Parent of any event or occurrence not in the ordinary course of business of the Company or the Subsidiaryrelations. By way of amplification and not limitation, except (i) as specifically contemplated by this Agreement Agreement, (ii) for any actions taken by Viacom relating to the proposed acquisition by Viacom of Paramount Communications Inc., a Delaware corporation ("Paramount"), (iii) for any actions taken by Blockbuster in its capacity as the controlling stockholder of Spelling that are necessary due to the applicable fiduciary duties to Spelling and the other stockholders of Spelling, as determined by Blockbuster in good faith after consultation with and based upon the advice of independent legal counsel (who may be Blockbuster's regularly engaged independent legal counsel) or (iv) as specifically set forth in on Section 5.01 of the Company Blockbuster Disclosure Schedule or Section 5.01 of the Viacom Disclosure Schedule, neither the Company Viacom nor the Subsidiary Blockbuster nor any of their respective subsidiaries shall, between the date of this Agreement and the Effective Time, directly or indirectly, indirectly do, or propose or agree to do, any of the following without the prior written consent of Parent the other (provided that the following restrictions shall not apply to any subsidiaries which Blockbuster or Viacom, as the case may be, do not control):
(a) amend or otherwise change the Certificate of Incorporation or By-Laws of Viacom or Blockbuster (except, with respect to Viacom, the Viacom Certificate Amendments);
(b) issue, sell, pledge, dispose of, grant, encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, (i) any shares of capital stock of any class of it is hereby agreed or any of its subsidiaries, or any options (other than the grant of options in the ordinary course of business consistent with past practice to employees who are not executive officers of Blockbuster or Viacom or the grant of options previously disclosed by Parent that following an email request for consent by the Company, consent via email from Parent’s General Counsel or Chief Financial Officer Blockbuster to Viacom prior to the Company shall date of this Agreement), warrants, convertible securities or other rights of any kind to acquire any shares of such capital stock, or any other ownership interest (including, without limitation, any phantom interest), of it or any of its subsidiaries (other than the issuance of shares of capital stock in connection with (A) any dividend reinvestment plan or by any Blockbuster Plan with an employee stock fund or employee stock ownership plan feature, consistent with applicable securities laws, (B) the exercise of options, warrants or other similar rights outstanding as of the date of this Agreement and in accordance with the terms of such options, warrants or rights in effect on the date of this Agreement, (C) otherwise permitted to be deemed written consent for purposes granted pursuant to this Agreement or (D) any acquisition by Blockbuster permitted by paragraph (e)(i) of this Section 5.01):) or (ii) any assets of it or any of its subsidiaries, except for sales in the ordinary course of business or which, individually, do not exceed $10,000,000 or which, in the aggregate, do not exceed $25,000,000;
(c) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock except, (i) in the case of Blockbuster, the regular quarterly dividend payable on or about April 1, 1994 in an amount not to exceed $.025 per share of Blockbuster Common Stock, (ii) in the case of Blockbuster, other regular quarterly dividends in amounts not in excess of $.025 per share per quarter and payable consistent with past practice, (iii) in the case of Spelling, regular quarterly dividends of $.020 per share per quarter and payable consistent with past practice and (iv) dividends declared and paid by a subsidiary of either Blockbuster (other than Spelling) or Viacom (each such dividend to be declared and paid in the ordinary course of business consistent with past practice);
(d) reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock other than acquisitions by a dividend reinvestment plan or by any Blockbuster Plan with an employee stock fund or employee stock ownership plan feature, consistent with applicable securities laws;
Appears in 1 contract
Samples: Merger Agreement (Viacom Inc)
