Conduct of the Company. The Company covenants and agrees that, except for matters (i) expressly permitted or expressly contemplated by this Agreement, (ii) set forth on Part 6.01 of the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken with the prior written consent of Parent (which shall not be unreasonably withheld, conditioned or delayed), (v) required by Applicable Law or the rules and regulations of Nasdaq, from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereof, the Company (A) shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) conduct its business in the ordinary course in all material respects, substantially consistent with past practice, (2) to the extent consistent with the foregoing clause (1), maintain its business as a going concern and (3) keep available the services of its current officers and key employees and to preserve the goodwill of and maintain satisfactory relationships with those Persons having material business relationships with the Company and its Subsidiaries, and (B) shall not, and shall cause each of its Subsidiaries not to: (a) amend the Company’s certificate of incorporation or bylaws, or amend any certificate of incorporation or bylaws, or other comparable charter or organizational documents, of the Company’s Subsidiaries; (b) other than with respect to a direct or indirect wholly owned Subsidiary of the Company, (i) establish a record date for, declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock, property or otherwise) in respect of, or enter into any agreement with respect to the voting of, any capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), (ii) split, reverse split, combine, subdivide or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) of the Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c), issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), or (iv) purchase, redeem or otherwise acquire or offer to purchase, redeem or acquire any Company Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPP; (c) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company Securities, other than (i) the issuance of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement or (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company; (d) merge, consolidate or, other than in the ordinary course of business substantially consistent with past practice, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries; (e) (i) increase the salary, wages, benefits, bonuses or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof; (f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000; (g) negotiate, enter into, amend or extend any Collective Bargaining Agreement; (h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice; (i) sell, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregate, except in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice; (j) agree to any exclusivity, non-competition or similar provision or covenant limiting the ability of the Company or any of its Subsidiaries to compete or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time; (k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization); (l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement; (m) make, change or revoke any material Tax election, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business; (n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule; (o) institute, settle or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub; (p) enter into any material new line of business; (q) fail to maintain in all material respects any Insurance Policies; (r) other than in the ordinary course of business or as contemplated by this Agreement (i) amend, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an Affiliate of the Company; (s) voluntarily terminate, amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule; (t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Act; or (u) authorize, commit or agree to take any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentence.
Appears in 4 contracts
Samples: Agreement and Plan of Merger (Alaska Communications Systems Group Inc), Agreement and Plan of Merger (Alaska Communications Systems Group Inc), Merger Agreement (Alaska Communications Systems Group Inc)
Conduct of the Company. The From the date of this Agreement until the Effective Time, the Company covenants shall, and agrees thatshall cause each of its Subsidiaries to, use its reasonable best efforts to conduct its business in the Ordinary Course and preserve intact its present business organization; provided, that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any provision of the following sentence shall be deemed a breach of this sentence unless such action constitutes a breach of a provision of the following sentence. Without limiting the generality of the foregoing sentence, except for matters (iw) expressly permitted or expressly contemplated by this Agreement, (ii) set forth on Part 6.01 of the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken as with the prior written consent of Parent (which shall email by any officer of Parent being sufficient and such consent not to be unreasonably withheld, conditioned or delayed), (vx) as expressly contemplated by this Agreement, (y) as set forth in Section 7.01 of the Company Disclosure Schedule or (z) as required by Applicable Law or the rules and regulations of NasdaqLaw, from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereofuntil the Effective Time, the Company (A) shallshall not, and nor shall cause each it permit any of its Subsidiaries to use commercially reasonable efforts to (1) conduct its business in the ordinary course in all material respects, substantially consistent with past practice, (2) to the extent consistent with the foregoing clause (1), maintain its business as a going concern and (3) keep available the services of its current officers and key employees and to preserve the goodwill of and maintain satisfactory relationships with those Persons having material business relationships with the Company and its Subsidiaries, and (B) shall not, and shall cause each of its Subsidiaries not to:
(a) amend the Company’s its certificate of incorporation or bylawsincorporation, or amend any certificate of incorporation or bylaws, bylaws or other comparable charter or similar organizational documents, other than in immaterial respects and other than amendments to the governing documents of any wholly owned Subsidiary of the Company’s SubsidiariesCompany that would not prevent, materially delay or materially impair the Offer, the Merger or the other transactions contemplated by this Agreement;
(b) other than with respect to a direct or indirect wholly owned Subsidiary of the Company, (i) establish a record date forsplit, combine or reclassify any shares of its capital stock, (ii) declare, set aside or pay any dividends on, dividend or make any other distributions distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, property except for dividends or other such distributions by any of its wholly owned Subsidiaries or (iii) redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any Company Securities or any Company Subsidiary Securities, except as required by the terms of any Company Plan; provided that the Company may continue to declare and pay regular quarterly cash dividends to the holders of shares of Company Common Stock in an amount not to exceed $0.22 per share of the Company Common Stock per fiscal quarter;
(c) (i) issue, deliver or sell, or authorize the issuance, delivery or sale of, any shares of any Company Securities or Company Subsidiary Securities, other than the issuance of (A) any shares of Company Common Stock upon the exercise of Company Stock Options in accordance with the terms of those options outstanding as of the date of this Agreement or as are issued after the date of this Agreement as permitted under this Agreement, (B) any shares of Company Common Stock upon the settlement of Company RSUs in accordance with the terms of those Company RSUs outstanding as of the date of this Agreement or as are issued after the date of this Agreement as permitted under this Agreement, (C) any Company Subsidiary Securities to the Company or any other Subsidiary of the Company or (D) any sale of shares pursuant to the Chrysler Agreement, or (ii) amend any term of any Company Security or any Company Subsidiary Security, except as required by the terms of any Company Plan;
(d) incur any material capital expenditures or any obligations or liabilities in respect thereof, except for (i) capital expenditures included in the capital expenditure budget that has been approved by Parent prior to the date of this Agreement, and (ii) a donation to the Santander Consumer USA Inc. Foundation in an amount of up to $50 million;
(e) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) in respect ofany business, division, corporation, partnership, or enter into other business organization or division thereof, other than (i) in the Ordinary Course and (ii) acquisitions with a purchase price (including assumed indebtedness) that does not exceed $160 million in the aggregate;
(f) sell or otherwise transfer any agreement business, division, corporation, partnership, or other business organization or division thereof, other than (i) sales of obsolete equipment in the Ordinary Course, (ii) sales of assets, securities, properties, interests or businesses with a sale price (including any related assumed indebtedness) that does not exceed $160 million in the aggregate, and (iii) pursuant to the Chrysler Agreement or with respect to the voting of, any capital stock of Loans originated or held by the Company or any of its Subsidiaries (Subsidiaries, or securities convertible or exchangeable therefor), (ii) split, reverse split, combine, subdivide or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) other financial assets of the Company or any of its Subsidiaries, entered into in the Ordinary Course or for the purpose of liquidity management, including in the context of secured structured financings, deficiency and debt forward flow agreements and off-balance sheet financings;
(iiig) except as expressly provided in Section 6.01(c), issue or authorize the issuance of settle any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), or (iv) purchase, redeem or otherwise acquire or offer to purchase, redeem or acquire any Company Securitiesmaterial lawsuit before a Governmental Authority, except for the settlements that involve monetary remedies with a value not in excess of $5 million (net settlement of Company Equity Awards amounts covered by insurance or acquisitions of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance indemnification agreements with the terms of the ESPP;
(cThird Parties) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company Securities, other than (i) the issuance of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement or (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company;
(d) merge, consolidate or, other than in the ordinary course of business substantially consistent with past practice, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of do not impose material equitable relief against the Company or any of its Subsidiaries;
(eh) except as required by Applicable Law, under the terms of any Company Plan in effect on the date of this Agreement or in the Ordinary Course in accordance with the Company’s governance procedures in effect on the date of this Agreement (i) grant any severance, retention or termination pay to, or enter into or amend any severance, retention, termination, employment, consulting, bonus, change in control or severance agreement with, any current or former Key Employee, (ii) increase the salary, wages, benefits, bonuses compensation or benefits provided to any current or former Key Employee (other cash than increases in base compensation payable or to become payable to in the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms Ordinary Course of existing employment or other compensation agreements or arrangements in effect as of the date hereofnot more than 10%), (Biii) required under grant any equity or equity-based awards to, or discretionarily accelerate the vesting or payment of any such awards held by, any current or former Key Employee, (iv) establish, adopt, enter into or amend any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law(v) (A) hire any Key Employee, (C) made other than in the ordinary course Ordinary Course to fill non-executive officer vacancies arising due to terminations of business and substantially consistent with past practice, employment or (DB) terminate the employment of any Key Employee other than for cause;
(i) change the Company’s methods of accounting, except as required by GAAP or in connection with changes to benefits as part Regulation S-X of annual enrollment; provided that such changes made as part of annual enrollment are made the 1934 Act;
(i) make (other than in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
(i) sell, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregate, except in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice;
(j) agree to any exclusivity, non-competition or similar provision or covenant limiting the ability of the Company or any of its Subsidiaries to compete or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file period or adopt or change any material amended method of Tax accounting, (ii) amend any material Tax Return or file claims for any material Tax Return in a manner inconsistent with past practice, refunds or (iii) enter into any “material closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceedingclaim, audit or assessment or surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, liability or consent to seek or obtain any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of businessruling from a Taxing Authority;
(nk) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;
(o) institute, settle withdraw or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than in the ordinary course of business or as contemplated by this Agreement (i) amend, modify, renew or terminatepermit the withdrawal or modification of, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an Affiliate of the Company;
(s) voluntarily terminate, amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN ActCompensation Arrangement Approvals; or
(ul) authorizeagree, resolve or commit or agree to take do any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentenceforegoing.
Appears in 3 contracts
Samples: Merger Agreement (Santander Holdings USA, Inc.), Merger Agreement (Santander Consumer USA Holdings Inc.), Merger Agreement (Santander Holdings USA, Inc.)
Conduct of the Company. The Company covenants and agrees that, except for matters (i) expressly permitted or expressly contemplated by this Agreement, (ii) Except as set forth on Part in Section 6.01 of the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken except as expressly permitted or expressly required by this Agreement or Applicable Law or with the prior written consent of Parent (which shall not be unreasonably withheld, conditioned or delayed), (v) required by Applicable Law or the rules and regulations of NasdaqParent, from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereofTime, the Company (A) shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) to, conduct its business in the ordinary course consistent with past practice and use its commercially reasonable efforts to (i) preserve intact in all material respects, substantially consistent with past practicerespects its present business organization, (2ii) to the extent consistent with the foregoing clause maintain in effect all of its foreign, federal, state and local licenses, permits, consents, franchises, approvals and authorizations, (1), maintain its business as a going concern and (3iii) keep available the services of its current directors, officers and key employees and to preserve the goodwill of and employees, (iv) maintain satisfactory relationships with those Persons its material customers, lenders, suppliers and others having material business relationships with it and (v) manage its working capital (including the timing of collection of accounts receivable and of the payment of accounts payable) in the ordinary course of business consistent with past practice. Without limiting the generality of the foregoing, except with the prior written consent of Parent, which shall not be unreasonably withheld, delayed or conditioned (except in the case of Sections 6.01(a) through (c), (e), (f), (h), (i), (k), (m) and (p) (to the extent that such subsection (p) relates to any of Sections 6.01(a) through (c), (e), (f), (h), (i), (k) or (m)), in which case Parent may withhold, delay or condition its consent in its sole discretion), as expressly required by this Agreement or Applicable Law, or set forth in Section 6.01 of the Company and its SubsidiariesDisclosure Schedule, and (B) the Company shall not, and nor shall cause each it permit any of its Subsidiaries not to:
(a) amend the Company’s certificate its articles of incorporation or bylawsincorporation, or amend any certificate of incorporation or bylaws, bylaws or other comparable charter similar organizational documents (whether by merger, consolidation or organizational documents, of the Company’s Subsidiariesotherwise);
(b) other than with respect to a direct or indirect wholly owned Subsidiary of the Company, (i) establish a record date forsplit, combine or reclassify any shares of its capital stock, (ii) declare, set aside or pay any dividends on, dividend or make any other distributions distribution (whether in cash, stock, stock or property or otherwiseany combination thereof) in respect of its capital stock, except for dividends by any of its wholly owned Subsidiaries located solely within the United States or (iii) redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any Company Securities or any Company Subsidiary Securities, except for the delivery of Company Securities by holders of Company Stock Options or Company Restricted Stock Awards to the Company to pay any applicable exercise price and/or Taxes related to the exercise or vesting of such awards;
(c) (i) issue, deliver or sell, or authorize the issuance, delivery or sale of, any shares of any Company Securities or Company Subsidiary Securities, other than the issuance of (A) any shares of the Company Stock upon the exercise of Company Stock Options that are outstanding on the date of this Agreement in accordance with their terms on the date of this Agreement and (B) any Company Subsidiary Securities to the Company or any other Subsidiary of the Company or (ii) amend any term of any Company Security or any Company Subsidiary Security (in each case, whether by merger, consolidation or otherwise);
(d) incur any capital expenditures, or any obligations or liabilities in respect thereof, except for capital expenditures not to exceed $250,000 individually or $2,000,000 in the aggregate;
(e) acquire (by merger, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, any assets, securities, properties, interests or businesses, other than in the ordinary course of business of the Company and its Subsidiaries in a manner that is consistent with past practice;
(f) sell, lease or otherwise transfer, or create or incur any Lien on, any of the Company’s or its Subsidiaries’ material assets, securities, properties, interests or businesses, other than (i) sales of services and (ii) Liens arising under the Company Credit Facility, in each case in the ordinary course of business consistent with past practice;
(g) without limiting the preceding clause (f), license, sell, assign, abandon, allow to lapse, transfer, convey, lease or otherwise dispose of any Intellectual Property or IT Assets owned, used or held for use by the Company or any of its Subsidiaries, other than in the ordinary course of business consistent with past practice;
(h) other than in connection with actions permitted by Section 6.01(d) or Section 6.01(e), make any loans, advances or capital contributions to, or investments in, any other Person, other than in the ordinary course of business consistent with past practice;
(i) create, incur, assume, suffer to exist or otherwise be liable with respect to any indebtedness for borrowed money or guarantees thereof, except for borrowings under the Company Credit Facility in the ordinary course of business consistent with past practice;
(i) enter into any agreement with respect contract, agreement, arrangement or understanding that would constitute a Material Contract if it had been entered into prior to the voting ofdate hereof, other than any capital stock agreement for the sale of services by the Company or any Subsidiary entered into in the ordinary course of business consistent with past practice (including, for the avoidance of doubt, in connection with any action permitted to be taken pursuant to any subsection of this Section 6.01), or (ii) amend or modify in any material respect or terminate any Material Contract or otherwise waive, release or assign any material rights, claims or benefits of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), (ii) split, reverse split, combine, subdivide or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) of the Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c), issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), or (iv) purchase, redeem or otherwise acquire or offer to purchase, redeem or acquire any Company Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPP;
(c) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company Securities, other than (i) the issuance of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement or (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company;
(d) merge, consolidate or, other than in the ordinary course of business substantially consistent with past practice, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries;
(e) (i) increase the salary, wages, benefits, bonuses or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
(i) sell, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregate, except in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice;
(j) agree to any exclusivity, non-competition or similar provision or covenant limiting the ability of the Company or any of its Subsidiaries to compete or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;
(o) institute, settle or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than in the ordinary course of business or as contemplated by this Agreement (i) amend, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms);
(k) (i) grant or increase any severance, retention or termination pay to (or amend any existing severance pay, retention or termination arrangement), (ii)enter into any employment, consulting, bonus, change in control, deferred compensation or other similar agreement (or amend any such existing agreement), (iii) increase benefits payable under any Company Employee Plan, (iv) establish, adopt or amend (except as required by Applicable Law) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, Company Employee Plan or Collective Bargaining Agreement or (iiv) renew increase compensation, bonus or enter into other benefits payable to any Contract current or former Company Service Provider, except, with an Affiliate respect to any Company Service Provider whose annual base compensation does not exceed $125,000, increases in annual base compensation of up to 3% in the Companyordinary course of business consistent with past practice;
(sl) voluntarily terminate, amend hire any new Company Service Provider (other than hires of Company Service Providers with annual base compensation of less than $125,000 in the ordinary course of business consistent with past practice) or fail to renew or preserve terminate the service of any Company Communications License as set forth on Part 6.01(sService Provider other than for cause or take any action which is reasonably likely to give rise to a “good reason” (or any term of similar import) of the Company Disclosure Scheduleclaim;
(tm) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Act; or
(u) authorize, commit or agree to take any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of change the Company’s methods of accounting, except as required by concurrent changes in GAAP or in Regulation S-X of the 1934 Act, as agreed to by its independent public accountants;
(n) transfer any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with cash or funds held by the Company or any Subsidiary outside the United States, on the one hand, to the Company or any Subsidiary in the United States, on the other hand, or permit the making of any loan by a Subsidiary outside the United States to the Company or any Subsidiary in the United States, other than any such transfers or loans (i) in an aggregate amount (including all such transfers and loans) not exceeding $15.0 million and (ii) which, individually or in the aggregate, could not reasonably be expected to have any adverse tax consequences to the Company on a consolidated basis;
(o) obtain any insurance policy relating to tax matters of the Company and its Subsidiaries, or enter into any contract, agreement, arrangement or understanding in respect thereof; or
(including p) agree, resolve or commit to do any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by of the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentenceforegoing.
Appears in 3 contracts
Samples: Merger Agreement (Rennes Fondation), Merger Agreement (Ebix Inc), Merger Agreement (Ebix Inc)
Conduct of the Company. The Company covenants and agrees that, except for matters (i) expressly permitted or expressly contemplated by this Agreement, (ii) set forth on Part 6.01 of the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken with the prior written consent of Parent (which shall not be unreasonably withheld, conditioned or delayed), (v) required by Applicable Law or the rules and regulations of Nasdaq, from From the date hereof until the earlier Closing Date, except as set forth in the Disclosure Schedule or as contemplated by any of the Effective Time Transaction Documents, Limited Brands and the termination of this Agreement in accordance with Article 8 hereof, Seller shall cause the Company (A) shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts Subsidiary to (1i) conduct its business in the ordinary course in all material respects, substantially a manner consistent with past practice, practice and (2ii) use its reasonable efforts to the extent consistent with the foregoing clause (1), maintain preserve intact its business as a going concern organizations and (3) relationships and goodwill with third parties and to keep available the services of its current officers present employees. Without limiting the generality of the foregoing, from the date hereof until the Closing Date, except as required by Law, as set forth in the Disclosure Schedule or as contemplated by the Transaction Documents, Limited Brands and key employees and Seller will not, to preserve the goodwill of and maintain satisfactory relationships with those Persons having material business relationships with extent relating to the Company and its Subsidiaries, and without the prior consent of Buyer (B) shall notnot to be unreasonably withheld), and shall cause each permit the Company or any of its the Subsidiaries not to:
(a) amend the Company’s certificate of incorporation adopt or bylaws, or amend propose any certificate of incorporation or bylaws, or other comparable charter or change in its organizational documents, of the Company’s Subsidiaries;
(b) merge or consolidate with any other Person or acquire a material amount of assets from any other Person other than with respect to a direct or indirect wholly owned Subsidiary of the Company, (i) establish a record date forpursuant to existing contracts, declare, set aside agreements or pay any dividends on, commitments that are disclosed herein or make any other distributions (whether in cash, stock, property or otherwise) in respect of, or enter into any agreement with respect to the voting of, any capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), Disclosure Schedule and (ii) splitthe acquisition of inventory, reverse split, combine, subdivide materials or reclassify or otherwise amend supplies in the terms ordinary course of any capital stock (or securities convertible or exchangeable therefor) of the Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c), issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), or (iv) purchase, redeem or otherwise acquire or offer to purchase, redeem or acquire any Company Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPPbusiness;
(c) issue, deliver, sell, grantlease, announce, pledge, transfer, subject to any Lien, license or otherwise encumber or dispose of any equity interests of the Company material assets or incur any obligation to make any payments to any Person based on the price or value of any Company Securities, other than property except (i) the issuance of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereofexisting contracts or commitments, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement or (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) for the issuance sale of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company;
(d) merge, consolidate or, other than inventory in the ordinary course of business substantially consistent with past practice, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries;
(e) (i) increase the salary, wages, benefits, bonuses or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (Diii) in connection with changes to benefits as part for the sale, lease, disposition or encumbrance of annual enrollment; provided that such changes made as part amounts of annual enrollment are made assets no longer used in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
(i) sell, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregate, except in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice;
(j) agree to any exclusivity, non-competition or similar provision or covenant limiting the ability of the Company or any of its Subsidiaries to compete or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (ivd) make any loan, advance or capital contribution to or investment in any Person Person, except for travel, relocation and similar advances in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(ne) make incur, assume or guarantee any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;
(o) institute, settle or agree to settle any Proceedingsmaterial indebtedness for borrowed money, other than (i) the settlement letters of claims, liabilities credit incurred or obligations (A) reserved against on the most recent balance sheet of the Company included entered into in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line ordinary course of business;
(qf) fail except as required by Law or any pre-existing contract as in effect as of the date hereof, make, grant or promise any compensation or employee benefit increase or change to maintain in all material respects any Insurance Policies;
(r) non-store level employee, other than in the ordinary course of business or as contemplated by this Agreement (i) amend, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance consistent with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an Affiliate of the Company;
(s) voluntarily terminate, amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Actpast custom and practice; or
(ug) authorize, commit or agree enter into a binding agreement to take do any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentenceforegoing.
Appears in 3 contracts
Samples: Unit Purchase Agreement (Express Parent LLC), Unit Purchase Agreement (Express Parent LLC), Unit Purchase Agreement (Limited Brands Inc)
Conduct of the Company. The Company covenants and agrees that, except Except for matters (i) expressly permitted or expressly contemplated and required by this Agreement, the Transaction Documents (iiincluding the Restructuring) set forth on Part 6.01 of or as otherwise consented to in advance by the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken with the prior written consent of Parent Purchaser (which shall consent will not unreasonably be unreasonably withheld, conditioned or delayed), (v) required by Applicable Law or the rules and regulations of Nasdaq, from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereofor the date of the Closing, the Company (A) shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) the other Group Companies to, conduct its business in the ordinary course consistent with past practice and use its reasonable best efforts to (i) preserve intact its present business organization, (ii) maintain in effect all material respects, substantially of its authorizations or permits from Governmental or Regulatory Authorities necessary to conduct its business in the ordinary course consistent with past practice, (2) to the extent consistent with the foregoing clause (1), maintain its business as a going concern and (3iii) keep available the services of its current directors, officers and key employees employees, and to preserve the goodwill of and (iv) maintain satisfactory relationships with those Persons its customers, lenders, suppliers and others having material business relationships with it. Without limiting the generality of the foregoing, except for matters expressly contemplated by this Agreement (including the Restructuring) or as otherwise consented to in advance by the Purchaser (which consent will not unreasonably be withheld), the Company and its Subsidiaries, and (B) shall not, and shall cause each nor permit any of its Subsidiaries not the other Group Companies to:
(a) amend the Company’s certificate its articles of incorporation or bylawsassociation, or amend any certificate of incorporation or bylaws, bylaws or other comparable charter similar organizational documents (whether by merger, consolidation or organizational documents, of the Company’s Subsidiariesotherwise);
(b) other than with respect to a direct or indirect wholly owned Subsidiary of the Company, (i) establish a record date for, declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock, property or otherwise) in respect of, or enter into any agreement with respect to the voting of, any capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), (ii) split, reverse split, combine, subdivide combine or reclassify or otherwise amend the terms any shares of share capital of any capital stock (or securities convertible or exchangeable therefor) of the Group Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c), issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, for shares of its capital stock of the Company or any of its Subsidiaries other securities, (ii) declare, set aside or securities pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of, or convertible into or exchangeable therefor)or exercisable for, or any share capital of any Group Company, (iviii) purchaseredeem, redeem repurchase or otherwise acquire or offer to purchaseredeem, redeem repurchase, or otherwise acquire any Company Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Companyshare capital or (iv) take any action that would result in any amendment, in each case, in satisfaction by holders modification or change of Company Equity Awards any material term of the applicable withholding taxes or in accordance with the terms of the ESPPany indebtedness;
(c) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company Securities, other than (i) issue, deliver or sell, or authorize the issuance of issuance, delivery or sale of, any shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement or (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment share capital or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent equity interests, or (ii) the issuance amend any term of any shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement share capital or (iii) the issuance of other equity interests of a wholly owned Subsidiary of the Company to the Company (in each case, whether by merger, consolidation or another wholly owned Subsidiary of the Companyotherwise);
(d) merge, consolidate or, other than in the ordinary course of business substantially consistent with past practice, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, any complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiariesreorganization;
(e) (i) increase the salary, wages, benefits, bonuses make any capital expenditures or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractorsincur any liabilities in respect thereof, except for increases (A) required to be made pursuant to those contemplated by the terms of existing employment Business Plans or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required transactions contemplated by this Agreement or the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereofTransaction Framework Agreement;
(f) hire, engage or terminate the employment or engagement of acquire (other than for cause, as determined by the Companyi) any employee, officer, director, business or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part thereof (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise), or (ii) that, individually involve a purchase price or principal amount of not more any other material assets (other than $500,000 individually or $2,000,000 assets acquired in the aggregateordinary course of business consistent with past practice);
(g) (i) sell, other than one lease, license or more acquisitions otherwise transfer any of inventory, supplies, intellectual property the Group Company’s assets, raw materialssecurities, equipment properties, interests or similar businesses, including any Group Company IP outside the ordinary course of business, or (ii) create any mortgage, pledge, transfer of security interest, or lien with respect to any of its properties or assets of any Group Company, except liens for taxes not yet due or payable and liens that arise in the ordinary course of business and in amounts substantially consistent with past practicedo not materially impair such Group Company’s ownership or use of such property or assets;
(i) sellmake any material change in any compensation arrangement or agreement with any employee, assignofficer, leasedirector or shareholder of any Group Company, licenseor (ii) establish, pledgeadopt, transferenter into or amend any employee benefit plan or agreement (other than offer letters that contemplate “at will” employment without severance benefits) or collective bargaining agreement;
(i) hire any employee whose annualized compensation exceeds RMB500,000;
(i) repurchase, abandonprepay or incur any Indebtedness, subject including by way of a guarantee, or any issuance or sale of debt securities or any merger, business combination or other acquisition, or issue and sell options, warrants, calls or other rights to acquire any debt securities of any Group Company, or (ii) make any loans or guarantees made by any Group Company to or for the benefit of its employees, officers or directors, or any members of their immediate families, other than travel advances and other advances made in the ordinary course of its business;
(k) terminate or make any material change to a contract or agreement to which any Group Company is a party or any of its assets is subject, other than in the ordinary course of business;
(l) waive or compromise any valuable right or of a material debt owed to any Lien, permit to lapse Group Company;
(m) any satisfaction or otherwise dispose discharge of any assetslien, propertiesclaim, or Company Intellectual Property, in each case having a value in excess encumbrance or payment of $500,000 individually or $5,000,000 in the aggregateany obligation by any Group Company, except in the ordinary course of business;
(n) make any change in any method of accounting principles, method or practices, except for any such change required by generally accepted accounting principles or applicable law (in each case following consultation with the Company’s or its Subsidiaries’ business substantially consistent with past practice;
(j) agree to any exclusivity, non-competition or similar provision or covenant limiting the ability of the Company or any of its Subsidiaries to compete or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organizationindependent auditor);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (ivo) make or change any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax tax accounting period, file adopt or change any method of Tax accounting, amend in any material amended respect any Tax Return Returns or file any claims for material Tax Return in a manner inconsistent with past practicerefunds, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceedingtax claim, audit or assessment, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of businessassessment;
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;
(op) institute, settle settle, or agree to settle any Proceedingslegal proceedings pending or threatened before any arbitrator, court or other than (i) the settlement of claims, liabilities Governmental or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of businessRegulatory Authority;
(q) fail to maintain in all material respects enter into any Insurance Policies;new line of business; or
(r) other than in the ordinary course of business or as contemplated by this Agreement (i) amendauthorize, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an Affiliate of the Company;
(s) voluntarily terminate, amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Act; or
(u) authorizeresolve, commit or agree to take do any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions things described in this sentenceSection 4.1.
Appears in 3 contracts
Samples: Ordinary Shares Purchase Agreement (Qunar Cayman Islands Ltd.), Ordinary Shares Purchase Agreement (Qunar Cayman Islands Ltd.), Ordinary Shares Purchase Agreement (Baidu, Inc.)
Conduct of the Company. The (a) From the date hereof until the Control Date the Company covenants and agrees thatits Subsidiaries shall conduct their business in the ordinary course consistent with past practice and, to the extent consistent therewith and with the Company’s other obligations under this Agreement, shall use their reasonable best efforts to preserve intact their business organizations and relationships with third parties and to keep available the services of their present officers and employees. Without limiting the generality of the foregoing, except for matters (i) expressly permitted or expressly contemplated by this Agreement, (ii) set forth on Part 6.01 in Section 7.01 of the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken with the prior written consent of Parent (which shall not be unreasonably withheld, conditioned Schedule or delayed), (v) required otherwise expressly permitted by Applicable Law or the rules and regulations of Nasdaqthis Agreement, from the date hereof until the earlier Effective Time, without the prior written consent of the Effective Time and the termination of this Agreement in accordance with Article 8 hereof, Parent:
(b) the Company shall not adopt or propose any change to its certificate of incorporation or bylaws;
(Ac) shallthe Company shall not, and shall cause each not permit any of its Subsidiaries to, merge or consolidate with any other Person or acquire a material amount of stock or assets of any other Person;
(d) the Company shall not, and shall not permit any of its Subsidiaries to, sell, lease, license or otherwise dispose of any material subsidiary or material amount of assets, securities or property except (i) pursuant to use commercially reasonable efforts to existing contracts or commitments and (1ii) conduct its business in the ordinary course in all material respects, substantially consistent with past practice, practices;
(2e) except to the extent consistent with the foregoing clause (1)ordinary course of business consistent with past practice, maintain its business as a going concern and (3) keep available the services of its current officers and key employees and to preserve the goodwill of and maintain satisfactory relationships with those Persons having material business relationships with the Company and its Subsidiaries, and (B) shall not, and shall cause each not permit any of its Subsidiaries not to:
(a) amend , materially modify the Company’s certificate standard terms and conditions of incorporation or bylaws, or amend any certificate support services offered in connection with the licensing of incorporation or bylaws, or other comparable charter or organizational documents, products of the Company’s SubsidiariesCompany or its Subsidiaries to customers or change the frequency or quality of updates to products of the Company or its Subsidiaries in comparison to the frequency and quality of updates delivered in the most major release cycle completed prior to the date of this Agreement;
(bf) other than with respect to a direct or indirect wholly owned Subsidiary the Company shall not, and shall not permit any of the Companyits Subsidiaries to, (i) establish a record grant any severance or termination pay to (or amendment to any existing arrangement with) any director, officer or employee of the Company or any of its Subsidiaries other than pursuant to Employee Plans as in effect on the date forhereof, declare(ii) increase benefits payable under any existing severance or termination pay policies or employment agreements, set aside or pay any dividends on, or make any other distributions (whether in cash, stock, property or otherwiseiii) in respect of, or enter into any employment, deferred compensation or other similar agreement (or any amendment to any such existing agreement) with respect to the voting ofany director, any capital stock officer or employee of the Company or any of its Subsidiaries (other than agreements with new non-officer employees entered into in the ordinary course of business consistent with past practice that do not provide for severance or securities convertible or exchangeable thereforchange in control benefits), (iiiv) splitestablish, reverse split, combine, subdivide adopt or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) of the Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c)required by applicable law or immaterial amendments that do not increase benefits or costs under such plan) any collective bargaining, issue bonus, profit-sharing, thrift, pension, retirement, deferred compensation, compensation, stock option, restricted stock or authorize the issuance of other benefit plan or arrangement covering any other securities in respect ofdirector, in lieu of officer or in substitution for, shares of capital stock employee of the Company or any of its Subsidiaries or (v) other than as expressly contemplated by Section 8.04(c) or securities convertible or exchangeable therefor(d), increase compensation, bonus or (iv) purchase, redeem or otherwise acquire or offer to purchase, redeem or acquire any Company Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPP;
(c) issue, deliver, sell, grant, announce, pledge, transfer, subject other benefits payable to any Liendirector, otherwise encumber officer or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company Securities, other than (i) the issuance of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement or (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company;
(d) merge, consolidate or, other than in the ordinary course of business substantially consistent with past practice, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization employee of the Company or any of its Subsidiaries;
(eg) the Company shall not, and shall not permit any of its Subsidiaries to, intentionally (i) increase take any action that would make any representation and warranty of the salaryCompany hereunder inaccurate in any respect at, wages, benefits, bonuses or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of any time prior to, the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof Control Date or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required by omit to take any action necessary to prevent any such representation or warranty from being inaccurate in any respect at any such time, in either case, which inaccuracy would reasonably be expected to have, individually or in the terms of the applicable Company Employee Plan or under Applicable Lawaggregate, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect Material Adverse Effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;; and
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
(i) sell, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregate, except in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice;
(j) agree to any exclusivity, non-competition or similar provision or covenant limiting the ability of the Company or shall not, and shall not permit any of its Subsidiaries to, agree or commit to compete or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change do any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;
(o) institute, settle or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than in the ordinary course of business or as contemplated by this Agreement (i) amend, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an Affiliate of the Company;
(s) voluntarily terminate, amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Act; or
(u) authorize, commit or agree to take any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentenceforegoing.
Appears in 3 contracts
Samples: Merger Agreement (Peoplesoft Inc), Merger Agreement (Oracle Corp /De/), Merger Agreement (Oracle Corp /De/)
Conduct of the Company. The Company covenants and agrees that, except for matters (i) expressly permitted or expressly contemplated by this Agreement, (ii) set forth on Part 6.01 of the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken with the prior written consent of Parent (which shall not be unreasonably withheld, conditioned or delayed), (v) required by Applicable Law or the rules and regulations of Nasdaq, from From the date hereof of this Agreement until the earlier to occur of the Effective Time and the date of termination of this Agreement in accordance with Article 8 hereofX, except as expressly contemplated by this Agreement, as set forth in Section 6.1 of the Company Disclosure Letter, as consented to in writing by Parent (such consent not to be unreasonably withheld, conditioned or delayed) or as required by applicable Law, the Company (A) shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) to, conduct its business in all material respects in the ordinary course course; provided, however, that no action that is specifically permitted by any of clauses (a) through (u) of this Section 6.1 shall be deemed a breach of this sentence. Without limiting the generality of the foregoing, from the date of this Agreement until the earlier to occur of the Effective Time and the date of termination of this Agreement in all material respectsaccordance with Article X, substantially consistent except as expressly contemplated by this Agreement, as set forth in Section 6.1 of the Company Disclosure Letter, as consented to in writing by Parent (such consent, other than with past practice, (2) respect to the extent consistent with the foregoing clause (1r), maintain its business not to be unreasonably withheld, conditioned or delayed) or as a going concern and (3) keep available the services of its current officers and key employees and to preserve the goodwill of and maintain satisfactory relationships with those Persons having material business relationships with required by applicable Law, the Company and its Subsidiaries, and (B) shall not, and nor shall cause each it permit any of its Subsidiaries not to:
(a) amend the Company’s certificate of incorporation or bylawsincorporation, or amend any certificate of incorporation or bylaws, bylaws or other comparable charter similar organizational documents (whether by merger, consolidation or organizational documentsotherwise), in each case, of the Company or any Subsidiary of the Company’s Subsidiaries;
(b) other than with respect to a direct or indirect wholly owned Subsidiary of the Company, (i) establish a record date for, declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock, property or otherwise) in respect of, or enter into any agreement with respect to the voting of, any capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), (ii) split, reverse split, combine, subdivide combine or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) of the Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c), issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries or declare, set aside or pay any dividend or other distribution (whether in cash, stock or securities convertible property or exchangeable therefor)any combination thereof) in respect of the capital stock of the Company or its Subsidiaries, or (iv) purchaseredeem, redeem repurchase or otherwise acquire or offer to purchaseredeem, redeem repurchase, or otherwise acquire any Company Securities or any Company Subsidiary Securities, except for the net settlement declaration, setting aside or payment of any dividends or other distributions by any of its Subsidiaries to the Company Equity Awards or acquisitions to another Subsidiary in the ordinary course of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance business consistent with the terms of the ESPPpast practice;
(c) (i) issue, deliver, deliver or sell, grantor authorize the issuance, announcedelivery or sale of, pledge, transfer, subject to any Lien, otherwise encumber or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company Securities or Company Subsidiary Securities, other than (ix) the issuance of any shares of the Company Common Stock pursuant to (A) upon the terms exercise or the settlement of Company Equity Awards that are outstanding on the date hereof, of this Agreement in accordance with the applicable terms of such Company Equity Awards as in effect thereof on the date of this Agreement Agreement, (y) the issuance of any shares of the Company Stock upon exercise or conversion of shares of Series A Preferred Stock or Equity Linked Convertible Notes in accordance with the terms thereof, and (Bz) grants or awards issuances of Company Securities or Company Equity Awards required to be made pursuant securities of the Company’s Subsidiaries to the terms of existing employment Company or other compensation agreements or arrangements in effect as to wholly owned Subsidiaries of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent Company or (ii) the issuance amend any term of shares of any Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement Security (in each case, whether by merger, consolidation or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Companyotherwise);
(d) mergeincur or commit to any capital expenditures or any obligations or liabilities in respect thereof, consolidate orexcept for (i) those as may be contemplated by the Company’s fiscal 2022 budget and capital expenditure plan made available to Parent prior to the date of this Agreement (whether or not such capital expenditures are made during the Company’s 2022 fiscal year), or (ii) any other than capital expenditures not to exceed $750,000 in the ordinary course of business substantially consistent with past practice, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiariesaggregate;
(e) acquire (i) increase the salary, wages, benefits, bonuses or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture acquisition of stock or assets or otherwise) that), individually involve a purchase price directly or principal amount of not more than $500,000 individually indirectly, any assets (including Intellectual Property Rights, Technology and other intangible assets), securities or $2,000,000 in the aggregatebusinesses, other than one or more (i) acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or materials and similar assets in the ordinary course of business of the Company and its Subsidiaries in amounts substantially a manner that is consistent with past practice;
, (iii) sellpursuant to Contracts in effect on the date of this Agreement, assign, lease, license, pledge, transfer, abandon, subject to (iii) any Lien, permit to lapse or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value other acquisitions for consideration that is not in excess of $500,000 individually or $5,000,000 in the aggregate, except in (iv) acquisitions solely involving one or more of the ordinary course Company and any of its wholly owned Subsidiaries and (v) as contemplated by the Company’s fiscal 2022 budget and capital expenditure plan made available to Parent prior to the date of this Agreement;
(f) sell, assign, license, lease or otherwise transfer, or abandon or create or incur any material Lien on any of the Company’s or its Subsidiaries’ assets (including Intellectual Property Rights, Technology and other intangible assets), securities, properties, interests or businesses in excess of $500,000 in the aggregate, other than (i) sales, leases or transfers in the ordinary course of business substantially consistent with past practice;
, (jii) agree to any exclusivity, non-competition exclusive licenses granted to customers, suppliers, distributors, resellers, channel partners and other third parties in the ordinary course of business consistent with past practices, (iii) Permitted Liens or similar provision or covenant limiting (iv) the ability abandonment of non-material Intellectual Property Rights in the ordinary course of business consistent with past practice; provided, that in no event shall the Company or any of its Subsidiaries to compete assign or engage in grant any line exclusive licenses of business, with any Person Intellectual Property Rights or in any geographic areaTechnology, or pursuant to which grant any benefit other licenses of any Intellectual Property Rights or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made Technology other than non-exclusive licenses granted in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar practices to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereofextent permitted above in Section 6.1(f)(ii), (ii) by for the avoidance of doubt not to include any Applicable Law, including Regulation S-X under the Securities Act, Company Intellectual Property Rights or (iii) by any Governmental Authority Technology which have been assigned or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases granted in the ordinary course of business and except for intercompany loansthe business, guaranteesin each case, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, without Parent’s prior written consent (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, which consent shall not be unreasonably be withheld);
(ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (ivg) make any loanloans, advance advances or capital contribution to contributions to, or investments in, any other Person in excess of $500,000 in the aggregate, other than intercompany indebtedness;
(h) create, incur, suffer to exist or assume any indebtedness for borrowed money or guarantees thereof, other than intercompany indebtedness and as contemplated by the Company’s fiscal 2022 budget and capital contributions and loans to any wholly owned Subsidiary, and extensions expenditure plan set forth on Section 6.1(h) of trade credit the Company Disclosure Letter;
(i) other than in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return in a manner inconsistent business consistent with past practice, enter into any “agreement or arrangement that limits or otherwise restricts in any material respect the Company or any of its Subsidiaries from engaging or competing in any line of business, in any location or with any Person, or would purport to limit, after the Effective Time, Parent or any of its Subsidiaries from engaging or competing in any line of business in any material respect;
(j) other than in the ordinary course of business consistent with past practice (including renewals consistent with the terms thereof), (i) amend or modify in any material respect or terminate (excluding terminations or renewals upon expiration of the term thereof in accordance with the terms thereof) any Company Material Contract or waive, release or assign any material rights, claims or benefits under any Company Material Contract or (ii) enter into any Contract that would have been a Company Material Contract had it been entered into prior to the date of this Agreement;
(k) recognize any new labor organization, union, employee association, trade union, works council or other similar employee representative, or negotiate, enter into, amend, modify or terminate any Collective Bargaining Agreement;
(l) grant or modify any equity or equity-based awards;
(m) except (i) as required pursuant to a Company Plan or a Contract in effect prior to the date of this Agreement, or (ii) as otherwise required by applicable Law, (A) grant or provide any severance, retention or termination payments or benefits to any current or former employee, officer, non-employee director, independent contractor or consultant of the Company or any of its Subsidiaries (including any obligation to gross-up, indemnify or otherwise reimburse any such individual for any Tax incurred by any such individual, including under Section 409A or 4999 of the Code), (B) accelerate the time of payment or vesting of, or the lapsing of restrictions with respect to, or fund or otherwise secure the payment of, any compensation or benefits to any current or former employee, officer, non-employee director, independent contractor or consultant of the Company or any of its Subsidiaries, (C) increase the compensation payable to any current or former employee, officer, non-employee director, independent contractor or consultant of the Company or any of its Subsidiaries, other than routine increases in base salaries or hourly base wage rates, as applicable, to employees in the ordinary course of business consistent with past practice and not in excess of the Company’s 2022 established budget as set forth on Section 6.1(m) of the Company Disclosure Letter, (D) establish, adopt, terminate or amend any Company Plan or any plan, program, arrangement, policy or agreement that would be a Company Plan if it were in existence on the date of this Agreement, (E) hire any employee of the Company or any of its Subsidiaries or engage any other individual to provide services to the Company or any of its Subsidiaries, other than as set forth in Section 6.1(m) of the Company Disclosure Letter, and provided that (1) any such hire(s) that result in an increase of 10% or more of the total Company workforce shall be approved in writing prior to such hire; (2) any such hire will be consistent with past Company practice in connection with the needs of the business of the Company as in effect immediately prior to the date of this Agreement; and (3) any compensation or benefits provided to any newly-hired employees will be on substantially the same terms and conditions as similarly-situated employees of the Company as of the date of this Agreement, (F) terminate the employment of any current employee or the engagement of any individual independent contractor of the Company or any of its Subsidiaries other than for cause or for performance-related reasons or a non-Merger related reason, or (G) promote any employee of the Company or any of its Subsidiaries to a position that reports directly to the Chief Executive Officer of the Company;
(n) knowingly waive, release, limit or condition any restrictive covenant obligation of any current or former employee or independent contractor of the Company or any of its Subsidiaries, in each case that would reasonably be expected to have more than a de minimis adverse effect on the Company and its Subsidiaries, taken as a whole;
(o) change the Company’s methods of financial accounting, except as required by GAAP or in Regulation S-X of the 1934 Act (or any interpretation thereof), any Governmental Authority or applicable Law;
(p) (i) make or change any material election with respect to Taxes, (ii) amend any Tax Return that would have the effect of causing a material amount of Taxes to be due in a taxable period (or portion thereof) following the Closing Date, (iii) agree or settle any claim or assessment in respect of a material amount of Taxes, (iv) agree to an extension or waiver of the limitation period for any claim or assessment in respect of a material amount of Taxes, (v) enter into any closing agreement” agreement within the meaning of Section 7121 of the Code (or any similar provision of state, local local, or non-U.S. lawLaw) in with respect to a material amount of any material Tax, settle any material Tax Proceeding, Taxes or (vi) surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver refund of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;
(o) institute, settle or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of businessTaxes;
(q) fail to maintain adopt or publicly propose a plan of complete or partial liquidation, restructuring, recapitalization or other reorganization, in all each case, of the Company or any material respects any Insurance Policies;
(r) other than in the ordinary course of business or as contemplated by this Agreement (i) amend, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an Affiliate Subsidiary of the Company;
(r) enter into any material interest rate swaps, foreign exchange or other similar hedging arrangements other than for purposes of offsetting a bona fide exposure (including counterparty risk);
(s) voluntarily terminate, amend or fail to renew maintain, allow to lapse or preserve abandon any Company Communications License as set forth on Part 6.01(s) of Owned Intellectual Property Rights or any Intellectual Property Rights that are exclusively licensed to the Company Disclosure Scheduleor any of its Subsidiaries (other than to the extent permitted pursuant to Section 6.1(f) hereof);
(t) conduct settle, offer or propose to settle any reductionProceeding involving or against the Company or any of its Subsidiaries that requires payment by the Company or any of its Subsidiaries in excess of $1 million or that would include any non-in-force monetary relief that would have more than a de minimis adverse effect on the Company and its Subsidiaries, taken as a whole, or commence any Proceeding other than the commencement of employees any Proceeding seeking damages of less than $1 million or other service providers or otherwise implement any layoffs, in each case that could implicate relating to the WARN Acttransactions contemplated hereby; or
(u) authorizeagree, resolve or commit or agree to take do any of the foregoing actionsforegoing. Notwithstanding anything set forth Parent and Merger Sub Inc. acknowledge and agree that: (i) nothing contained in this Agreement shall give Parent or any other documents related Merger Sub Inc., directly or indirectly, the right to control or direct the Merger, Company’s operations prior to the Closing, neither (ii) prior to the Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operations and (iii) notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent nor or Merger Sub shall, directly Inc. shall be required with respect to any matter set forth in this Section 6.1 or indirectly, exercise elsewhere in this Agreement to the extent that the requirement of such consent could violate any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunderapplicable Law. In addition, for the Company sake of clarity, Parent does not have the right to direct and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect control the health and safety of the Company’s or litigation, including any Subsidiary’s employeesdefenses, suppliers, customers and other individuals having business dealings which right remains with the Company or any the applicable Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentenceCompany.
Appears in 3 contracts
Samples: Merger Agreement (U.S. Well Services, Inc.), Merger Agreement (U.S. Well Services, Inc.), Merger Agreement (ProFrac Holding Corp.)
Conduct of the Company. The From the date hereof until the Effective Time, the Company covenants and agrees that, except for matters (i) expressly permitted or expressly contemplated by this Agreement, (ii) set forth on Part 6.01 the Subsidiaries shall conduct their business in the ordinary course consistent with past practice and in compliance with all applicable laws and regulations and shall use their best efforts to preserve intact their business organizations and relationships with third parties and to keep available the services of their present officers and employees. Without limiting the generality of the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken with the prior written consent of Parent (which shall not be unreasonably withheld, conditioned or delayed), (v) required by Applicable Law or the rules and regulations of Nasdaqforegoing, from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereof, the Company (A) shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) conduct its business in the ordinary course in all material respects, substantially consistent with past practice, (2) to the extent consistent with the foregoing clause (1), maintain its business as a going concern and (3) keep available the services of its current officers and key employees and to preserve the goodwill of and maintain satisfactory relationships with those Persons having material business relationships with the Company and its Subsidiaries, and (B) shall not, and shall cause each of its Subsidiaries not toTime:
(a) amend the Company’s Company will not adopt or propose any change in its certificate of incorporation or bylaws, or amend any certificate of incorporation or bylaws, or other comparable charter or organizational documents, of the Company’s Subsidiariesby-laws;
(b) other than except for the Merger, the Company will not, and will not permit any Subsidiary to, merge or consolidate with respect to a direct or indirect wholly owned Subsidiary of the Company, (i) establish a record date for, declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock, property Person or otherwise) in respect of, or enter into any agreement with respect to the voting of, any capital stock acquire a material amount of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), (ii) split, reverse split, combine, subdivide or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) of the Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c), issue or authorize the issuance assets of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), or (iv) purchase, redeem or otherwise acquire or offer to purchase, redeem or acquire any Company Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPPPerson;
(c) issuethe Company will not, deliverand will not permit any Subsidiary to, sell, grantlease, announce, pledge, transfer, subject to any Lien, license or otherwise encumber or dispose of any equity interests of the Company material assets or incur any obligation to make any payments to any Person based on the price or value of any Company Securities, other than property except (i) the issuance of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement existing contracts or (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or commitments and (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company;
(d) merge, consolidate or, other than inventory in the ordinary course of business substantially consistent with past practice, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries;
(e) (i) increase the salary, wages, benefits, bonuses or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
(id) sellthe Company will not, assignand will not permit any Subsidiary to, lease, license, pledge, transfer, abandon, subject to take any Lien, permit to lapse or otherwise dispose action other than the Offer and the Stock Purchase that would constitute a violation of any assets, properties, or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 Section 4.11 (in the aggregatecase of Section 4.11(e)(iv), except in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice;
(j) agree without giving effect to any exclusivity, non-competition or similar provision or covenant limiting the ability of the Company or any of its Subsidiaries to compete or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organizationqualifier);
(le) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company will not, and will not permit any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, Subsidiary to (i) incur, issue, take or otherwise become liable for agree or commit to take any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) action that would make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions representation and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) warranty of the Company Disclosure Schedule;
(o) institutehereunder inaccurate in any material respect at, settle or agree to settle as of any Proceedingstime prior to, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business Effective Time or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than in the ordinary course of business or as contemplated by this Agreement (i) amend, modify, renew or terminateomit, or grant any release agree or waiver undercommit to omit, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an Affiliate of the Company;
(s) voluntarily terminate, amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Act; or
(u) authorize, commit or agree to take any of action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time; and
(f) the foregoing actions. Notwithstanding anything set forth in this Agreement Company will not, and will not permit any Subsidiary to, agree or any other documents related commit to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or do any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentenceforegoing.
Appears in 3 contracts
Samples: Merger Agreement (Hilite Mergeco Inc), Merger Agreement (Maher Donald M), Merger Agreement (Hilite Industries Inc)
Conduct of the Company. The Company covenants and agrees that, except for matters (i) expressly permitted or expressly contemplated by this Agreement, (ii) set forth on Part 6.01 of the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken with the prior written consent of Parent (which shall not be unreasonably withheld, conditioned or delayed), (v) required by Applicable Law or the rules and regulations of Nasdaq, from From the date hereof of this Agreement until the earlier of the Effective Time and the termination of this Agreement Agreement, except (x) as required by Applicable Law, (y) as set forth in accordance with Article 8 hereofSection 6.01 of the Company Disclosure Schedule, or (z) as otherwise required or expressly permitted by this Agreement, unless Parent shall otherwise consent (which consent shall not be unreasonably withheld, conditioned or delayed), the Company (A) shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) to, conduct its business in the ordinary course of business consistent with past practice and in compliance in all material respects, substantially consistent respects with past practice, all Applicable Laws and use its reasonable best efforts to (2A) to the extent consistent with the foregoing clause (1), maintain preserve intact its business as a going concern organization and (3) keep available the services of its current officers and key employees and to preserve the goodwill of and maintain satisfactory relationships with those Persons customers, members, suppliers, licensors, licensees, Governmental Authorities with jurisdiction over the Company’s operations and other Third Parties having material business relationships with the Company and its Subsidiaries, and (B) keep available the services of its present directors, officers and employees and (C) maintain in effect all material Company Permits; provided that neither the Company nor any of its Subsidiaries shall take any action to comply with the foregoing that would breach any of Section 6.01(a) through (t). Without limiting the generality of the foregoing, except (x) as required by Applicable Law, (y) as set forth in Section 6.01 of the Company Disclosure Schedule, or (z) as otherwise required or expressly permitted by this Agreement, without Parent’s prior written consent (which consent shall not be unreasonably withheld, conditioned or delayed (other than with respect to Section 6.01(a), Section 6.01(b), Section 6.01(c), Section 6.01(d), Section 6.01(j)(iii) or Section 6.01(o)), the Company shall not, and shall cause each of its Subsidiaries not to:
(a) amend the Company’s adopt or propose any change to its certificate of incorporation or bylawsincorporation, or amend any certificate of incorporation or bylaws, bylaws or other comparable charter organizational documents (whether by merger, consolidation or organizational documents, of otherwise) (including the Company’s SubsidiariesCompany Organizational Documents);
(b) other than with respect to a direct or indirect wholly owned Subsidiary of the Company, (i) establish merge or consolidate with any other Person, (ii) acquire (including 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, securities or property, other than (A) acquisitions of assets, securities or property in the ordinary course of business consistent with past practice in an amount not to exceed $10,000,000 in the aggregate for all such acquisitions, together with all capital contributions permitted by Section 6.01(h)(i)(B); provided, that no transaction otherwise permitted under this clause (A) shall be permitted if it, individually or in the aggregate, would, or would reasonably be expected to, prevent, enjoin, alter or materially delay the Transactions, (B) acquisitions of securities under the Company’s investment portfolio consistent with the Company’s investment policy in effect as of the date hereof and (C) transactions (1) solely among the Company and one or more of its wholly owned Subsidiaries or (2) solely among the Company’s wholly owned Subsidiaries, or (iii) adopt or publicly propose a record date forplan of complete or partial liquidation, dissolution, recapitalization or restructuring, or resolutions providing for or authorizing such a liquidation, dissolution, recapitalization or restructuring;
(c) (i) split, combine or reclassify any shares of its capital stock (other than transactions (1) solely among the Company and one or more of its wholly owned Subsidiaries or (2) solely among the Company’s wholly owned Subsidiaries), (ii) amend any term or alter any rights of any of its outstanding equity securities, (iii) declare, set aside or pay any dividends on, dividend or make any other distributions distribution (whether in cash, stock, property or otherwiseany combination thereof) in respect ofof any shares of its capital stock or other securities, or enter into any agreement other than (A) in the case of the Company, regular cash dividends in the ordinary course of business consistent with past practice (including with respect to the voting ofrecord and payment dates) in an amount not to exceed $0.31 per share of Company Common Stock per quarter (appropriately adjusted to reflect any stock dividends, any capital stock of the subdivisions, splits, combinations or other similar events relating to Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), (ii) split, reverse split, combine, subdivide or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) of the Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c), issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable thereforCommon Stock), or (iv) purchase, redeem or otherwise acquire or offer to purchase, redeem or acquire any Company Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPP;
(c) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company Securities, other than (i) the issuance of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement or (B) grants dividends or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to distributions by a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company or another a wholly owned Subsidiary of the Company, or (iv) redeem, repurchase, cancel or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any securities of the Company or any Subsidiary of the Company, other than repurchases of shares of Company Common Stock in connection with the exercise of Company Stock Options or the vesting or settlement of Company RSU Awards or Company PSU Awards, in each case outstanding as of the date of this Agreement in accordance with the present terms of the Company Stock Plans and of such Company Stock Options, Company RSU Awards and Company PSU Awards;
(d) mergeissue, consolidate ordeliver or sell, or authorize the issuance, delivery or sale of, any shares of its capital stock or any securities convertible into or exercisable for, or any rights, warrants, options to acquire or other derivative instruments with respect to, any such capital stock or any such convertible securities, other than the issuance of any shares of Company Common Stock upon the exercise of Company Stock Options, the vesting or settlement of shares of Company RSU Awards or Company PSU Awards that are outstanding on the date of this Agreement in accordance with the present terms of the Company Stock Plans and such Company Stock Options, Company RSU Awards and Company PSU Awards;
(e) authorize, make or incur any capital expenditures or obligations or liabilities in connection therewith, other than (i) as set forth in Section 6.01(e) of the Company Disclosure Schedule and (ii) any other capital expenditures not to exceed $5,000,000 in the aggregate;
(f) sell, lease, license or otherwise dispose of any Subsidiary or any division thereof or of the Company or any assets, securities or property, other than (i) in the ordinary course of business consistent with past practice for fair market value in an amount not to exceed $10,000,000 in the aggregate, (ii) dispositions of securities under the Company’s investment portfolio consistent with the Company’s investment policy in effect as of the date hereof, or (iii) transactions (A) solely among the Company and one or more of its wholly owned Subsidiaries or (B) solely among the Company’s wholly owned Subsidiaries;
(g) sell, assign, license, sublicense, abandon, allow to lapse, transfer or otherwise dispose of, create or incur any Lien (other than a Permitted Lien) on or otherwise fail to take any action necessary to maintain, enforce or protect, any Owned Intellectual Property or Licensed Intellectual Property, other than in the ordinary course of business substantially consistent with past practice (i) pursuant to non-exclusive licenses or (ii) for the purpose of disposing of obsolete or worthless assets;
(i) make any material loans, advances or capital contributions to any other Person, other than (A) loans, advances or capital contributions (1) by the Company to one or more of its wholly owned Subsidiaries or (2) by any Subsidiary of the Company to the Company or any wholly owned Subsidiary of the Company or (B) capital contributions required under the terms of Company Material Contracts in effect as of the date hereof and made available to Parent or (ii) (A) incur, assume, guarantee or repurchase any indebtedness for borrowed money (provided that all such indebtedness for borrowed money permitted to be incurred in this clause (ii)(A) must be prepayable at any time by the Company without penalty) or (B) incur any indebtedness for borrowed money with a fixed term unless, in the case of debt with a stated maturity of longer than one year and an option by the Company or any of its Subsidiaries to call or redeem such debt, it provides that such debt may not be redeemed until after the six (6) month anniversary of issuance;
(i) create or incur any Lien (except for a Permitted Lien) on any material asset;
(i) enter into any Company Material Contract (including by amendment of any Contract that is not a Company Material Contract such that such Contract becomes a Company Material Contract), other than in the ordinary course of business consistent with past practice (except that no Company Material Contract pursuant to Section 4.19(a)(i) shall be entered into), (ii) terminate, renew, extend or amend in any material respect any Company Material Contract or waive any material right thereunder, other than in the ordinary course of business consistent with past practice or (iii) enter into, terminate, renew, extend or amend or waive any right under any Related Party Contract (including the XXX Agreement);
(k) terminate, suspend, abrogate, amend or modify any material Company Permit in a manner material and adverse to the Company and its Subsidiaries, taken as a whole;
(l) except as required by (A) Applicable Law or (B) Company Employee Plans as in effect as of the date hereof, (i) grant any change in control, retention, severance or termination pay to (or amend any existing arrangement with) any of their respective current or former Service Providers, (ii) enter into any employment, offer letter, term sheet, deferred compensation or other similar agreement (or any amendment to any such existing agreement) with any of their respective current or former Service Providers, (iii) establish, adopt, amend or enter into any Company Employee Plan or Collective Bargaining Agreement, (iv) grant or amend any equity or equity-based awards to, or discretionarily accelerate the vesting or payment of any such awards held by, any current or former Service Provider, (v) increase the compensation, bonus or other benefits payable to any of their respective current or former Service Providers, (vi) hire any Key Employees or (vii) terminate (other than for cause) any Key Employees;
(m) make any material change in any method of accounting or accounting principles or practice, except for any such change required by GAAP or Regulation S-X under the Securities Exchange Act (“Regulation S-X”), as approved by its independent public accountants;
(i) make or change any Tax election; (ii) change any annual Tax accounting period; (iii) adopt or change any method of Tax accounting; (iv) enter into strategic alliance any material closing agreement with respect to Taxes; or similar legal partnership with (v) settle or surrender any Personmaterial Tax claim, file a voluntary petition for bankruptcy audit or liquidationassessment;
(o) take any action that would materially alter, dissolve, liquidate, restructure increase or recapitalize or adopt a plan or agreement ofdecrease the level of customer funds swept to the TD Subsidiary Banks under the XXX Agreement, or resolutions providing for that would materially alter any terms and conditions currently in place with respect to Customer Accounts under the XXX Agreement;
(p) settle or authorizingcompromise, complete or partial bankruptcypropose to settle or compromise, liquidationany claim, dissolutionaction, mergersuit, consolidationinvestigation, restructuringregulatory examination or proceeding, recapitalization pending or threatened, and involving or against the Company or any of its Subsidiaries, other than those involving only a monetary payment by the Company or any of its Subsidiaries in an amount not to exceed $5,000,000 individually or $25,000,000 in the aggregate; provided, that in no event shall the Company or any of its Subsidiaries settle or compromise, or propose to settle or compromise, without Parent’s prior written consent, (i) any class action or collective action claims or (ii) any other claim, action, suit, investigation, regulatory examination or proceeding (1) that relates to the Transactions, (2) that seeks injunctive or other reorganization equitable relief, or (3) that relates to or asserts (A) patent infringement by the Company or any of its Subsidiaries or (B) patent infringement by a Third Party of any patent owned or controlled by the Company or any of its Subsidiaries;
(eq) (i) increase the salary, wages, benefits, bonuses or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under enter into any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
(i) sell, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregate, except in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice;
(j) agree to any exclusivity, non-competition or similar provision or covenant limiting the ability of transaction between the Company or any of its Subsidiaries to compete or engage in any line of businessSubsidiaries, with any Person or in any geographic areaon the one hand, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or and any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Company’s Affiliates (other than the Company and its Subsidiaries), on the other hand;
(r) after knowingly and intentionally take any action that would reasonably be expected to make any representation or warranty of the Company hereunder inaccurate in any material respect at, or immediately prior to, the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;
(o) institute, settle or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(ps) enter into or materially expand any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than in the ordinary course of business or as contemplated by this Agreement (i) amend, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an Affiliate outside of the Company;
(s) voluntarily terminate, amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;U.S. and its territories; or
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Act; or
(u) authorizeagree, commit or agree publicly propose to take do any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentenceforegoing.
Appears in 3 contracts
Samples: Merger Agreement (Schwab Charles Corp), Merger Agreement (Td Ameritrade Holding Corp), Merger Agreement
Conduct of the Company. The Company covenants and agrees that, except for matters (i) expressly permitted or expressly contemplated by this Agreement, (ii) set forth on Part 6.01 of the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken with the prior written consent of Parent (which shall not be unreasonably withheld, conditioned or delayed), (v) required by Applicable Law or the rules and regulations of Nasdaq, from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereof, the Company (A) shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) conduct its business in the ordinary course in all material respects, substantially consistent with past practice, (2) to the extent consistent with the foregoing clause (1), maintain its business as a going concern and (3) keep available the services of its current officers and key employees and to preserve the goodwill of and maintain satisfactory relationships with those Persons having material business relationships with the Company and its Subsidiaries, and (B) shall not, and shall cause each of its Subsidiaries not to:
(a) amend the Company’s certificate of incorporation or bylaws, or amend any certificate of incorporation or bylaws, or other comparable charter or organizational documents, of the Company’s Subsidiaries;
(b) other than with respect to a direct or indirect wholly owned Subsidiary of the Company, (i) establish a record date for, declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock, property or otherwise) in respect of, or enter into any agreement with respect to the voting of, any capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), (ii) split, reverse split, combine, subdivide or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) of the Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c), issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), or (iv) purchase, redeem or otherwise acquire or offer to purchase, redeem or acquire any Company Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPP;
(c) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company Securities, other than (i) the issuance of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement or (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company;
(d) merge, consolidate or, other than in the ordinary course of business substantially consistent with past practice, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries;
(e) (i) increase the salary, wages, benefits, bonuses or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
(i) sell, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregate, except in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice;
(j) agree to any exclusivity, non-competition or similar provision or covenant limiting the ability of the Company or any of its Subsidiaries to compete or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i6.01(n) of the Company Disclosure Schedule;
(o) institute, settle or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than in the ordinary course of business or as contemplated by this Agreement (i) amend, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an Affiliate of the Company;
(s) voluntarily terminate, amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Act; or
(u) authorize, commit or agree to take any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentence.
Appears in 3 contracts
Samples: Merger Agreement (Alaska Communications Systems Group Inc), Merger Agreement (Alaska Communications Systems Group Inc), Merger Agreement (ATN International, Inc.)
Conduct of the Company. The (a) Except for matters (i) required or expressly permitted by this Agreement, (ii) set forth in Section 6.01 of the Company covenants Disclosure Schedule, (iii) required by Applicable Law, or (iv) undertaken with the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed), from the date hereof until the Effective Time, the Company shall, and agrees thatshall cause each of its Subsidiaries to, (x) conduct its business in all material respects in the ordinary course, consistent with past practice, and (y) use its commercially reasonable efforts to preserve intact its business organization, assets, goodwill and properties and its relationships with customers, vendors, licensors, licensees, Governmental Authorities, employees and others having material business relationships with the Company or any of its Subsidiaries.
(b) Without limiting the generality of the foregoing, except for matters (i) required, expressly permitted or expressly contemplated by this Agreement, (ii) set forth on Part in Section 6.01 of the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measuresrequired by Applicable Law, or (iv) undertaken with the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed), (v) required by Applicable Law or the rules and regulations of Nasdaq, from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereofTime, the Company (A) shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) conduct its business in the ordinary course in all material respects, substantially consistent with past practice, (2) to the extent consistent with the foregoing clause (1), maintain its business as a going concern and (3) keep available the services of its current officers and key employees and to preserve the goodwill of and maintain satisfactory relationships with those Persons having material business relationships with the Company and its Subsidiaries, and (B) shall not, and shall cause each of its Subsidiaries not to:
(ai) amend alter, change, amend, modify, supplement or repeal the Company’s certificate of incorporation or bylawsby-laws, or amend alter, change, amend, modify, supplement or repeal in a manner materially adverse to the Company, any certificate of incorporation or bylawsby-laws, or other comparable charter or organizational documents, of the Company’s Subsidiaries, in each case whether by merger, consolidation, statutory conversion, statutory domestication, division, share exchange, or otherwise;
(bii) other than with respect to a direct or indirect wholly owned Subsidiary of the Company, (iA) establish a record date for, declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stockstock or equity interests, property or otherwise) in respect of, or enter into any agreement with respect to the voting of, any capital stock of the Company or any of its Subsidiaries Subsidiaries, other than dividends and distributions by a direct or indirect wholly-owned Subsidiary of the Company to its parent (including pursuant to Section 6.23); (B) modify or securities convertible repeal the terms of any shares of its capital stock or exchangeable therefor), other equity or voting interest; or (iiC) split, reverse pledge or encumber any shares of its capital stock or other equity or voting interest or cause or permit the same to be subjected to any other Lien;
(iii) (A) split, combine, adjust, subdivide or reclassify or otherwise amend the terms of any capital stock (or securities convertible other equity interest or exchangeable therefor) voting interest of the Company or any of its Subsidiaries, (iiiB) except as expressly otherwise provided in Section 6.01(c6.01(b)(iv), issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or equity interests or voting interests of any of its Subsidiaries (or securities convertible or exchangeable therefor)Subsidiaries, or (ivC) purchase, redeem or otherwise acquire or offer to purchase, redeem or acquire any Company Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Companyto satisfy Tax obligations with respect to Company Equity Awards or in connection with a cashless exercise of Company Stock Options, in each case, in satisfaction by holders of Company Equity Awards outstanding as of the applicable withholding taxes or date of this Agreement and in accordance with the terms of the ESPPthereof;
(civ) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber dispose or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value of grant any Company Securities, other than (iA) the issuance of shares of Company Common Stock upon the exercise of Company Stock Options or Company Warrants or the settlement of Company RSUs or Company PSUs, in all cases, that are outstanding on the date hereof or issued in accordance with Section 6.01(b)(iv) of the Company Disclosure Schedule or with the prior written consent of the Parent, and, in each case in accordance with the applicable terms of such Company Equity Award or Company Warrant, (B) grants or awards of Company Securities required to be made pursuant to the terms of Company Employee Plans in effect as of the date of this Agreement, as set forth in Section 6.01(b)(iv) of the Company Disclosure Schedule, and in accordance with the terms thereof, or (C) the issuance of shares of Company Common Stock pursuant to the ESPP in accordance with its terms, subject to the limitations in Section 2.06(d);
(Av) amend or otherwise modify any of the terms of any outstanding Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement or (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the CompanyAwards;
(dvi) merge, consolidate or, other than in the ordinary course of business substantially consistent with past practice, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, restructuring, merger, consolidation, restructuringdivision, statutory conversion or domestication, share exchange, business combination, reorganization or recapitalization or other reorganization of the Company or any of its Subsidiaries;
(evii) (i) increase the salary, wages, benefits, bonuses or other cash compensation payable or to become payable to the Company’s employeescurrent and former directors, officers, directors employees, or Independent Contractorsother non-employee service providers other than with respect to annual increases in the base salary or wage rate of any employee of the Company or any of its Subsidiaries with annual base compensation of less than $250,000 in the ordinary course of business consistent with past practice, (ii) grant or increase any severance, termination, retention, change in control or similar compensation or benefits of any current or former director, officer, employee or other non-employee service providers of the Company or any of its Subsidiaries with annual base compensation of $250,000 or more, (iii) grant any promotion or take any other action that in either case would result in a Company employee becoming eligible to participate in the Company’s VP+ Change in Control and Severance Plan (other than the individuals set forth in Section 4.17(i) of the Company Disclosure Schedule), (iv) establish, adopt, enter into or amend in any respect any Company Employee Plan (other than amendments to health and welfare plans in connection with annual open enrollment), (v) hire or terminate (other than for cause) any employee or other service provider with (or upon hire who would be expected to have) an annual base compensation of $250,000 or more, (vi) grant any employee of the Company or any of its Subsidiaries any right to reimbursement, indemnification or payment for any Taxes, including any Taxes incurred under Section 409A or Section 4999 of the Code; or (vii) take any action to accelerate any compensation, vesting, rights or benefits under any Company Employee Plan (including with respect to any Company Equity Awards), or fund or in any other way secure the payment of any compensation, rights or benefits under any Company Employee Plan, except for increases (A) as required to be made pursuant to the terms of existing employment any Company Employee Plan in effect on the date hereof or other compensation agreements established after the date hereof not in contravention of Agreement, or arrangements collective bargaining, collective labor or works council agreements, in effect as of the date hereof, (B) required under pursuant to actions taken to effectuate the treatment of the Company Equity Awards and the ESPP pursuant to Section 2.06, including, without limitation, any amendments to the ESPP or (C) as provided in Section 6.01(b)(vii) of the Company Employee Plan Disclosure Schedule;
(viii) voluntarily recognize any labor union or similar entity or enter into, terminate or materially modify any collective bargaining agreement, contract or other written agreement with a labor union or similar entity;
(ix) engage in any “plant closing”, “mass layoff” or other action which would trigger the notice requirements pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereofWARN Act;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(hx) acquire or commit to acquire any division, properties, business, assets, real property assets or capital stock of, of (or otherwise make any loans, advances or capital contribution to investment in) any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a partnership, joint venture venture, share exchange, division, business combination or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate), other than one or more acquisitions in the ordinary course of business, consistent with past practice (i) of inventory, supplies, intellectual property Intellectual Property assets, raw materials, equipment or similar assets assets, or (ii) that, individually or in the ordinary course aggregate, involve a purchase price of business and in amounts substantially consistent with past practicenot more than $5,000,000;
(ixi) sell, assign, lease, license, abandon, pledge, transfer, abandon, subject to any Lien, permit to lapse Lien or otherwise dispose of any assets, properties, or material Company Intellectual Property, in each case having a value in excess of $500,000 individually Property or $5,000,000 in the aggregate, except in the ordinary course of the Company’s any material assets or its Subsidiaries’ business substantially consistent with past practice;
(j) agree to any exclusivity, non-competition or similar provision or covenant limiting the ability material properties of the Company or any of its Subsidiaries to compete or engage in any line of business, with any Person or in any geographic area, or except (i) pursuant to which any benefit Contracts or right would be required commitments existing as of the date hereof, (ii) non-exclusive licenses of Company Intellectual Property to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, technology and other partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially business, consistent with past practice, (yiii) are on terms substantially similar to any such restrictions existing on sales of inventory or used equipment in the date ordinary course of this Agreement and business, consistent with past practice, (ziv) would not have any such effect Permitted Liens, or (or otherwise restrict or bindv) on Parent non-material Company Intellectual Property that the Company or any of its Affiliates (other than the Company and Subsidiaries has permitted to expire or has canceled or abandoned in its Subsidiaries) after the Effective Timereasonable business judgment;
(kxii) adopt make any materially adverse change to (i) any public or posted Privacy Obligation applicable to the Company or any of its Subsidiaries or (ii) the operation or security of any IT Systems, except as required by Applicable Law;
(xiii) change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X promulgated under the Securities Act, Exchange Act or (iii) by any Governmental Authority or quasi-governmental authority (including as otherwise specifically disclosed in the Financial Accounting Standards Board or any similar organization)Company’s reports filed with the SEC prior to the date hereof;
(lxiv) make (other than Tax elections made in the ordinary course consistent with past practice), change, or revoke any material Tax election, change any Tax accounting period or method, file any material amended Company Return, enter into any closing agreement, settle or compromise any audit or other proceeding with respect to any Tax claim or assessment, surrender any right to claim a refund of material Taxes, request any ruling with respect to Taxes, consent to any extension or waiver of the limitation period applicable to any Taxes, or enter into a voluntary disclosure or similar agreement;
(xv) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases Company’s current credit facilities in the ordinary course of business consistent with past practice and except for intercompany loans, guarantees, advance or capital contribution loans between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, incur or otherwise become liable for additional indebtedness for borrowed money or issue or sell debt securities or warrants or other rights to acquire any additional Indebtedness in excess of $5,000,000 in the aggregatedebt securities, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations any indebtedness for borrowed money of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;
(o) institute, settle or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against modify the terms of any material indebtedness existing as of the date hereof in a manner materially adverse to the Company or its Subsidiaries or the ability of Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Subto obtain the Debt Financing;
(pxvi) (A) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than in the ordinary course of business or as contemplated by this Agreement (i) amend, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on it had been entered into prior to the date of this Agreement, (B) renew or extend any Material Contract (or any Contract described by clause (A)), other than renewals or extensions of any expiring contracts without material adverse changes of terms with respect to Company or its Subsidiaries (it being understood that ordinary-course changes to monetary expenditures under any such contracts shall not be deemed to be a material adverse change of terms for this purpose) or (iiC) renew modify or amend in any material respect or terminate (other than any Material Contract (or Contract described by clause (A)) that has expired in accordance with its terms) any Material Contract (or Contract described by clause (A)) or waive any material right, claim, remedy or default under any Material Contract (or Contract described by clause (A)) except, in each case of clauses (A), (B) and (C), in the ordinary course of business, consistent with past practice;
(xvii) settle, release, waive or compromise any pending or threatened Proceeding for an amount (net of insurance proceeds) in excess of $1,000,000 individually or $5,000,000 in the aggregate (other than settlements of any Proceedings for an amount not in excess of the amount, if any, reflected or reserved in the balance sheet (or the notes thereto) of the Company), in each case, that do not involve (A) the imposition of any material restrictions on the business or operations of the Company or any of its Subsidiaries, and (B) any criminal liability, any admission of material wrongdoing or any material wrongful conduct by the Company or any of its Subsidiaries;
(xviii) engage in any transaction with, or enter into any Contract with an agreement, arrangement or understanding with, any Affiliate of the CompanyCompany or other Person covered by Item 404 of Regulation S-K promulgated by the SEC that would be required to be disclosed pursuant to Item 404;
(sxix) voluntarily terminatemake any loans, amend advances or fail capital contributions to, any other Person, except for (i) advances to renew directors, officers and other employees for travel and other business-related expenses, in each case, in the ordinary course of business consistent with past practice and in compliance in all material respects with the Company’s or preserve its Subsidiaries’ policies related thereto; (ii) loans, advances or capital contributions to, any Company Communications License as direct or indirect wholly owned Subsidiaries of the Company; and (iii) in amounts less than $1,000,000 in the aggregate outstanding at any given time;
(xx) (i) make any capital expenditures in excess of $2,000,000 over the aggregate amount of capital expenditures set forth on Part 6.01(sin the Company’s budget set forth in Section 6.01(b)(xx) of the Company Disclosure ScheduleSchedule or (ii) make any single or series of related capital expenditures in excess of $15,000,000;
(txxi) conduct amend, modify, terminate, cancel or let lapse a material insurance or re-insurance policy of the Company or any reduction-in-force of employees its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or other service providers or otherwise implement any layoffslapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing, in each case case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxii) adopt a rights plan, “poison pill” or similar arrangement that could implicate is, or at the WARN ActEffective Time will be, applicable to this Agreement, the Merger or the other transactions contemplated hereby; or
(uxxiii) authorize, commit or agree to take any of the foregoing actions. .
(c) Notwithstanding anything set forth the foregoing, nothing contained in this Agreement shall give to Parent or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shallSub, directly or indirectly, exercise any form rights to control or direct the operations of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, prior to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentenceEffective Time.
Appears in 3 contracts
Samples: Merger Agreement (Tzuo Tien), Merger Agreement (Zuora Inc), Merger Agreement (Slaa Ii (Gp), L.L.C.)
Conduct of the Company. The Company covenants and agrees that, except Except for matters (i) expressly permitted or expressly contemplated and required by this Agreement, (ii) set forth on Part 6.01 of Agreement or as otherwise consented to in advance by the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken with the prior written consent of Parent Purchaser (which shall consent will not unreasonably be unreasonably withheld, conditioned or delayed), (v) required by Applicable Law or the rules and regulations of Nasdaq, from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereofor the date of the Closing, the Company (A) shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) the other Group Companies to, conduct its business in the ordinary course in all material respects, substantially consistent with past practiceOrdinary Course of Business and use its reasonable best efforts to (i) preserve intact its present business organization, (2ii) maintain in effect all of its authorizations or permits from Governmental or Regulatory Authorities necessary to the extent consistent with the foregoing clause (1), maintain conduct its business as a going concern and in the Ordinary Course of Business, (3iii) keep available the services of its current directors, officers and key employees Key Employees, and to preserve the goodwill of and (iv) maintain satisfactory relationships with those Persons its customers, lenders, suppliers and others having material business relationships with it. Without limiting the generality of the foregoing, except for matters expressly contemplated by this Agreement or as otherwise consented to in advance by the Purchaser (which consent will not unreasonably be withheld), the Company and its Subsidiaries, and (B) shall not, and shall cause each not permit any of its Subsidiaries not the other Group Companies to:
(a) amend the Company’s certificate its memorandum and articles of incorporation or bylawsassociation, or amend any certificate of incorporation or bylaws, bylaws or other comparable charter similar organizational documents (whether by merger, consolidation or organizational documents, of the Company’s Subsidiariesotherwise);
(b) other than with respect to a direct or indirect wholly owned Subsidiary of the Company, (i) establish a record date for, declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock, property or otherwise) in respect of, or enter into any agreement with respect to the voting of, any capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), (ii) split, reverse split, combine, subdivide combine or reclassify or otherwise amend the terms any shares of share capital of any capital stock (or securities convertible or exchangeable therefor) of the Group Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c), issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, for shares of its capital stock of the Company or any of its Subsidiaries other securities, (ii) declare, set aside or securities pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of, or convertible into or exchangeable therefor)or exercisable for, or any share capital of any Group Company, (iviii) purchaseredeem, redeem repurchase or otherwise acquire or offer to purchaseredeem, redeem repurchase, or otherwise acquire any Company Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Companyshare capital or (iv) take any action that would result in any amendment, in each case, in satisfaction by holders modification or change of Company Equity Awards any material term of the applicable withholding taxes or in accordance with the terms of the ESPPany Indebtedness;
(c) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company Securities, other than (i) issue, deliver or sell, or authorize the issuance of issuance, delivery or sale of, any shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement or (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment share capital or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent equity interests, or (ii) the issuance amend any term of any shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement share capital or (iii) the issuance of other equity interests of a wholly owned Subsidiary of the Company to the Company (in each case, whether by merger, consolidation or another wholly owned Subsidiary of the Companyotherwise);
(d) merge, consolidate or, other than in the ordinary course of business substantially consistent with past practice, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, any complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiariesreorganization;
(e) (i) increase the salarymake any capital expenditures or incur any liabilities in respect thereof, wages, benefits, bonuses or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractorsin each case in excess of US$1,000,000, except for increases (A) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) those contemplated in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required transactions contemplated by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereofthis Agreement;
(f) hire, engage or terminate the employment or engagement of acquire (other than for cause, as determined by the Companyi) any employee, officer, director, business or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part thereof (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise), or (ii) that, individually involve a purchase price or principal amount of not more any other material assets (other than $500,000 individually or $2,000,000 assets acquired in the aggregateOrdinary Course of Business);
(g) (i) sell, other than one lease, license or more acquisitions otherwise transfer any of inventory, supplies, intellectual property the Group Company’s assets, raw materialssecurities, equipment properties, interests or similar businesses, including any Group Company IP outside the Ordinary Course of Business, or (ii) create any Lien with respect to any of its properties or assets of any Group Company, except statutory Liens for taxes not yet due or payable and Liens that arise in the ordinary course Ordinary Course of business Business and in amounts substantially consistent with past practicedo not materially impair such Group Company’s ownership or use of such property or assets;
(i) sellmake any material change in any compensation arrangement or agreement with any employee, assignofficer, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse director or otherwise dispose shareholder of any assets, propertiesGroup Company, or Company Intellectual Property(ii) establish, in each case having a value in excess of $500,000 individually adopt, enter into or $5,000,000 in the aggregate, except in the ordinary course of the Company’s amend any employee benefit plan or its Subsidiaries’ business substantially consistent with past practiceagreement (other than offer letters that contemplate “at will” employment without severance benefits) or collective bargaining agreement;
(i) hire any employee at or above mid-level management personnel or whose annualized compensation exceeds RMB1,000,000;
(j) agree to (i) repurchase, prepay or incur any exclusivityIndebtedness, non-competition or similar provision or covenant limiting the ability including by way of the Company a guarantee, or any issuance or sale of debt securities or any merger, business combination or other acquisition, or issue and sell options, warrants, calls or other rights to acquire any debt securities of any Group Company, or (ii) make any loans or guarantees made by any Group Company to or for the benefit of its Subsidiaries to compete employees, officers or engage in any line of business, with any Person or in any geographic areadirectors, or pursuant to which any benefit or right would be required to be given or lost as a result members of so competing or engagingtheir immediate families, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company other than travel advances and its Subsidiaries or similar arrangements, that (x) are other advances made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Timebusiness;
(k) adopt terminate or make any material change to a contract or agreement to which any Group Company is a party or any of its assets is subject, other than in the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization)Ordinary Course of Business;
(l) except for borrowings waive or compromise any valuable right or of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution debt owed to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit AgreementGroup Company;
(m) makeany satisfaction or discharge of any Lien or payment of any obligation by any Group Company, except in the Ordinary Course of Business;
(n) make any change in any method of accounting principles, method or revoke practices, except for any material such change required by generally accepted accounting principles or applicable law (in each case following consultation with the Company’s independent auditor);
(o) make or change any Tax election, change any annual Tax tax accounting period, file adopt or change any method of Tax accounting, amend in any material amended respect any Tax Return Returns or file any claims for material Tax Return in a manner inconsistent with past practicerefunds, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceedingtax claim, audit or assessment, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of businessassessment;
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;
(op) institute, settle settle, or agree to settle any Proceedingslegal proceedings pending or threatened before any arbitrator, court or other than (i) the settlement of claims, liabilities Governmental or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of businessRegulatory Authority;
(q) fail to maintain in all material respects enter into any Insurance Policies;new line of business; or
(r) other than in the ordinary course of business or as contemplated by this Agreement (i) amendauthorize, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an Affiliate of the Company;
(s) voluntarily terminate, amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Act; or
(u) authorizeresolve, commit or agree to take do any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions things described in this sentenceSection 4.1.
Appears in 3 contracts
Samples: Share Purchase Agreement (E-House (China) Holdings LTD), Share Purchase Agreement (Jupai Holdings LTD), Share Purchase Agreement (Jupai Holdings LTD)
Conduct of the Company. The Company covenants and agrees that, except for matters (i) expressly permitted or expressly contemplated by this Agreement, (ii) Except as set forth on Part in Section 6.01 of the Company Disclosure Schedule, (iii) reasonably undertaken as expressly contemplated in connection this Agreement or as required by Applicable Law or Governmental Authority, from the date hereof until the Effective Time or the termination of this Agreement in accordance with any COVID-19 Measuresits terms, (iv) undertaken the Company shall, and shall cause each of its Subsidiaries to, conduct its business in the ordinary course and use its commercially reasonable efforts to preserve intact its business organizations and relationships with Third Parties and to keep available the services of its present officers and employees. Without limiting the generality of the foregoing, except with the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned withheld or delayed)) or as expressly contemplated by this Agreement, (v) as required by Applicable Law or the rules and regulations of Nasdaq, from the date hereof until the earlier Governmental Authority or set forth in Section 6.01 of the Effective Time and the termination of this Agreement in accordance with Article 8 hereofCompany Disclosure Schedule, the Company (A) shallshall not, and nor shall cause each it permit any of its Subsidiaries to use commercially reasonable efforts to (1) conduct its business in the ordinary course in all material respects, substantially consistent with past practice, (2) to the extent consistent with the foregoing clause (1), maintain its business as a going concern and (3) keep available the services of its current officers and key employees and to preserve the goodwill of and maintain satisfactory relationships with those Persons having material business relationships with the Company and its Subsidiaries, and (B) shall not, and shall cause each of its Subsidiaries not to:
(a) amend the Company’s certificate its articles of incorporation or bylawsincorporation, or amend any certificate of incorporation or bylaws, bylaws or other comparable charter or similar organizational documents, of the Company’s Subsidiaries;
(b) other than with respect to a direct or indirect wholly owned Subsidiary of the Company, (i) establish a record date forsplit, combine or reclassify any shares of its capital stock, (ii) declare, set aside or pay any dividends on, dividend or make any other distributions distribution (whether in cash, stock, stock or property or otherwiseany combination thereof) in respect of, or enter into any agreement of its capital stock (provided that this clause (ii) shall only apply with respect to the voting of, any capital stock of dividends or other distributions by the Company or any in respect of its Subsidiaries (or securities convertible or exchangeable therefor), (ii) split, reverse split, combine, subdivide or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) of the Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c), issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable thereforstock), or (iviii) purchaseredeem, redeem repurchase or otherwise acquire or offer to purchaseredeem, redeem repurchase, or otherwise acquire any Company Securities or any Company Subsidiary Securities;
(c) (i) issue, deliver or sell, or authorize the issuance, delivery or sale of, any shares of any Company Securities or Company Subsidiary Securities, except for other than the net issuance of (A) any shares of Company Common Stock upon the exercise or settlement of Company Equity Compensatory Awards or acquisitions in accordance with the terms of those Company Compensatory Awards on the date of this Agreement, (B) that number of shares of Company Common Stock by the Company, set forth in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPP;
(cSection 6.01(c) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber or dispose of any equity interests of the Company Disclosure Schedule issuable upon the exercise or incur settlement of Company Compensatory Awards granted by the Company after the date of this Agreement, (C) any obligation to make any payments to any Person based on the price or value of any Company Securities, other than (i) the issuance of shares of Company Common Stock pursuant to (A) upon the terms conversion or exercise of any Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement or (B) grants or awards of Company Securities Preferred Stock or Company Equity Awards required to be made pursuant Warrants and (D) any Company Subsidiary Securities to the terms of existing employment Company or any other compensation agreements or arrangements in effect as Subsidiary of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent Company or (ii) the issuance amend any term of shares of any Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement Security or (iii) the issuance of equity interests of a wholly owned any Company Subsidiary of the Company to the Company or another wholly owned Subsidiary of the CompanySecurity;
(d) mergeacquire (by merger, consolidate orconsolidation, acquisition of stock or assets or otherwise), directly or indirectly, any material amount of assets, securities, properties, interests or businesses, other than (x) pursuant to existing contracts or commitments or (y) in the ordinary course of business;
(e) sell, lease or otherwise transfer any of its material assets, securities, properties, interests or businesses, other than (x) pursuant to existing contracts or commitments or (y) in the ordinary course of business;
(f) other than in connection with actions permitted by Section 6.01(d), make any material loans, advances or capital contributions to, or investments in, any other Person, other than in the ordinary course of business substantially consistent with past practice, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of as between the Company or and any of its Subsidiaries;
(eg) incur any indebtedness for borrowed money or guarantees thereof, other than any indebtedness or guarantee incurred (ix) increase the salary, wages, benefits, bonuses or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
(i) sell, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregate, except in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice;
(j) agree to any exclusivity, non-competition or similar provision or covenant limiting the ability of the Company or any of its Subsidiaries to compete or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any of such wholly-owned Subsidiaries Subsidiaries;
(i) enter into any employment agreement (other than an at-will offer letter), deferred compensation agreement or other similar agreement (or materially amend any such existing agreement), except in connection with any new hires of officers in replacement of existing officer-level positions, (ii) increase benefits payable under any existing severance, change of control or termination pay policies, (iii) establish, adopt or materially amend any collective bargaining, profit-sharing, thrift, pension, retirement, deferred compensation, stock option, restricted stock or other benefit plan or arrangement, (iv) increase compensation payable, in the aggregate, to non-executive employees of the Company or any of its Subsidiaries, or (v) increase compensation payable to any executive officer of the Company, except in the case of each of clauses (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, through (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Companyiv), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify as required by Applicable Law or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments as permitted under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return programs described in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i6.01(h) of the Company Disclosure Schedule;
(oi) institutechange the Company’s methods of accounting, settle except as required by concurrent changes in GAAP or agree in Regulation S-X of the 1934 Act, as agreed to by the Company’s independent public accountants;
(j) settle, or offer or propose to settle any Proceedings, other than (i) the settlement of claimsany material litigation, liabilities investigation, arbitration, proceeding or obligations (A) reserved other claim involving or against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or Subsidiaries, (ii) Proceedings brought any stockholder litigation or dispute against Parent the Company or Merger Sub arising out any of a breach its officers or alleged breach of this Agreement by Parent directors or Merger Sub(iii) any litigation, arbitration, proceeding or dispute that relates to the transactions contemplated hereby;
(pk) make or change any material Tax election, change any material annual Tax accounting period, adopt or materially change any material method of Tax accounting, enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than in the ordinary course of business closing agreement or as contemplated by this Agreement (i) amend, modify, renew or terminatesimilar agreement, or grant settle any release material Tax claim or assessment, consent to any extension or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an Affiliate of the Company;
(s) voluntarily terminatelimitation period applicable to any material audit, claim or assessment in respect of Taxes or amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Actmaterial Tax Return; or
(ul) authorizeagree, resolve or commit or agree to take do any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentenceforegoing.
Appears in 3 contracts
Samples: Merger Agreement, Merger Agreement (Hewlett Packard Co), Merger Agreement (Palm Inc)
Conduct of the Company. The Company covenants and agrees that, except for matters (i) between the date of this Agreement and the Effective Time, unless the Buyer shall have consented in writing or this Agreement expressly permitted contemplates or expressly contemplated by this Agreementpermits, (ii) set forth on Part 6.01 the businesses of the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken with the prior written consent of Parent (which shall not be unreasonably withheld, conditioned or delayed), (v) required by Applicable Law or the rules and regulations of Nasdaq, from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereof, the Company (A) its Material Subsidiaries shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) conduct its business in the ordinary course in all material respects, be conducted in, and the Company and its Material Subsidiaries shall not take any material action except in, the ordinary course of business, and the Company shall use its reasonable best efforts to preserve substantially consistent with past practice, (2) to the extent consistent with the foregoing clause (1), maintain intact its business as a going concern and (3) organization, to keep available the services of its and its Material Subsidiaries' current officers officers, employees and key employees consultants and to preserve the goodwill of its and maintain satisfactory its Material Subsidiaries' relationships with those Persons having material customers, suppliers and other persons with which it or any of its subsidiaries has significant business relationships with relations. By way of amplification and not limitation, except (i) as contemplated by this Agreement or (ii) as set forth in the Company Disclosure Schedule, neither the Company nor any of the Material Subsidiaries shall, between the date of this Agreement and its Subsidiariesthe Effective Time, and (B) shall notdirectly or indirectly do, and shall cause each or propose or agree to do, any of its Subsidiaries not tothe following without the prior written consent of the Buyer:
(a) except to the extent required to comply with its obligations hereunder or required by law, amend or otherwise change the Company’s certificate Certificate of incorporation Incorporation or bylaws, or amend any certificate of incorporation or bylaws, or other comparable charter or organizational documents, Bylaws of the Company’s Subsidiaries;
(b) other than with respect to a direct issue or indirect wholly owned Subsidiary of sell, or authorize the Companyissuance or sale of, (i) establish a record date for, declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock, property or otherwise) in respect of, or enter into any agreement with respect to the voting of, any shares of capital stock of any class of the Company or any of its Subsidiaries the Company Subsidiaries, or any options (other than the grant of options in the ordinary course of business to employees or securities convertible or exchangeable thereforthe grant of options previously disclosed by the Company to Buyer in writing prior to the date of this Agreement including, without limitation, the Company Stock Options/SARs), (ii) split, reverse split, combine, subdivide warrants or reclassify or otherwise amend the terms of any capital stock (or other convertible securities convertible or exchangeable therefor) of the Company or any of its Subsidiaries, the Company Subsidiaries (iii) except as expressly provided in Section 6.01(c), issue or authorize other than the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock (A) in connection with the exercise of options or other rights to purchase Shares outstanding as of the date of this Agreement (including, without limitation, the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), or (ivStock Options/SARs) purchase, redeem or otherwise acquire or offer to purchase, redeem or acquire any Company Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or and in accordance with the terms of the ESPP;
(c) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber such options or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company Securities, other than (i) the issuance of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as rights in effect on the date of this Agreement or (B) grants or awards of Company Securities or Company Equity Awards required otherwise permitted to be made granted pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent this Agreement) or (ii) the issuance any assets of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement it or (iii) the issuance of equity interests of a wholly owned Subsidiary any of the Company to the Company or another wholly owned Subsidiary of the Company;
(d) mergeMaterial Subsidiaries, consolidate or, other than except for sales in the ordinary course of business substantially consistent with past practiceor which, enter into strategic alliance individually or similar legal partnership with in the aggregate, do not exceed $10.0 million;
(c) declare, set aside or pay any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization dividend or other reorganization distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (other than (i) regular quarterly dividends not to exceed $0.05 per Share and (ii) a dividend or distribution payable solely to the Company or a Company Subsidiary);
(d) reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its Subsidiaries;capital stock other than permitted under certain option agreements to effect cashless option exercises.
(e) (i) increase the salaryacquire (for cash or shares of stock) (including, wageswithout limitation, benefitsby merger, bonuses consolidation, or acquisition of stock or assets) any corporation, partnership, other cash compensation payable business organization or to become payable to the Company’s employees, officers, directors any division thereof or Independent Contractorsany assets, except for increases such acquisitions which, individually or in the aggregate, do not exceed $10.0 million; (ii) 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 (A) required to be made pursuant to in connec tion with this Agreement and the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereoftransactions contemplated hereby, (B) required borrowings under any Company Employee Plan pursuant to the terms in effect as existing bank lines of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
(i) sell, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregate, except in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice;
(j) agree to any exclusivity, non-competition or similar provision or covenant limiting the ability of the Company or any of its Subsidiaries to compete or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (vC) the refinancing of existing indebtedness, or (D) indebtedness which, in the aggregate, does not exceed $10.0 million; or (iii) enter into or amend any contract, agreement, commitment or arrangement to effectuate any prohibited matter set forth in this Section 6.01(e);
(f) increase the compensation payable or to become payable to its executive officers or employees, except for increases in the ordinary course of business consistent with past practice;
(g) unless and to the extent the Board exercises its rights under Section 6.04(b) of this Agreement, terminate, amend, modify or waive any provision of any confidentiality or standstill or similar agreement to which the Existing Credit Agreement Company or any of the Company Subsidiaries is a party (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiverthe Confidentiality Agreement (as hereinafter defined), or (vi) other than the regularly scheduled and required amortization payments under standstill provisions of which are hereby waived as to the Existing Credit transactions contemplated by this Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;); or
(mh) make, change or revoke take any material Tax election, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;
(o) institute, settle or agree to settle any Proceedingsaction, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than reasonable and usual actions in the ordinary course of business and consistent with past practice, with respect to accounting policies or as contemplated by this Agreement (i) amend, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an Affiliate of the Company;
(s) voluntarily terminate, amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Act; or
(u) authorize, commit or agree to take any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentenceprocedures.
Appears in 2 contracts
Samples: Merger Agreement (Varlen Corp), Merger Agreement (Amsted Industries Inc /De/)
Conduct of the Company. The Company covenants and agrees that, except for matters (i) expressly permitted or expressly contemplated by this Agreement, (ii) set forth on Part 6.01 of the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken with the prior written consent of Parent (which shall not be unreasonably withheld, conditioned or delayed), (v) required by Applicable Law or the rules and regulations of Nasdaq, from From the date hereof until the earlier of the Effective Time and the termination of Time, except as expressly contemplated by this Agreement in accordance with Article 8 hereofor as required by Applicable Law, the Company (A) shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) to, conduct its business in the ordinary course in all material respects, substantially consistent with past practicepractice and use its reasonable best efforts to (i) preserve intact its present business organization, (2ii) to the extent consistent with the foregoing clause maintain in effect all of its foreign, federal, state and local licenses, permits, consents, franchises, approvals and authorizations, (1), maintain its business as a going concern and (3iii) keep available the services of its current directors, officers and key employees and to preserve the goodwill of and (iv) maintain satisfactory relationships with those Persons its customers, lenders, suppliers and others having material business relationships with it. Without limiting the generality of the foregoing, from the date hereof until the Effective Time, except as expressly contemplated by this Agreement, set forth in Section 6.01 of the Company and its SubsidiariesDisclosure Schedule or as required by Applicable Law, and (B) the Company shall not, and nor shall cause each it permit any of its Subsidiaries not to:
(a) amend the Company’s certificate its articles of incorporation or bylawsincorporation, or amend any certificate of incorporation or bylaws, bylaws or other comparable charter similar organizational documents (whether by merger, consolidation or organizational documents, of the Company’s Subsidiariesotherwise);
(b) other than with respect to a direct or indirect wholly owned Subsidiary of the Company, (i) establish a record date forsplit, combine or reclassify any shares of its capital stock, (ii) declare, set aside or pay any dividends on, dividend or make any other distributions distribution (whether in cash, stock, stock or property or otherwiseany combination thereof) in respect ofof its capital stock, or enter into any agreement with respect to the voting of, any capital stock of the Company or except for dividends by any of its wholly-owned Subsidiaries (or securities convertible or exchangeable therefor), (ii) split, reverse split, combine, subdivide or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) of the Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c)redeem, issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), or (iv) purchase, redeem repurchase or otherwise acquire or offer to purchaseredeem, redeem repurchase, or otherwise acquire any Company SecuritiesSecurities or any Company Subsidiary Securities (other than the acquisition of Company Securities tendered by employees or former employees in connection with a cashless exercise of Company Stock Options or in order to pay taxes, except or for the net settlement Company to satisfy withholding obligations in respect of such taxes, in connection with the exercise of Company Equity Awards Stock Options or acquisitions the lapse of shares restrictions in respect of Company Common Restricted Stock by the CompanyAwards, in each casecase pursuant to the terms of the Company Employee Plans);
(c) (i) issue, in satisfaction by holders deliver or sell, or authorize the issuance, delivery or sale of, any Company Securities or Company Subsidiary Securities, other than the issuance of (A) any shares of the Company Stock upon the exercise of Company Equity Awards Stock Options that are outstanding on the date of the applicable withholding taxes or this Agreement in accordance with the terms of those options on the ESPP;
date of this Agreement and (cB) issue, deliver, sell, grant, announce, pledge, transfer, subject any Company Subsidiary Securities to the Company or any Lien, otherwise encumber or dispose of any equity interests other Subsidiary of the Company or incur (ii) amend any obligation to make any payments to any Person based on the price or value term of any Company SecuritiesSecurity or any Company Subsidiary Security (in each case, whether by merger, consolidation or otherwise);
(d) incur any capital expenditures or any obligations or liabilities in respect thereof, except for (i) those contemplated by the capital expenditure budget set forth in Section 6.01(d) of the Company Disclosure Schedule and (ii) any unbudgeted capital expenditures not to exceed $500,000 individually or $2,000,000 in the aggregate;
(e) acquire (by merger, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, any assets, securities, properties, interests or businesses, other than (i) supplies in the issuance ordinary course of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement or (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as business of the date hereof; provided Company and its Subsidiaries in a manner that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or is consistent with past practice and (ii) capital expenditures permitted by Section 6.01(d);
(f) other than sales of inventory or obsolete equipment in the issuance ordinary course of shares business consistent with past practice, sell, lease or otherwise transfer, or create or incur any Lien on, any of Company Common Stock under the ESPP and pursuant Company’s or its Subsidiaries’ assets, securities, properties, interests or businesses if the value of the assets included in any such transaction would exceed $500,000 or the aggregate value of the assets included in all such transaction would exceed $1,000,000;
(g) other than in connection with actions permitted by Section 6.01(d) or Section 6.01(e), make any loans, advances or capital contributions to, or investments in, any other Person;
(h) create, incur, assume, suffer to the terms exist or otherwise be liable with respect to any Indebtedness for borrowed money or guarantees thereof and Section 2.06 of this Agreement or having an aggregate principal amount (iii) the issuance of equity interests of a wholly owned Subsidiary together with all other Indebtedness for borrowed money of the Company to the Company or another wholly owned Subsidiary of the Company;
(dand its Subsidiaries) merge, consolidate or, outstanding at any time greater than $2,500,000 other than in the ordinary course of business substantially and in amounts and on terms consistent with past practice, practices;
(i) (i) enter into strategic alliance any contract, agreement, arrangement or similar legal partnership with understanding that would have been a Material Contract if it had been in effect on the date hereof or (ii) enter into, amend or modify in any Personmaterial respect or terminate any Company Lease or Material Contract or otherwise waive, file a voluntary petition for bankruptcy release or liquidationassign any material rights, dissolve, liquidate, restructure claims or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization benefits of the Company or any of its Subsidiaries;
(ej) (i) increase the salary, wages, benefits, bonuses or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required with respect to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, officer or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
(i) sell, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregate, except in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice;
(j) agree to any exclusivity, non-competition or similar provision or covenant limiting the ability employee of the Company or any of its Subsidiaries Subsidiaries, (x) grant or increase any severance or termination pay to compete (or engage amend any existing severance pay or termination arrangement) or (y) enter into any employment, deferred compensation or other similar agreement (or amend any such existing agreement), (B) increase benefits payable under any existing severance or termination pay policies, (C) establish, adopt or amend in any line of business, with any Person material respect or in a manner that would increase the costs and benefits of, any geographic areacollective bargaining, bonus, profit-sharing, thrift, pension, retirement, deferred compensation, stock option, restricted stock or pursuant other benefit plan or arrangement or (D) increase compensation, bonus or other benefits payable to which any benefit or right would be required to be given or lost as a result employee of so competing or engaging, or which would have any such effect on Parent the Company or any of its Affiliates after the Effective TimeSubsidiaries, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made except for annual merit increases in the ordinary course of business substantially consistent with past practicepractice in an amount not to exceed (x) with respect to employees who are eligible for the Company’s annual bonus program, 3% of the base salaries of such employees on an aggregate basis, (y) with respect to employees who are not eligible for the Company’s annual bonus program, 5% of the base salaries of such employees on terms substantially similar an aggregate basis and (z) with respect to any the Company’s executive officers, 3% of the base salaries of such restrictions existing executive officers on an aggregate basis, in each case above except (1) to the extent required by Applicable Law, (2) to the extent required by the Company Employee Plans as in effect on the date hereof, (3) for the payment of bonuses and other incentive compensation to its employees as part of its normal year-end compensation process following completion of the Company’s 2009 fiscal year, based on actual results and in accordance with the target bonus amount and bonus plan approved by the Company’s Board of Directors and provided to Parent prior to the date of this Agreement and (z4) would not have any such effect (or otherwise restrict or bind) for the establishment of a retention program for its employees in connection with the transactions contemplated by this Agreement on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(ion Section 6.01(j) of the Company Disclosure Schedule;
(ok) institutepromote, settle change the title of or agree to settle change the reporting responsibilities of any Proceedingsemployee, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than each case except in the ordinary course of business consistent with past practice;
(l) change the Company’s methods of accounting, except as required by concurrent changes in GAAP or in Regulation S-X of the 1934 Act, as contemplated agreed to by this Agreement its independent public accountants;
(m) settle, or offer or propose to settle, (i) amendany material litigation, modifyinvestigation, renew arbitration, proceeding or terminate, other claim involving or grant against the Company or any release or waiver under, any Material Contract (excluding of its Subsidiaries if the expiration sum of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on such settlement and all other settlements made after the date of this AgreementAgreement would exceed $100,000, or (ii) renew any stockholder litigation or enter into dispute against the Company or any Contract with an Affiliate of its officers or directors or (iii) any litigation, arbitration, proceeding or dispute that relates to the Companytransactions contemplated hereby;
(sn) voluntarily terminate, amend take any action that would make any representation or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) warranty of the Company Disclosure Schedule;
(t) conduct hereunder, or omit to take any reduction-in-force action necessary to prevent any representation or warranty of employees the Company hereunder from being, inaccurate in any respect at, or other service providers or otherwise implement as of any layoffstime before, in each case that could implicate the WARN ActEffective Time; or
(uo) authorizeagree, resolve or commit or agree to take do any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentenceforegoing.
Appears in 2 contracts
Samples: Merger Agreement (Equinix Inc), Merger Agreement (Switch & Data Facilities Company, Inc.)
Conduct of the Company. Pending the Merger. The Company covenants and agrees that, during the period from the date hereof until the Effective Time, except for matters (i) expressly permitted as contemplated by this Agreement or expressly as required by applicable law, or unless Parent shall otherwise agree in writing, the business of the Company and its subsidiaries shall be conducted in its ordinary course and consistent with past practice and the Company shall use its reasonable best efforts to preserve intact its business organization, and to preserve its present relationships and goodwill with employees, clients, suppliers, creditors, lessors, business associates and other persons with which it has significant business relations. Between the date of this Agreement and the Effective Time, except as otherwise contemplated by this Agreement, (ii) as required by applicable law, or as set forth on Part 6.01 in the corresponding section of the Company Disclosure Schedule, (iii) reasonably undertaken in connection with neither the Company nor any COVID-19 Measures, (iv) undertaken with of its subsidiaries shall without the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned withheld or delayed), (v) required by Applicable Law or the rules and regulations of Nasdaq, from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereof, the Company (A) shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) conduct its business in the ordinary course in all material respects, substantially consistent with past practice, (2) to the extent consistent with the foregoing clause (1), maintain its business as a going concern and (3) keep available the services of its current officers and key employees and to preserve the goodwill of and maintain satisfactory relationships with those Persons having material business relationships with the Company and its Subsidiaries, and (B) shall not, and shall cause each of its Subsidiaries not to:):
(a) amend the Company’s certificate or otherwise change its Certificate of incorporation Incorporation or bylaws, By-laws or amend any certificate of incorporation or bylaws, or other comparable charter or organizational documents, of the Company’s Subsidiariessimilar governing instruments;
(b) issue, deliver, sell, pledge, dispose of or encumber any shares of capital stock, ownership interests or voting securities, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of capital stock, any other ownership interests or any voting securities (including but not limited to stock appreciation rights, phantom stock or similar instruments), of the Company or any of its subsidiaries (except for the issuance of Common Shares and Class B Shares issuable in accordance with the terms of outstanding Company Stock Options, the Convertible Debentures or Class B Common Stock, and grants to employees of the Company and its subsidiaries, other than with respect to a direct those identified in Schedule 5.1(b) or indirect wholly owned Subsidiary any executive officer of the Company, of (i) establish options to purchase the equivalent of up to the number of Company Shares set forth in Section 5.1(b) of the Company Disclosure Schedule in the aggregate, as described below, or (ii) grants of an aggregate of up to the equivalent of the number of restricted Company Shares set forth in Section 5.1(b) of the Company Disclosure Schedule, as described below). The Company shall make such option or restricted stock grants by delivering a record date forbinding written commitment, which Parent hereby agrees to honor, that, as of the Effective Time, option or restricted stock grants, as the case may be, shall be made by Parent with respect to Parent Ordinary Shares or Parent Depository Shares (as applicable) equal to the number of Company Shares specified in the written commitment (subject to the maximums with respect to Company Shares set forth in Section 5.1 of the Company Disclosure Schedule), multiplied by the appropriate Exchange Ratio. The strike price of any such option shall be determined by reference to the fair market value of a Parent Ordinary Share or Parent Depository Share (as applicable) as of the Effective Time; provided that, to the extent a grant of such option as of the Effective Time would result in a violation of applicable law, such grant shall occur as soon as practicable thereafter;
(c) declare, set aside aside, make or pay any dividends ondividend or distribution, or make any other distributions (whether payable in cash, stock, property or otherwise) in respect of, or enter into any agreement with respect to any of its capital stock, other ownership interests or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of capital stock, or any other ownership interests (except for (i) regular quarterly cash dividends on Company Common Stock of no more than $1.00 per Share, (ii) any dividend or distribution paid to the voting ofCompany or a wholly-owned subsidiary of the Company or any other dividend or distribution required to be made by a subsidiary of the Company pursuant to the terms of the outstanding capital stock, ownership interests or securities of or stockholder agreements relating to, such subsidiary outstanding as of the date of this Agreement, or (iii) dividends or distributions on the Convertible Debentures in accordance with their terms);
(d) reclassify, combine, split, subdivide, redeem, purchase or otherwise acquire any shares of capital stock or other ownership interests of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), (ii) split, reverse split, combine, subdivide or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) of the Company subsidiaries or any of its Subsidiariessecurities convertible, (iii) except as expressly provided in Section 6.01(c), issue exchangeable or authorize the issuance of exercisable for or into any other securities in respect of, in lieu of or in substitution for, such shares of capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), or (iv) purchase, redeem or otherwise acquire or offer to purchase, redeem or acquire any Company Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPP;
(c) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company Securitiesother ownership interests, other than (i) the issuance acquisitions of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereof, in accordance with the Restricted Shares at their applicable terms of such Company Equity Awards as in effect on the date of this Agreement or (B) grants or awards of Company Securities or Company Equity Awards required to be made original cost pursuant to the terms of existing any Company Stock Plan or any employment or other compensation agreements or arrangements agreement listed in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (iiSection 3.10(a) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to Disclosure Schedule, or engage in any internal reorganization or restructuring of the ownership structure of the subsidiaries, businesses and divisions of the Company or another wholly owned Subsidiary of the Companyand its subsidiaries);
(di) mergepurchase, consolidate orlease or license from any person, or otherwise acquire (whether by merger, consolidation, reorganization, consolidation, share exchange, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or equity or other ownership interests therein or any other assets other than (v) purchases, leases or licenses of assets not constituting a business or a material equity interest in a business in the ordinary course of business substantially consistent with past practice, enter into strategic alliance (w) purchases and acquisitions of businesses for consideration not exceeding the amount set forth in Section 5.1(e) of the Company Disclosure Schedule in the aggregate, (x) purchases and acquisitions of additional equity interests in subsidiaries of the Company and in entities the results of which were reflected on the Company's most recent audited financial statements under the equity method of accounting for consideration not exceeding the amount set forth in Section 5.1(e) of the Company Disclosure Schedule in the aggregate, (y) capital expenditures permitted by clause (viii) below or similar legal partnership with (z) leases of real property having a term not to exceed five years and under which the Company and its subsidiaries will not be required to make rental and/or other payments exceeding the amount set forth in Section 5.1(e) of the Company Disclosure Schedule in the aggregate in any Personyear; (ii) sell, file a voluntary petition for bankruptcy lease or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement oflicense to any person, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, otherwise dispose of (whether by merger, consolidation, restructuringreorganization, recapitalization consolidation, share exchange, acquisition of stock or assets or otherwise) any corporation, partnership or other reorganization of the Company business organization or division thereof or equity or other ownership interests therein or any other assets other than dispositions of its Subsidiaries;
(e) (i) increase the salaryshort-term money market or similar investments and sales, wages, benefits, bonuses leases or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms licenses of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made fixed assets in the ordinary course of business and substantially consistent with past practicepractice so long as the fixed assets subject to sale, lease or license do not have a fair market value greater than the amount set forth in Section 5.1(e) of the Company Disclosure Schedule in the aggregate; (iii) (x) incur or modify in any material respect the terms of (A) any indebtedness for borrowed money or (DB) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made any other liability except in the ordinary course of businessbusiness or (y) assume, and (ii) other than guarantee or endorse, or otherwise as required by an accommodation become responsible for, the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding obligations of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock ofperson, or make any loans, advances or capital contribution to contributions to, or investments in, any Person or division thereof, whether in whole or in part other person (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions to a wholly-owned subsidiary of inventorythe Company), supplies, intellectual property assets, raw materials, equipment or similar assets provided that the Company and its subsidiaries may in the ordinary course of business and in amounts substantially consistent with past practice;
practice (iI) sell, assign, lease, license, pledge, transfer, abandon, subject make borrowings in an amount not to any Lien, permit exceed the amount set forth in Section 5.1(e) of the Company Disclosure Schedule in the aggregate under their existing credit facilities to lapse fund working capital needs or otherwise dispose (II) cause the issuance of any assets, properties, or letters of credit so long as all such letters of credit do not exceed the amount set forth in Section 5.1(e) of the Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 Disclosure Schedule in the aggregate, except in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice;
; (jiv) agree to any exclusivity, non-competition or similar provision or covenant limiting the ability of the Company or any of its Subsidiaries to compete or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made other than in the ordinary course of business substantially consistent with past practice, but subject to clause (yv) are on terms substantially similar below, enter into, amend in any material respect, terminate (including by failing to renew), cancel, materially extend, or request any material change in, or agree to any such restrictions existing on the date of this Agreement and material change in, or waive, release or assign any material right or claim under, any Material Contract; (zv) would not have enter into, amend in any such effect (material respect, extend or otherwise restrict or bind) on Parent replace any affiliation arrangement or any of its Affiliates material Contract with respect to any joint venture or strategic alliance; (other than vi) amend, extend or replace any Contract or Contracts with any client under which the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement subsidiaries received aggregate prior year annual fees and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness commissions in excess of $5,000,000 the amount set forth in Section 5.1(e) of the Company Disclosure Schedule under such Contract or Contracts, unless such Contract or Contracts as so amended, extended or replaced, does not contain terms that, in the aggregate, (ii) modify in a manner are materially adverse less favorable to the Company or its Subsidiaries subsidiaries than the terms of Contract or Contracts being amended, extended or replaced; (vii) enter into any material Indebtedness existing as of Contract or Contracts with any new client under which the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution Company and its subsidiaries expect to any Person receive annual fees and commissions in excess of $500,000 the amount set forth in Section 5.1(e) of the Company Disclosure Schedule in any year under such Contract or Contracts, unless the Contract is on terms that are, in the aggregate, not materially less favorable to the Company or its subsidiaries than similar Contracts (in terms of scope of services being provided and annual fees and commissions expected to be received) previously entered into by the Company or its subsidiaries; or (viii) authorize or make any capital expenditures, other than capital contributions for improvements of existing facilities and loans to any wholly owned Subsidiary, for the acquisition of information technology and extensions of trade credit except as provided in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i5.1(e) of the Company Disclosure Schedule;
(of) instituteincrease the compensation or benefits of any of its directors, settle officers or agree to settle any Proceedings, other than employees (iexcept as set forth in Section 5.1(f) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in Disclosure Schedule) or, except to the extent required under any Company SEC Documents Plan, establish, adopt, enter into, or (B) involving payments of less than $500,000 individually amend or $1,000,000 in terminate any Company Plan, including any employment agreement or severance arrangement, or make any new allocations under the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle SMIPs or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than in the ordinary course of business or as contemplated by this Agreement (i) amend, modifyadjust or modify any allocations previously made under the SMIPs, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract except as provided in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an Affiliate of the Company;
(s) voluntarily terminate, amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(sSection 5.1(f) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Act; or
(u) authorize, commit or agree to take any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentence.
Appears in 2 contracts
Samples: Merger Agreement (Grey Global Group Inc), Merger Agreement (WPP Group PLC)
Conduct of the Company. The Company covenants and agrees that, except for matters (i) expressly permitted or expressly contemplated by this Agreement, (ii) set forth on Part 6.01 of From the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken with the prior written consent of Parent (which shall not be unreasonably withheld, conditioned or delayed), (v) required by Applicable Law or the rules and regulations of Nasdaq, from the date hereof Original Merger Agreement Date until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereofTime, the Company (A) shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) to, conduct its business in the ordinary course and in material compliance with all material respectsApplicable Laws and material Governmental Authorizations, substantially consistent with past practice, and use its reasonable best efforts to (2i) to the extent consistent with the foregoing clause (1), maintain preserve intact its business as a going concern organization and relationships with Third Parties, and (3ii) keep available the services of its current officers and key employees and to preserve employees. Without limiting the goodwill generality of and maintain satisfactory relationships with those Persons having material business relationships with the foregoing, from the Original Merger Agreement Date until the Effective Time, except (A) as expressly contemplated by this Agreement or set forth in Section 7.01 of the Company and its SubsidiariesDisclosure Schedule, and or (B) shall not, and shall cause each of its Subsidiaries as Parent may approve in writing (such approval not to:to be unreasonably withheld or delayed):
(a) amend the Company’s Company shall not adopt or propose any change in its certificate of incorporation or bylaws, or amend any certificate of incorporation or bylaws, or other comparable charter or organizational documents, of the Company’s Subsidiaries;
(b) other than with respect to a direct or indirect wholly owned Subsidiary of the Company, Company shall not (i) establish a record date for, declare, set aside or pay any dividends on, dividend or make any other distributions distribution (whether in cash, stock, property or otherwiseany combination thereof) in respect ofof any shares of its capital stock, (ii) make any tender or exchange offer for Company Stock at a premium to the then-existing market price of such Company Stock, (iii) split, combine or reclassify any shares of its capital stock, or enter into any agreement with respect to (iv) issue, deliver or sell, or authorize the voting issuance, delivery or sale of, any shares of its capital stock, other than (A) the issuance of any shares of Company Stock upon the exercise of stock options in accordance with their terms as of October 2, 2005, (B) issuances pursuant to the exercise of warrants outstanding on the Original Merger Agreement Date, (C) the granting (or any subsequent exercise thereof) of options to acquire shares of Company Stock or restricted shares of Company Stock in the ordinary course of business (which shall include grants pursuant to the Company Stock Plans), and (D) issuances of stock or grants of stock options (or other stock-based compensation) in connection with any merger, acquisition or other business combination, or other material transaction that, in any such case, does not require any approval of the Company’s stockholders, provided that, for the sake of clarity, neither this Section 7.01(b) nor Section 7.01(f) shall preclude the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), (ii) split, reverse split, combine, subdivide or reclassify or otherwise amend the terms of from entering into any capital stock (or securities convertible or exchangeable therefor) of the Company or agreement with respect to any of its Subsidiaries, (iii) except as expressly provided transaction referred to in Section 6.01(c), issue 7.01(b)(iv)(D) (regardless of whether or authorize not the issuance of any other securities stock in respect of, in lieu of or in substitution for, shares of capital stock connection therewith would require the approval of the Company or Company’s stockholders) as long as the record date for any of its Subsidiaries (or securities convertible or exchangeable therefor), or (iv) purchase, redeem or otherwise acquire or offer to purchase, redeem or acquire any Company Securities, except for requisite stockholders vote required in connection therewith occurs after the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPPEffective Time;
(c) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber or dispose of any equity interests of the Company or incur shall not adopt any obligation to make any payments to any Person based on the price or value of any Company Securities, other than (i) the issuance of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement or (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company;
(d) merge, consolidate or, other than in the ordinary course of business substantially consistent with past practice, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, of complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other material reorganization or propose any resolution for its winding-up, striking-off or dissolution or apply to any court for an administration order or the appointment of a receiver, trustee or similar officer or commence any negotiations to enter into any arrangement with or composition for the benefit of creditors (including any moratorium prior to a voluntary arrangement);
(d) the Company or shall not, and shall not permit any of its SubsidiariesSubsidiaries to, enter into any transaction that would reasonably be expected to materially delay the completion of the Merger;
(e) (i) increase the salaryCompany shall not, wagesand shall not permit any of its Subsidiaries to, benefits, bonuses or other cash compensation payable or take any action that is reasonably likely to become payable result in any of the conditions to the Company’s employees, officers, directors Merger set forth in Section 9.03(a) or Independent Contractors, except for increases (ASection 9.03(b) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollmentnot being satisfied; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;or
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire Company shall not agree or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
(i) sell, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregate, except in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice;
(j) agree to any exclusivity, non-competition or similar provision or covenant limiting the ability of the Company or any of its Subsidiaries to compete or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change do any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;
(o) institute, settle or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than in the ordinary course of business or as contemplated by this Agreement (i) amend, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an Affiliate of the Company;
(s) voluntarily terminate, amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Act; or
(u) authorize, commit or agree to take any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentenceforegoing.
Appears in 2 contracts
Samples: Agreement and Plan of Merger (NTL Inc), Agreement and Plan of Merger (Telewest Global Inc)
Conduct of the Company. The Company covenants and agrees thatFrom the date of this Agreement until the Effective Time, except for matters (i) expressly permitted or expressly contemplated by this Agreement, (ii) set forth on Part 6.01 of the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken with the prior written consent of Parent (which shall such consent not to be unreasonably withheld, conditioned or delayed), (v) as expressly permitted or required by Applicable Law this Agreement, as may be required by applicable law or as set forth in Section 5.1 of the rules Company Disclosure Schedules, the Company and regulations its Subsidiaries shall conduct their business (x) in the ordinary course consistent with past practice; provided, that this Section 5.1(x) shall not prohibit the Company and its Subsidiaries from taking commercially reasonable actions outside of Nasdaqthe ordinary course or not consistent with past practice in response to (A) changes or developments resulting from (1) changes in commodity prices or (2) the COVID-19 pandemic or (B) other changes or developments that would reasonably be expected to cause a reasonably prudent company similar to the Company to take commercially reasonable actions outside of the ordinary course consistent with past practice and (y) in a manner not involving the entry by the Company or its Subsidiaries into businesses that are materially different from the businesses of the Company and its Subsidiaries on the date hereof, and shall use their commercially reasonable efforts to preserve intact their business organizations and relationships with third parties. Without limiting the generality of the foregoing, except with the prior written consent of Parent (such consent not to be unreasonably withheld, conditioned or delayed), as expressly permitted or required by this Agreement, as may be required by applicable law or as set forth in Section 5.1 of the Company Disclosure Schedules, from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereof, the Company (A) shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) conduct its business in the ordinary course in all material respects, substantially consistent with past practice, (2) to the extent consistent with the foregoing clause (1), maintain its business as a going concern and (3) keep available the services of its current officers and key employees and to preserve the goodwill of and maintain satisfactory relationships with those Persons having material business relationships with the Company and its Subsidiaries, and (B) shall not, and shall cause each of its Subsidiaries not toTime:
(a) amend the Company’s Company will not, and will not permit any of its Subsidiaries to, adopt or propose any change in its certificate of incorporation or bylaws, or amend any certificate of incorporation or bylaws, or other comparable charter or organizational documents, of the Company’s Subsidiariesby-laws;
(b) other than with respect to a direct or indirect wholly owned Subsidiary of the Company, (i) establish a record date for, declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock, property or otherwise) in respect of, or enter into any agreement with respect to the voting of, any capital stock of the Company or will not, and will not permit any of its Subsidiaries (or securities convertible or exchangeable therefor), (ii) split, reverse split, combine, subdivide or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) of the Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c), issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), or (iv) purchase, redeem or otherwise acquire or offer to purchase, redeem or acquire any Company Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPP;
(c) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company Securities, other than (i) the issuance of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement or (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company;
(d) mergeto, consolidate or, other than in the ordinary course of business substantially consistent with past practice, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, of complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries;
(ec) the Company will not, and will not permit any Subsidiary of the Company to, issue, sell, transfer, pledge, dispose of or encumber any shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any class or series of the Company or its Subsidiaries other than issuances (i) increase pursuant to the salaryexercise of convertible securities outstanding on the date hereof or (ii) pursuant to stock based awards or options that are outstanding on the date hereof and reflected in Section 3.5;
(d) the Company will not, wagesand will not permit any Subsidiary of the Company to, benefits(i) split, bonuses combine, subdivide or reclassify its outstanding shares of capital stock, or (ii) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock other than (A) regular quarterly cash compensation dividends or distributions payable by the Company or such Subsidiary consistent with past practice, which, (1) in the case of the Company, will not exceed $0.02 per share of Company Common Stock per fiscal quarter, and (2) in the case of the MLP, will not include any special dividend, or (B) dividends paid by any Subsidiary of the Company to become payable to the Company or any wholly-owned Subsidiary of the Company; provided, however, that the Company shall not declare, set aside or pay any dividend except in accordance with Section 7.11;
(e) the Company will not, and will not permit any Subsidiary of the Company to, redeem, purchase or otherwise acquire directly or indirectly any of the Company’s employees, officers, directors or Independent Contractorsany Subsidiary’s capital stock, except for increases repurchases, redemptions or acquisitions (Ax) required to be made pursuant to by the terms of existing employment its capital stock or other compensation agreements any securities outstanding on the date hereof or arrangements (y) required by or in effect connection with the respective terms, as of the date hereof, (B) required under of any Company Employee Benefit Plan pursuant to the terms or any dividend reinvestment plan as in effect as of on the date hereof in the ordinary course of the operations of such plan consistent with past practice and only to the extent consistent with Section 7.4;
(f) the Company will not amend the terms (including the terms relating to accelerating the vesting or Collective Bargaining Agreement lapse of repurchase rights or under Applicable Lawobligations) of any outstanding options to purchase shares of Company Common Stock or of any outstanding awards of restricted stock, stock units or stock appreciation rights (which, it is understood, will not limit the administration of the relevant plans governing such awards in accordance with past practices and interpretations of the Company’s Board of Directors and the Company’s Compensation Committee to the extent consistent with Section 7.4);
(g) the Company will not, and will not permit any Subsidiary of the Company (other than the MLP) to, make or authorize any capital expenditures except in amounts that are not in excess of 110% of the individual line items of the capital budget set forth in Section 5.1(g) of the Company Disclosure Schedules (the “Capital Budget”); provided, however, the MLP shall not make or authorize capital expenditures outside the ordinary course of business consistent with past practice;
(h) the Company will not, and will not permit any Subsidiary of the Company to, (C1) made increase the compensation or benefits of any director, officer or employee, except for normal increases in the ordinary course of business and substantially consistent with past practicepractice or as required under applicable law or any Company Benefit Plan existing on the date hereof, or (D2) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business(i) enter into, and (ii) adopt or (iii) extend or renew (or waive or amend any performance or vesting criteria or accelerate funding under) any employment, change in control, severance, bonus, profit sharing, retirement, restricted stock, stock option, deferred compensation or other than director, executive or employee benefit plan, policy, agreement or arrangement except as required by applicable law or the terms of an agreement or arrangement existing on the applicable Company Employee Plan date hereof, (3) enter into any collective bargaining agreement or under Applicable Lawother agreement with any labor organization, enter intoworks council, adopttrade union, amend labor association or other employee representative; (including by accelerating 4) take any action to accelerate the vesting, payment or funding of any compensation or benefits under), modify to any current or former employee or any directors or officers; or (5) terminate any Company Employee Plan employee with a title of vice president or planabove, agreement, arrangementother than a termination for “cause”, or policy that would be hire any employee with a Company Employee Plan if in effect on the date hereoftitle of vice president or above (unless required to replace an employee who has terminated his or her employment voluntarily or whose employment has terminated as permitted herein);
(fi) hirethe Company will not, engage and will not permit any of its Subsidiaries to, acquire (for cash or terminate the employment other assets) or engagement of agree to acquire (other than for cause, as determined i) by the Company) any employee, officer, directormerging or consolidating with, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend by purchasing all or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock a substantial portion of the assets of, or make by purchasing all or a substantial equity or voting interest in, or by any loansother manner, advances any business or capital contribution to any Person or division thereofthereof or (ii) any other assets (including E&P Assets), whether in whole or in part (and whether by purchase of stockexcept, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregatecase of this clause (ii), other than one or more acquisitions the Company and its Subsidiaries shall be permitted to acquire (x) E&P Assets in accordance with Section 5.1(i) of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets the Company Disclosure Schedules in the ordinary course of business and in amounts substantially consistent with past practice;
practice (i) sell, assign, lease, license, pledge, transfer, abandon, subject to and in no event shall it engage in any Lien, permit to lapse or otherwise dispose of any assets, properties, or Company Intellectual Property, such acquisitions in each case having a value in excess of an amount exceeding $500,000 individually or $5,000,000 25 million in the aggregate, except in the ordinary course of the Company’s ) or its Subsidiaries’ business substantially consistent with past practice;
(jy) agree to any exclusivity, non-competition or similar provision or covenant limiting the ability of the Company or any of its Subsidiaries to compete or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made E&P Assets acquired in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;
(o) institute, settle or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than in the ordinary course of business or as contemplated by this Agreement (i) amend, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date . For purposes of this Agreement, the term “E&P Assets” means land and mineral interests or (ii) renew or enter into any Contract with an Affiliate rights therein used for the exploration, development and production of the CompanyHydrocarbons;
(s) voluntarily terminate, amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Act; or
(u) authorize, commit or agree to take any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentence.
Appears in 2 contracts
Samples: Merger Agreement (Noble Energy Inc), Merger Agreement (Noble Energy Inc)
Conduct of the Company. The Company covenants and agrees that, from the date hereof until the Effective Time, except for matters (i) as expressly permitted or expressly contemplated by provided otherwise in this Agreement, (ii) set forth on Part 6.01 including Section 5.01 of the Company Disclosure ScheduleSchedule hereto, (iii) reasonably undertaken the Company and its Subsidiaries shall conduct their business in connection the ordinary course consistent with any COVID-19 Measurespast practice and shall use their reasonable best efforts to preserve intact their business organizations and relationships with customers, (iv) undertaken with suppliers, creditors and business partners and shall use their reasonable best efforts to keep available the prior written consent services of Parent (which shall not be unreasonably withheld, conditioned or delayed), (v) required by Applicable Law or their present officers and employees. Without limiting the rules and regulations generality of Nasdaqthe foregoing, from the date hereof until the earlier Effective Time, without the prior written approval of the Effective Time and the termination of this Agreement in accordance with Article 8 hereof, the Company Parent (A) shall, and which approval shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) conduct its business in the ordinary course in all material respects, substantially consistent with past practice, (2) to the extent consistent with the foregoing clause (1), maintain its business as a going concern and (3) keep available the services of its current officers and key employees and to preserve the goodwill of and maintain satisfactory relationships with those Persons having material business relationships with the Company and its Subsidiaries, and (B) shall not, and shall cause each of its Subsidiaries not to:be unreasonably withheld):
(a) amend the Company’s The Company will not adopt or propose any change in its certificate of incorporation or any material change in its bylaws, or amend any certificate of incorporation or bylaws, or other comparable charter or organizational documents, of the Company’s Subsidiaries;
(b) other than with respect to a direct or indirect wholly owned Subsidiary of the CompanyThe Company will not, (i) establish a record date for, declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock, property or otherwise) in respect of, or enter into any agreement with respect to the voting of, any capital stock of the Company or and will not permit any of its Subsidiaries (or securities convertible or exchangeable therefor)to, (ii) split, reverse split, combine, subdivide or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) of the Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c), issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), or (iv) purchase, redeem or otherwise acquire or offer to purchase, redeem or acquire any Company Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPP;
(c) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company Securities, other than (i) the issuance of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement or (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company;
(d) merge, consolidate or, other than in the ordinary course of business substantially consistent with past practice, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, of complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other material reorganization of the Company or any of its Subsidiaries (other than a liquidation or dissolution of any Subsidiary or a merger or consolidation between wholly owned Subsidiaries);
(c) The Company will not, and will not permit any of its Subsidiaries to, make any investment in or acquisition of any business of any person or any material amount of assets (other than inventory), except for (i) acquisitions for cash not to exceed $500,000 per acquisition or $5,000,000 in the aggregate and (ii) any capital expenditure permitted by Section 5.01(i);
(d) The Company will not, and will not permit any of its Subsidiaries to, sell, lease, license, close, shut down or otherwise dispose of any assets (other than inventory), except (i) pursuant to existing contracts or commitments listed on Section 5.01 of the Company Disclosure Schedule or (ii) sales, leases, licenses, closings, shutdowns or other dispositions of assets in the ordinary course of business consistent with past practice;
(e) The Company will not, and will not permit any of its Subsidiaries to, split, combine or reclassify any shares of its capital stock, declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock (or otherwise make any payments to stockholders in their capacity as such) other than dividends paid by any Subsidiary of the Company to the Company or any other Subsidiary of the Company;
(f) The Company will not, and will not permit any of its Subsidiaries to, issue, sell, transfer, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire any shares of, capital stock of any class or series of the Company or its Subsidiaries (or any equity equivalents), other than (i) increase the salary, wages, benefits, bonuses or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made issuances pursuant to the terms exercise of stock-based awards or options under the plans described in Section 3.05(a) outstanding on the date hereof, (ii) issuances by any Subsidiary of the Company to the Company or any other Subsidiary of the Company and (iii) issuances of options to purchase shares of Common Stock granted to newly hired employees in accordance with the Company's past practice covering the issuance of not more than an aggregate of 300,000 shares of Company Common Stock and not more than 75,000 shares of Company Common Stock to any single individual;
(g) The Company will not, and will not permit any of its Subsidiaries to, redeem, purchase or otherwise acquire directly or indirectly any of the Company's capital stock;
(h) Except in connection with investments or acquisitions permitted by Section 5.01(c), the Company will not, and will not permit any of its Subsidiaries to, (i) enter into (or commit to enter into) any new lease (except pursuant to commitments for such lease existing employment as of the date hereof and leases in the ordinary course of business provided for in the budgets adopted by the Company and its Subsidiaries and furnished to Parent prior to the date of this Agreement) or other compensation agreements (ii) purchase or arrangements in effect acquire or enter into any agreement to purchase or acquire any real estate (except pursuant to commitments existing as of the date hereof);
(i) The Company will not, and will not permit any of its Subsidiaries to, make or commit to make any capital expenditure (Bincluding for information systems) required under any except for capital expenditure projects or items not exceeding $150,000 per project or item or $1,200,000 in the aggregate and those projects or items committed to or set forth in the capital budgets adopted by the Company Employee Plan pursuant and its Subsidiaries and furnished to Parent prior to the terms date of this Agreement;
(j) The Company will not, and will not permit any of its Subsidiaries to, enter into, adopt, amend or terminate any bonus, profit sharing, compensation, severance, termination, stock option, stock appreciation right, restricted stock, performance unit, stock equivalent, stock purchase agreement, pension, retirement, deferred compensation, employment, severance or other employee benefit agreement, trust, plan, fund, award or other arrangement for the benefit or welfare of any director, officer or employee in any manner, or (except for normal increases in the ordinary course of business consistent with past practice that, in the aggregate, do not result in a material increase in benefits or compensation expense to the Company or any of its Subsidiaries) increase in any manner the compensation or fringe benefits of any director, officer or employee or pay any benefit not required by any plan and arrangement as in effect as of the date hereof (including, without limitation, the granting of stock appreciation rights or Collective Bargaining Agreement or under Applicable Lawperformance units);
(k) The Company will not, and will not permit any of its Subsidiaries to, (Ci) made incur or assume any indebtedness for borrowed money or issue any debt securities, except for borrowings (A) under lines of credit existing on the date hereof and (B) in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of practice not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
(i) sell, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregate, except in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice;
(j) agree to any exclusivity, non-competition or similar provision or covenant limiting the ability of the Company or any of its Subsidiaries to compete or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, ; (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee guarantee, endorse or endorse otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any Person (other than a wholly-owned Subsidiary person, except for obligations incurred in the ordinary course of the Company), (iv) make any loan, advance or capital contribution to any Person business consistent with past practice not in excess of $500,000 in the aggregate, and except for obligations of wholly owned Subsidiaries of the Company; (iii) make any loans, advances or capital contributions to, or investments in, any other person (other than capital contributions and loans to any wholly owned Subsidiary, and extensions Subsidiaries of trade credit the Company or customary loans or advances to employees in the ordinary course of businessbusiness consistent with past practice and in amounts not material to the maker of such loan or advance); (iv) pledge or otherwise encumber shares of capital stock of the Company or its Subsidiaries, except pursuant to the terms of credit facilities existing on the date hereof; or (v) amendmortgage or pledge any of its material assets, modify tangible or waive intangible, or create or suffer to exist any provision material lien or encumbrance thereupon, except pursuant to the terms of credit facilities existing on the date hereof;
(l) The Company will not, and will not permit any of its Subsidiaries to, change any of the Existing Credit Agreement (other than to waive accounting principles or otherwise cure any “Default” practices used by it, except as may be required as a result of a change in law or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreementin generally accepted accounting principles;
(m) makeThe Company will not, change or revoke and will not permit any of its Subsidiaries to, revalue in any material Tax electionrespect any of its assets, change any annual Tax accounting periodincluding, file any material amended Tax Return without limitation, writing down the value of inventory or file any material Tax Return writing-off notes or accounts receivable, other than in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) The Company will not, and will not permit any of its Subsidiaries to, make or revoke any commitment with respect tax election or settle or compromise any tax liability material to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Scheduleor any of its Subsidiaries taken as a whole or change (or make a request to any taxing authority to change) any material aspect of its method of accounting for tax purposes;
(o) instituteThe Company will not, settle and will not permit any of its Subsidiaries to, pay, discharge or agree to settle satisfy any Proceedings, other than (i) the settlement of material claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents absolute, accrued, asserted or (B) involving payments of less than $500,000 individually unasserted, contingent or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) otherwise), other than the payment, discharge or satisfaction in the ordinary course of business consistent with past practice of liabilities reflected or as contemplated by this Agreement (i) amend, modify, renew or terminatereserved against in, or grant any release contemplated by, the Company Balance Sheet (or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an Affiliate of the Company;
(s) voluntarily terminate, amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(snotes thereof) of the Company Disclosure Scheduleor its Subsidiaries or incurred in the ordinary course of business consistent with past practice and the payment, discharge and satisfaction of all obligations under the Company's existing bank credit facility prior to or concurrently with the Effective Time;
(tp) conduct The Company will not, and will not permit any reduction-in-force of employees its Subsidiaries to, settle or other service providers compromise any pending or otherwise implement any layoffsthreatened suit, in each case that could implicate action or claim relating to the WARN Act; ortransactions contemplated hereby;
(uq) authorizeThe Company will not, and will not permit any of its Subsidiaries to, agree or commit to do any of the foregoing; and
(r) The Company will not, and will not permit any of its Subsidiaries to take or agree or commit to take any of the foregoing actions. Notwithstanding anything set forth in this Agreement or action that would make any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules representation and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary warranty of the Company (including hereunder inaccurate in any COVID-19 Measures) material respect at, or (y) respond to third-party supply or service disruptions caused by as of any time prior to, the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentenceEffective Time.
Appears in 2 contracts
Samples: Merger Agreement (Snyder Communications Inc), Agreement and Plan of Merger (Zuckerman Mortimer B)
Conduct of the Company. The Company covenants (a) During the period commencing on the date of this Agreement and agrees thatending on the earlier of the termination of this Agreement in accordance with Article 8 and the Effective Time (the “Pre-Closing Period”), except for matters as (i) expressly permitted or expressly set forth in Section 6.01 of the Company Disclosure Schedules, (ii) contemplated by this Agreement, (ii) set forth on Part 6.01 of the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measures, required by Applicable Law or (iv) undertaken with the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed), (v) required by Applicable Law or the rules and regulations of Nasdaq, from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereof, the Company (A) shall, and shall cause each of its the Company Subsidiaries to to, use commercially reasonable efforts to (1) conduct its business in the ordinary course in all material respectscourse, substantially consistent with past practice, (2) and to the extent consistent with the foregoing clause (1)therewith, use its commercially reasonable efforts to maintain and preserve substantially intact its business as a going concern organization, assets and (3) keep available the services of its current officers technology and key employees and to preserve the goodwill of and maintain satisfactory relationships with those Persons having material business relationships with the Company and its Subsidiaries, and (B) shall not, and shall cause each of its Subsidiaries not to:
(a) amend the Company’s certificate of incorporation or bylaws, or amend any certificate of incorporation or bylaws, or other comparable charter or organizational documents, of the Company’s Subsidiaries;relationships.
(b) other than with respect to a direct or indirect wholly owned Subsidiary of the Company, Except as set forth in clauses (i) establish a record date forthrough (iv) of Section 6.01(a), during the Pre-Closing Period, the Company shall not, nor shall it permit any of the Company Subsidiaries to, do any of the following:
(i) (A) declare, set aside aside, or pay any dividends on, or make any other distributions (whether in cash, stock or property) with respect to, any of its capital stock, property other than dividends or otherwise) in respect of, distributions by a direct or enter into any agreement indirect wholly owned Company Subsidiary or another wholly owned Company Subsidiary or the payment of accrued dividends with respect to the voting of, any capital stock of awards granted under the Company or any Stock Plans that become vested after the date of its Subsidiaries (or securities convertible or exchangeable therefor)this Agreement, (iiB) adjust, split, reverse split, combine, subdivide or reclassify subdivide, reclassify, redeem, purchase, repurchase or otherwise amend acquire, directly or indirectly, or amend, the terms Company’s or any Company Subsidiary’s securities, including any options, equity or equity-based compensation, warrants, convertible securities or other rights of any capital stock (or securities convertible or exchangeable therefor) of the Company or kind to acquire any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c), such securities or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, for shares of its capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), or (ivC) purchase, redeem or otherwise acquire or offer to purchase, redeem or acquire (1) any Company Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of its capital stock or other voting securities or (2) any options, warrants, calls or rights to acquire, or any securities convertible into or exchangeable for, any such shares or voting securities (except (i) upon the exercise of, or withholding of Shares to satisfy Tax obligations upon vesting, settlement or exercise of, awards granted under the Company Common Stock by the Company, Plans and (ii) in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance connection with the terms satisfaction of any Tax liability or the ESPPpayment of any exercise or purchase price relating to awards granted under the Company Stock Plans);
(cii) issue, deliver, sell, transfer, grant, announce, pledge, transfer, pledge or otherwise encumber or subject to any LienLien any shares of its capital stock or other securities or any options, otherwise encumber warrants, calls or dispose of rights to acquire any equity interests of the Company such shares or incur any obligation to make any payments to any Person based on the price or value of any Company Securities, other voting securities (other than (iA) the issuance of shares of Company Common Stock Shares pursuant to (A) the terms exercise, vesting or settlement of the Company Equity Awards that are outstanding on the date hereof, Options in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement or thereof, (B) grants the issuance of equity awards to new hires in an amount not to exceed 25,000 Shares in the aggregate or awards (C) the issuance of Company Securities or Company Equity Awards required to be made pursuant Shares under the Employee Stock Purchase Plan with respect to the terms of existing employment or other compensation agreements or arrangements offering period in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or Agreement);
(iii) amend the issuance of equity interests of a wholly owned Subsidiary Organizational Documents of the Company or any of the Company Subsidiaries;
(iv) merge or consolidate with, or purchase an equity interest in, or acquire all or substantially all of the assets of, any Person or any division or business thereof;
(v) sell, lease or otherwise dispose of any of its real or personal properties or assets (including capital stock of any Company Subsidiary) that are material, individually or in the aggregate, to the Company or another wholly owned Subsidiary of and the Company;
(d) mergeCompany Subsidiaries, consolidate ortaken as a whole, other than sales of inventory and other assets in the ordinary course of business substantially consistent with past practice, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or business;
(vi) adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization reorganization, with respect to the Company or any Company Subsidiary;
(vii) (A) incur any Indebtedness of the Company or any Company Subsidiaries or guarantee Indebtedness of its another Person, other than (1) Indebtedness under the Company’s or the Company Subsidiaries’ existing lines of credit or other facilities, (2) Indebtedness incurred to finance capital expenditures permitted by clause (vii) below and mergers, consolidations or purchases permitted by clause (iv) above and (3) Indebtedness incurred in connection with the refinancing of any Indebtedness existing on the date of this Agreement on substantially similar or more favorable terms and of an equal or lesser amount or permitted to be incurred, assumed or otherwise entered into pursuant to this clause (vii) or (B) make any loans or capital contributions to, or investments in, any Person other than the Company Subsidiaries, other than in the ordinary course of business;
(eviii) (i) increase the salary, wages, benefits, bonuses make or authorize any capital expenditures other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made than in the ordinary course of business and substantially consistent with past practice, or other than (DA) in connection with changes the repair or replacement of facilities destroyed or damaged due to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made casualty or accident (whether or not covered by insurance), (B) capital expenditures accounted for in the ordinary course of business, and 2018 budget Made Available to Parent or (iiC) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend otherwise in an aggregate amount for all such capital expenditures made pursuant to this clause (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
(fC) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds not to exceed $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
(iix) sell, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse lien or otherwise dispose of any assets, properties, Intellectual Property of the Company or Company Subsidiaries, material assets or material properties except (i) with respect to assets or properties other than Software and other Intellectual Property, in each case having a value in excess pursuant to existing Contracts or commitments, (ii) non-exclusive licenses of $500,000 individually Software and other Intellectual Property owned by the Company or $5,000,000 in the aggregateany Company Subsidiary to its customers, except contractors, partners or suppliers in the ordinary course of business, (iii) sales of supplies and similar tangible inventory or used equipment in the Company’s ordinary course of business, or its Subsidiaries’ business substantially consistent with past practice(iv) Permitted Liens incurred in the ordinary course of business;
(jx) agree enter into any contract that would constitute a Material Contract if in existence on the date hereof, or modify, amend or terminate any Material Contract to any exclusivity, non-competition or similar provision or covenant limiting the ability of which the Company or any of its the Company Subsidiaries to compete or engage is a party in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, exceptmanner, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made case other than in the ordinary course of business substantially consistent with past practicepractice or as required by Applicable Law;
(xi) hire, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (engage, promote or otherwise restrict or bind) on Parent or any of its Affiliates terminate (other than for cause, death or disability) the Company and its Subsidiaries) after the Effective Timeemployment or engagement of any employee or individual consultant who will earn annual base compensation in excess of $200,000;
(kxii) (A) grant any material increase in base salary or bonus opportunity to any executive officer of the Company or any Company Subsidiary, except (1) as required under the terms of existing Contracts in effect as of the date hereof (including the terms of any Company Employee Plan) or (2) for employment arrangements for, or grants of compensatory awards to, promoted or newly hired employees, (B) adopt or change terminate any material Company Employee Plan (except as required by Applicable Law, as required under the terms of any existing Company Employee Plan in effect as of the accounting methods used by the date hereof, or for employment arrangements for, or grants of compensatory awards to, promoted or newly hired employees) or (C) amend in any material respect any material Company materially affecting its assets, liabilities or businessEmployee Plan, except for such changes that are as required by Applicable Law or to maintain the Tax-qualified status of any Company Employee Plan or in the ordinary course of business;
(ixiii) take any action requiring notice to employees, or triggering any other obligations, in accordance with the WARN Act or any similar state, local or foreign Applicable Law;
(xiv) make any material change in accounting methods, principles or practices, except insofar (A) as may have been required by a change in GAAP (or any interpretation thereof), (ii) by any Applicable Law, including or Regulation S-X under the Securities Act, (B) as may be required by a change in Applicable Law or (iiiC) as disclosed in the Company SEC Documents or as required by any a Governmental Authority or quasi-governmental authority entity (including the Financial Accounting Standards Board or any similar organization);
(lxv) write up, write down or write off the book value of any material assets, except to the extent required by GAAP;
(xvi) waive any non-competition, non-solicitation or other restrictive covenants applicable to the employees of the Company or the Company Subsidiaries;
(xvii) fail to use reasonable best efforts to maintain in effect material insurance policies covering the Company and each Company Subsidiary and their respective properties, assets and businesses;
(xviii) (1) settle, release, waive or compromise any Proceeding or other claim (or threatened Proceeding or other claim), other than any settlement, release, waiver or compromise that (A) results solely in monetary obligations involving only the payment of monies by the Company or any Company Subsidiary of not more than $250,000 in the aggregate (excluding monetary obligations that are funded by an indemnity obligation to, or an insurance policy of, the Company or any Company Subsidiary) or (B) results in no monetary or other material non-monetary obligation of the Company or any Company Subsidiary; provided that (x) the settlement, release, waiver or compromise of any Proceeding or claim brought by the stockholders of the Company against the Company and/or its directors relating to the Transactions or a breach of this Agreement or any other agreements contemplated hereby shall be subject to Section 6.11 and (y) the foregoing shall not permit the Company to settle, release, waive or compromise any Proceeding or claim that (a) provides for borrowings the grant to any Third Party of revolving loans under a license or other grant of rights to any material Intellectual Property of the Existing Credit Agreement and capital leases Company or a Company Subsidiary or (b) would impose any material restrictions or changes on the business or operations of, or the admission of wrongdoing by, the Company or a Company Subsidiary or (2) commence any material Proceeding, other than in the ordinary course of business;
(xix) adopt or implement any stockholder rights plan or similar arrangement;
(xx) make any material election other than in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) makeconsistent with past practice, change or revoke any material Tax election, change any annual method of Tax accounting periodaccounting, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practiceReturn, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in agreement with respect of any material Taxto Taxes, settle any Tax claim or assessment for any material amount of Taxes that is inconsistent with past practices or that is not reasonably expected to result in a material Tax Proceedingliability after the Closing, surrender any material right to claim a material Tax refund, offset or other reduction in Tax liabilityrefund of Taxes, or consent to any extension or waiver of the limitations period limitation period, other than automatic extensions of time to file Tax Returns applicable to any material Tax claim or assessment outside the ordinary course of business;assessment; or
(nxxi) make authorize any commitment with respect of, or commit or agree in writing to capital expenditures in excess of take any of, the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;foregoing actions.
(oc) instituteNotwithstanding anything to the contrary in this Section 6.01, settle or the parties hereto acknowledge and agree to settle any Proceedings, other than that (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included nothing contained in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by shall give Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail , directly or indirectly, the right to maintain in all material respects any Insurance Policies;
(r) other than in the ordinary course of business or as contemplated by this Agreement (i) amendcontrol, modify, renew or terminatedirect, or grant in any release or waiver under, any Material Contract way exercise beneficial ownership with respect to the Company’s operations (excluding including for purposes of the expiration HSR Act) prior to the consummation of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or Offer and (ii) renew or enter into no consent of Parent shall be required with respect to any Contract with an Affiliate of the Company;
(s) voluntarily terminate, amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Act; or
(u) authorize, commit or agree to take any of the foregoing actions. Notwithstanding anything matter set forth in this Agreement or any other documents related to the Merger, prior extent that the requirement of such consent would violate any Applicable Law. Prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In additionEffective Time, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employeesshall exercise, suppliers, customers and other individuals having business dealings consistent with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shallterms and conditions hereof, to the extent legally permissible complete control and only if time permits, consult with Parent prior to taking the actions described in this sentencesupervision over its operations.
Appears in 2 contracts
Samples: Merger Agreement (JetPay Corp), Agreement and Plan of Merger (NCR Corp)
Conduct of the Company. The Company covenants and agrees thatDuring the period from the date hereof until the Effective Time, except for matters (i) with the prior written consent of Parent in each instance (which consent shall not be unreasonably withheld, delayed or conditioned); provided, that Parent’s consent will be deemed obtained if Parent has not expressly permitted or expressly contemplated by this Agreementdenied its consent with respect to a given action within five (5) Business Days following the Company’s request for Parent’s consent, (ii) as required by Applicable Law, (iii) as otherwise expressly contemplated or permitted by this Agreement or (iv) as set forth on Part in Section 6.01 of the Company Disclosure Schedule, (iiiA) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken with the prior written consent of Parent (which shall not be unreasonably withheld, conditioned or delayed), (v) required by Applicable Law or the rules and regulations of Nasdaq, from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereof, the Company (A) shall, and shall cause each of its Subsidiaries to to, use commercially reasonable efforts to (1) conduct its business in the ordinary course of business in all material respects, substantially consistent with past practice, (2) to the extent consistent with the foregoing clause (1)preserve substantially intact its present business organization, maintain its business as a going concern and (3) comply in all material respects with Applicable Laws and its Contracts, and maintain in effect all necessary material Permits, (4) keep available the services of its current directors, officers and key employees on commercially reasonable terms (other than for terminations of employment services for cause) and to (5) preserve the goodwill of and maintain satisfactory business relationships with those Persons its material customers, lenders, suppliers, lessors, lessees, working interest owners and others having material business relationships with it; provided that no COVID-19 Response shall be deemed to be a breach of this Section 6.01(A) provided that, to the extent reasonably practicable, prior to taking any COVID-19 Response, the Company shall provide advance notice to and its Subsidiariesconsult with Parent in good faith with respect thereto, and (B) the Company shall not, and nor shall cause each it permit any of its Subsidiaries not to:
(a) amend with respect to the Company’s , amend its certificate of incorporation or bylawsbylaws (whether by merger, consolidation or amend any certificate of incorporation or bylaws, or other comparable charter or organizational documents, of the Company’s Subsidiariesotherwise);
(b) other than with respect to a direct or indirect wholly owned Subsidiary enter into any new line of business outside the existing business of the Company, Company and its Subsidiaries as of the date of this Agreement;
(c) (i) establish a record date foradjust, declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock, property or otherwise) in respect of, or enter into any agreement with respect to the voting of, any capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), (ii) split, reverse split, combine, subdivide or reclassify or otherwise amend the terms any shares of any its capital stock (other than such transactions by a wholly owned Subsidiary of the Company), (ii) declare, authorize, establish a record date for, set aside or securities convertible pay any dividend or exchangeable thereforother distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock (including any Company Shares), except for (w) dividends by any of its wholly-owned Subsidiaries, (x) quarterly cash dividends by the Company with a customary record date prior to December 31, 2023 in compliance with the Company’s dividend policy that is publicly disclosed prior the date hereof, and illustrated on Section 6.01(c)(ii) of the Company Disclosure Schedule (the “Company Dividend Policy”), provided that, for purposes of this clause (x), the base component of such dividend shall not exceed $1.25 per Company Share and the variable component of such dividend shall be 75% of the amount thereof calculated in compliance with the Company Dividend Policy, (y) quarterly cash dividends by the Company with a customary record date after December 31, 2023 and prior to April 1, 2024 in compliance with the Company Dividend Policy or, if the Closing Date is to occur in the first quarter of 2024 but prior to such customary record date, a quarterly cash dividend by the Company with a record date prior to the Closing Date in an amount up to the amount that would have been declared and paid in compliance with the Company Dividend Policy on the customary record and payment dates thereof had such Closing Date not occurred, which, to the extent required, may be calculated based on estimates of free cash flow of the Company prepared by the Company in good faith and in accordance with the Company Dividend Policy, provided that, for purposes of this clause (y), the base component of such dividend shall not exceed $1.25 per Company Share and the variable component of such dividend shall be 50% of the amount thereof calculated in compliance with the Company Dividend Policy, and (z) quarterly cash dividends by the Company with a customary record date on or any of its Subsidiariesafter April 1, 2024 in an amount not to exceed $1.25 per Company Share; or (iii) except as expressly provided in Section 6.01(c)redeem, issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), or (iv) purchase, redeem repurchase or otherwise acquire or offer to purchaseredeem, redeem repurchase, or otherwise acquire any Company Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPP;
its capital stock (c) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value of including any Company Shares), Company Securities or any Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock pursuant to (A) the terms withholding of Company equity securities to satisfy tax obligations with respect to awards granted pursuant to any Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms Plans existing as of such Company Equity Awards as in effect on the date of this Agreement or (B) grants the acquisition by the Company of awards granted pursuant to any Equity Plans prior to the date hereof or awards otherwise in accordance with this Agreement in connection with the forfeiture of such awards;
(d) (i) issue, deliver, sell, dispose, encumber, grant, confer, award or authorize the issuance, delivery, sale, disposal, encumbrance, grant, conferral or award of, any Company Securities or Company Equity Awards required to be made pursuant to Subsidiary Securities, other than the issuance (A) of any Company Shares upon settlement of Company RSUs, Company DSUs or Company Performance Units that are outstanding on the date of this Agreement in accordance with the terms of existing employment or other compensation agreements or arrangements in effect as of those equity-based awards on the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or Agreement, (iiiB) the issuance of equity interests of a wholly owned any Company Subsidiary of the Company Securities to the Company or another any other wholly owned Subsidiary of the Company, (C) of Company Shares under the ESPP in accordance with Section 2.04(f), and (D) in accordance with the terms of the Convertible Notes that are outstanding on the date hereof or (ii) amend or otherwise change any term of any Company Security or any Company Subsidiary Security (in each case, whether by merger, consolidation or otherwise);
(de) mergeincur any capital expenditures or any obligations or liabilities in respect thereof, consolidate orexcept (i) for those as contemplated by Section 6.01(e) of the Company Disclosure Schedule, (ii) any capital expenditures not contemplated by clause (i) in an amount not to exceed $500,000,000 in the aggregate and (iii) for capital expenditures to repair damage resulting from insured casualty events or required on an emergency basis for the safety of individuals, assets or the Environment (provided that the Company shall notify Parent of any such emergency expenditure as soon as reasonably practicable); provided that amounts paid as consideration for acquisitions permitted under clause (f) shall not constitute capital expenditures for purposes of this clause (e);
(f) acquire (by merger, consolidation, acquisition or otherwise), directly or indirectly, any assets, securities, properties, interests or businesses, other than (i) pursuant to an agreement of the Company or any of its Subsidiaries in effect on the date of this Agreement that is made available to Parent, (ii) acquisitions for which the consideration is less than $150,000,000 individually or $500,000,000 in the aggregate, (iii) acquisitions of licenses or Hydrocarbons in the ordinary course of business, or (iv) the exchange or swap of Oil and Gas Properties or other related assets in the ordinary course of business substantially consistent with past practice, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or that is deemed to be less than $150,000,000 individually;
(g) adopt a plan or agreement of, or resolutions providing for or authorizing, of complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization reorganization, other than such transactions among wholly owned Subsidiaries of the Company or any of its SubsidiariesCompany;
(eh) sell, lease, license or otherwise transfer, or dispose of, mortgage, sell and lease back or otherwise, or create or incur any Lien on, any of the Company’s or its Subsidiaries’ assets, securities, properties, interests or businesses or other interests therein whether tangible or intangible (including securitizations) (other than Intellectual Property), other than (i) increase the salary, wages, benefits, bonuses or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms sales of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business inventory and substantially consistent with past practiceequipment, or (D) sales of Hydrocarbons, in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made each case in the ordinary course of business, and or sales of or disposals of obsolete or worthless assets at the end of their scheduled retirement, (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if pursuant to Contracts in effect on the date hereof;
hereof that are made available to Parent, (fiii) hirePermitted Liens, engage (iv) transfers among the Company and its wholly owned Subsidiaries, or terminate among the employment or engagement wholly owned Subsidiaries of (other than for cause, as determined by the Company, (v) any employee, officer, director, exchanges or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend swaps of Oil and Gas Properties or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar related assets in the ordinary course of business that is deemed to be less than $150,000,000 individually and (vi) sales, leases, licenses, transfers or dispositions for which the consideration is less than $100,000,000 individually and $250,000,000 in amounts substantially consistent with past practicethe aggregate;
(i) sell, assign, lease, license, pledgesublicense, transfer, convey, abandon, subject to or incur any Lien, permit to lapse Lien other than Permitted Liens on or otherwise dispose of or fail to maintain, enforce or protect any assetsmaterial Intellectual Property owned, properties, used or held for use by the Company or any of its Subsidiaries (except for non-exclusive licenses or sublicenses of Intellectual Property, in each case having a value in excess Property granted by the Company or any of $500,000 individually or $5,000,000 in the aggregate, except its Subsidiaries in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practicebusiness);
(j) agree make any loans, advances or capital contributions to, or investments in, any other Person, other than (i) in the ordinary course of business or (ii) for acquisitions permitted by clause (f);
(k) create, incur, assume, refinance or otherwise become liable with respect to any exclusivityIndebtedness for borrowed money or guarantees thereof, non-competition other than (i) additional borrowings under the Company Credit Agreement as in effect as of the date hereof, and (ii) Indebtedness for borrowed money among the Company and its Subsidiaries or similar provision among Subsidiaries of the Company, or covenant limiting guarantees thereof;
(l) except in compliance with the ability other provisions of this Section 6.01(B) or otherwise for entry into any Material Contract in the ordinary course of business (i) with a term not to exceed two (2) years or (ii) that is terminable for convenience by the Company or the applicable Subsidiary of the Company upon less than ninety (90) days’ notice without any penalty or liability to the Company or its Subsidiaries, enter into, amend or modify in any material respect or terminate or fail to renew any Material Contract or any Contract that would constitute a Material Contract if it were in effect on the date of this Agreement or otherwise waive, release or assign any material rights, claims or benefits of the Company or any of its Subsidiaries to compete or engage thereunder;
(m) except as required by the terms of any Employee Plan as in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent the date hereof or by Applicable Law, (i) with respect to any of its Affiliates after the Effective Timecurrent or former Service Provider (A) grant or increase any compensation, exceptbonus, severance, retention, change in each casecontrol, termination pay, welfare or other benefits, except for (x) increases in connection base compensation or wages (and corresponding increases in target annual bonus opportunities) on terms consistent with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers Section 6.01(m) of the Company Disclosure Schedule and its Subsidiaries or similar arrangements, (y) (i) payment of annual bonuses to the extent earned pursuant to the applicable Employee Plan and (ii) grants of annual bonus opportunities in respect of any fiscal year that commences after the date of this Agreement and prior to the Effective Time with target amounts consistent with the preceding clause (x) and Section 6.01(m) of the Company Disclosure Schedule, and with performance goals that are made consistent with the budget for the applicable fiscal year, in the case of each of clauses (x) and (y), in the ordinary course of business substantially consistent with past practice, (yB) are on terms substantially similar grant any equity or equity-based awards to, or discretionarily accelerate the vesting or payment of any equity or equity-based awards held by, any current or former Service Provider, (C) take any action to any such restrictions existing on accelerate the date of this Agreement and (z) would not have any such effect (vesting or payment of, or otherwise restrict fund or bindsecure the payment of, any compensation or benefits under any Employee Plan or (D) on Parent enter into or amend any of its Affiliates (employment, consulting, severance, retention, change in control, termination pay, retirement, deferred compensation, transaction bonus or similar agreement or arrangement other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt Contracts entered into or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases amended in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between consistent with past practice that are immaterial to the Company in both cost and significance, (ii) establish, terminate, adopt, enter into or amend any Employee Plan, (iii) establish, adopt or enter into any Collective Bargaining Agreement or recognize any new union, works council or similar employee representative with respect to any current or former Company Employee, (iv) hire any employees with base compensation of $300,000 or more (unless necessary to replace an employee (other than an officer of the Company or any of its wholly-owned Subsidiaries Subsidiaries) whose employment has ended, in which case such replacement employee shall be hired on comparable terms as the employee being replaced), (v) terminate the employment of any Company Employee with base compensation of $300,000 or between more, other than for cause or (vi) take any wholly-owned Subsidiaries actions that would result in any Service Provider being able to claim “good reason” (or term of similar meaning) prior to or as a result of the Closing pursuant to the provisions of the Employee Plans listed on Section 6.01(m)(vi) of the Company Disclosure Schedule;
(n) change in any respect the Company’s methods of accounting, except as required by changes in GAAP or in Regulation S-X of the 1934 Act, as agreed to by its independent public accountants;
(o) settle, release, waive, discharge or compromise, or offer or propose to settle, release, waive, discharge or compromise (i) incurany Action or threatened Action (excluding any Action or threatened Action relating to Taxes, issue, which shall be subject to Section 6.01(p)) involving or otherwise become liable for against the Company or any additional Indebtedness of its Subsidiaries that results in a payment obligation (net of insurance proceeds) of the Company or any of its Subsidiaries in excess of $5,000,000 10,000,000 individually or $25,000,000 in the aggregate, or that imposes any material restrictions or limitations upon the assets, operations or business of the Company or any of its Subsidiaries or equitable or injunctive remedies or the admission of any criminal wrongdoing or (ii) modify in a manner materially adverse any Action or threatened Action (excluding any Action or threatened Action relating to Taxes, which shall be subject to Section 6.01(p)) that relates to the Company transactions contemplated hereby;
(p) (i) make, change or its Subsidiaries the terms of revoke any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution election with respect to any Person in excess of $500,000 in the aggregateTaxes, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (vii) amendfile any amended material Tax Return, modify (iii) settle or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke compromise any material Tax electionclaim, change any annual Tax accounting periodaudit or assessment, file any material amended Tax Return or (iv) prepare and file any material Tax Return in a manner materially inconsistent with past practice, (v) adopt or change any material Tax accounting method, (vi) change any Tax accounting period, (vii) enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in agreement with respect of any material Tax, settle to any material Tax Proceeding, or surrender any right to claim a material Tax refund, offset or other reduction in Tax liabilityTax, or (viii) consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;
(o) institute, settle or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities any such extensions or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of businesswaivers automatically granted);
(q) fail to use reasonable best efforts to maintain in all full force and effect existing material respects insurance policies (or substantially similar replacements thereto); provided that in the event of a termination, cancellation or lapse of any Insurance Policiesmaterial insurance policy, the Company shall use commercially reasonable efforts to promptly obtain replacement policies providing substantially comparable insurance coverage with respect to the material assets, operations and activities of the Company and its Subsidiaries as currently in effect as of the date hereof;
(r) make or assume any Derivatives, including any Derivative intended to benefit from or reduce or eliminate the risk of fluctuations in the price of Hydrocarbons or other commodities, other than in the ordinary course of the Company’s marketing business or as contemplated by this Agreement (i) amend, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an Affiliate of the Company;’s current policies; or
(s) voluntarily terminateagree, amend resolve or fail commit to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Act; or
(u) authorize, commit or agree to take do any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentenceforegoing.
Appears in 2 contracts
Samples: Merger Agreement (Pioneer Natural Resources Co), Merger Agreement (Pioneer Natural Resources Co)
Conduct of the Company. The Company covenants and agrees that, except for matters (i) expressly permitted or expressly contemplated by this Agreement, (ii) set forth on Part 6.01 of the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken with the prior written consent of Parent (which shall not be unreasonably withheld, conditioned or delayed), (v) required by Applicable Law or the rules and regulations of Nasdaq, from Between the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereofClosing Date, the Company (A) shall, and shall cause each Subsidiary to:
(i) preserve and maintain in full force and effect its existence and good standing under the laws of its jurisdiction of formation or organization;
(ii) preserve and maintain in full force and effect all material rights, privileges, qualifications, applications, licenses and franchises necessary for the Company and the Subsidiaries to operate in the normal conduct of their respective businesses as presently and as proposed to be conducted;
(iii) use commercially reasonable its best efforts to preserve intact its business organization;
(1iv) conduct its business in the ordinary course in accordance with sound business practices, and keep its properties in good working order and condition (normal wear and tear excepted);
(v) take all material respectsreasonable actions to protect and maintain the Company Intellectual Property, substantially consistent with past practiceincluding, (2) without limitation, prosecuting all pending applications for patents or for the registration of trademarks and copyrights and maintaining, to the extent consistent permitted by law, each patent or registration owned by the Company or any Subsidiary;
(vi) (A) comply in all material respects with all applicable laws, rules and regulations and with the foregoing clause (1), maintain its business as a going concern and (3) keep available the services directions of its current officers and key employees and to preserve the goodwill of and maintain satisfactory relationships with those Persons having material business relationships with the Company and its Subsidiariesany governmental authority, and (B) shall not, and shall not take any action designed to or that might reasonably be expected to cause each of its Subsidiaries not to:
(a) amend the Company’s certificate of incorporation or bylaws, or amend any certificate of incorporation or bylaws, or other comparable charter or organizational documents, result in unlawful manipulation of the Company’s Subsidiariesprice of the Common Stock to facilitate the sale or resale of the Shares, the Warrants or the Warrant Shares in violation of applicable law;
(bvii) other than with respect file or cause to be filed in a direct or indirect wholly owned Subsidiary timely manner all reports, applications, estimates and licenses that shall be required by a governmental authority;
(viii) conduct its business in a manner such that the representations and warranties of the CompanyCompany contained in Section 2.2 shall continue to be true and correct on and as of the Closing;
(ix) use its best efforts to cause the conditions contained in Section 3.1 to be satisfied on or before the Closing Date; and
(x) not issue, (i) establish a record date fordeliver, declare, set aside sell or pay any dividends onauthorize, or make any other distributions (whether in cashpropose the issuance, stockdelivery, property sale or otherwise) in respect of, or enter into any agreement with respect to the voting purchase of, any additional shares of capital stock, stock equivalents or any other security of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), (ii) split, reverse split, combine, subdivide or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) of the Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c), issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), or (iv) purchase, redeem or otherwise acquire or offer to purchase, redeem or acquire any Company Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPP;
(c) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company SecuritiesSubsidiary, other than (iA) the issuance of Common Stock pursuant to the exercise of any warrants or options outstanding as of the date hereof and (B) the issuance of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement or (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company;
(d) merge, consolidate or, other than in the ordinary course of business substantially consistent with past practice, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries;
(e) (i) increase the salary, wages, benefits, bonuses or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
(i) sell, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregate, except in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice;
(j) agree to any exclusivity, non-competition or similar provision or covenant limiting the ability of the Company or any of its Subsidiaries to compete or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;
(o) institute, settle or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than in the ordinary course of business or as contemplated by this Agreement (i) amend, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an Affiliate of the Company;
(s) voluntarily terminate, amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Act; or
(u) authorize, commit or agree to take any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentenceOption Plans.
Appears in 2 contracts
Samples: Stock and Warrant Purchase Agreement (Mdu Communications International Inc), Stock and Warrant Purchase Agreement (Mdu Communications International Inc)
Conduct of the Company. The Company covenants and agrees that, except for matters (i) expressly permitted or expressly contemplated by this Agreement, (ii) set forth on Part 6.01 of the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken with the prior written consent of Parent (which shall not be unreasonably withheld, conditioned or delayed), (v) required by Applicable Law or the rules and regulations of Nasdaq, from From the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereofTime, the Company (A) shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) to, conduct its business in the ordinary course in all material respects, substantially consistent with past practicepractice and use its reasonable best efforts to (i) preserve intact its present business organization, (2ii) to the extent consistent with the foregoing clause maintain in effect all of its foreign, federal, state and local licenses, permits, consents, franchises, approvals and authorizations, (1), maintain its business as a going concern and (3iii) keep available the services of its current directors, officers and key employees and to preserve the goodwill of and (iv) maintain satisfactory relationships with those Persons its customers, lenders, suppliers and others having material business relationships with it. Without limiting the generality of the foregoing, (a) except as expressly contemplated by this Agreement or set forth in Schedule 6.01 of the Company and its SubsidiariesDisclosure Schedule, and (Bb) as expressly contemplated or permitted by any other provision of this Agreement, (c) with the prior written consent of Parent, it being understood that Parent will consider in good faith any requests reasonably made by the Company, or (d) as required by Applicable Law, the Company shall not, and nor shall cause each it permit any of its Subsidiaries not to:
(a) amend the Company’s certificate Company Certificate of incorporation or bylawsIncorporation, or amend any certificate the bylaws of incorporation or bylaws, the Company or other comparable charter similar organizational documents (whether by merger, consolidation or organizational documents, of the Company’s Subsidiariesotherwise);
(b) other than with respect to a direct or indirect wholly owned Subsidiary of the Company, (i) establish a record date forsplit, combine or reclassify any shares of its capital stock, (ii) declare, set aside or pay any dividends on, dividend or make any other distributions distribution (whether in cash, stock, stock or property or otherwiseany combination thereof) in respect of its capital stock or (ii) redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any Company Securities or any Company Subsidiary Securities;
(c) (i) issue, deliver or sell, or authorize the issuance, delivery or sale of, any shares of any Company Securities or enter into Company Subsidiary Securities, other than the issuance of (A) any agreement shares of the Company Stock upon the exercise of Company Stock Options that are outstanding on the date of this Agreement and the Company Warrants in accordance with the terms of those options and warrants on the date of this Agreement and (B) any Company Subsidiary Securities to the Company or any other Subsidiary of the Company or (ii) amend any term of any Company Security or any Company Subsidiary Security (in each case, whether by merger, consolidation or otherwise);
(d) incur any capital expenditures or any obligations or liabilities in respect thereof, except for (i) those contemplated by the capital expenditure budget that has been made available to Parent prior to the date of this Agreement and (ii) any unbudgeted capital expenditures not to exceed $50,000 individually or $100,000 in the aggregate;
(e) acquire (by merger, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, any assets, securities, properties, interests or businesses, other than supplies in the ordinary course of business of the Company and its Subsidiaries in a manner that is consistent with past practice;
(f) ship products to customers except in the ordinary course of business in response to bona fide purchase orders;
(g) offer discounts to accelerate the collection of accounts receivable, or take other actions to accelerate the collection of accounts receivable, other than in the ordinary course of business consistent with past practice;
(h) fail to pay accounts payable when due or to delay the payment of accounts payable in a manner inconsistent with prior practice;
(i) sell, lease or otherwise transfer, or create or incur any Lien on, any of the Company’s or its Subsidiaries’ assets, securities, properties, interests or businesses, other than sales in the ordinary course of business and sales of assets, securities, properties, interests or businesses with a sale price (including any related assumed indebtedness) that does not exceed $100,000 individually or $250,000 in the aggregate;
(j) other than in connection with actions permitted by Section 6.01(d) or Section 6.01(e) make any loans, advances or capital contributions to, or investments in, any other Person, other than in the ordinary course of business consistent with past practice;
(k) other than pursuant to the terms of the U.S. Bank Agreements, create, incur, assume, suffer to exist or otherwise be liable with respect to any indebtedness for borrowed money or guarantees thereof having an aggregate principal amount (together with all other indebtedness for borrowed money of the voting ofCompany and its Subsidiaries) outstanding at any time greater than $250,000;
(l) enter into, amend or modify in any capital stock material respect or terminate any Material Contract or otherwise waive, release or assign any material rights, claims or benefits of the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice;
(m) hire new employees, other than with respect to currently open requisitions reflected on Schedule Section 6.01(m) of the Company Disclosure Schedule;
(n) (i) with respect to any director, officer or employee of the Company or any of its Subsidiaries whose annual compensation exceeds $200,000, (A) grant or increase any severance or termination pay to (or securities convertible amend any existing severance pay or exchangeable therefortermination arrangement) or (B) enter into any employment, deferred compensation or other similar agreement (or amend any such existing agreement), (ii) splitincrease benefits payable under any existing severance or termination pay policies, reverse split(iii) establish, combineadopt or amend (except as required by Applicable Law) any collective bargaining, subdivide bonus, profit-sharing, thrift, pension, retirement, deferred compensation, stock option, restricted stock or reclassify other benefit plan or otherwise amend the terms of arrangement or (iv) increase compensation, bonus or other benefits payable to any capital stock (or securities convertible or exchangeable therefor) employee of the Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c)except, issue with respect to any director, officer or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock employee of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor)whose annual compensation does not exceed $200,000, or (iv) purchase, redeem or otherwise acquire or offer to purchase, redeem or acquire any Company Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPP;
(c) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company Securities, other than (i) the issuance of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement or (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company;
(d) merge, consolidate or, other than increases in the ordinary course of business substantially consistent with past practice, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries;
(e) (i) increase the salary, wages, benefits, bonuses or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
(io) sell, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregate, except in the ordinary course of change the Company’s or methods of accounting, except as required by concurrent changes in GAAP, as agreed to by its Subsidiaries’ business substantially consistent with past practiceindependent public accountants;
(jp) agree to any exclusivity, non-competition or similar provision or covenant limiting the ability of the Company or any of its Subsidiaries to compete or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt make or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, adopt or change any material method of Tax accounting, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practiceCompany Return, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceedingclaim or assessment, or surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;
(o) institute, settle or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail settle, or offer or propose to maintain in all settle, (i) any material respects litigation, investigation, arbitration, proceeding or other claim involving or against the Company or any Insurance Policiesof its Subsidiaries, (ii) any stockholder litigation or dispute against the Company or any of its officers or directors or (iii) any litigation, arbitration, proceeding or dispute that relates to the transactions contemplated hereby;
(r) other than in the ordinary course of business agree, resolve or as contemplated by this Agreement (i) amend, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an Affiliate of the Company;
(s) voluntarily terminate, amend or fail commit to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Act; or
(u) authorize, commit or agree to take do any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentenceforegoing.
Appears in 2 contracts
Samples: Merger Agreement (Formfactor Inc), Merger Agreement (Formfactor Inc)
Conduct of the Company. The Company covenants and agrees that, except Except (1) for matters (i) expressly permitted or expressly contemplated by this Agreement, (ii) set forth on Part in Section 6.01 of the Company Disclosure ScheduleLetter, (iii2) reasonably undertaken as required by the terms of this Agreement (including, for the avoidance of doubt, the Exchange and Redemption set forth in Section 2.02(b)), (3) as required by Applicable Law, (4) for actions taken in good faith as COVID-19 Actions, (5) in connection with any COVID-19 Measuresthe issuance of shares of Class A Common Stock in exchange for, or redemption of, OpCo Units and Class B Common Stock pursuant to the terms of the OpCo LLC Agreement, (iv6) undertaken for actions taken or omissions made to implement the terms of the Business Sale Agreement and applicable Local Transfer Agreements or (7) with the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed), (v) required by Applicable Law or the rules from and regulations of Nasdaq, from after the date hereof until the earlier of and prior to the Effective Time and the termination of this Agreement in accordance with Article 8 hereofTime, (i) the Company (A) shall, and shall cause each of its Subsidiaries to to, use commercially reasonable best efforts to (1) conduct its business in the ordinary course in all material respectscourse, substantially consistent with past practiceand, without limiting the generality of the foregoing, (2ii) to the extent consistent with the foregoing clause (1), maintain its business as a going concern and (3) keep available the services of its current officers and key employees and to preserve the goodwill of and maintain satisfactory relationships with those Persons having material business relationships with the Company and its Subsidiaries, and (B) shall not, and nor shall cause each it permit any of its Subsidiaries not to:
(a) (i) amend the Company’s certificate of incorporation or bylaws, or amend any certificate of incorporation or bylaws, or other comparable charter or organizational documents, bylaws of the Company’s Subsidiaries, (ii) amend the OpCo LLC Agreement, or (iii) amend in any material respect the comparable organizational documents of any Subsidiary of the Company;
(b) other than with respect to a direct (i) split, combine, subdivide or indirect wholly owned reclassify any shares Company Securities or Company Subsidiary of the CompanySecurities, (iii) establish a record date for, declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock, property or otherwise) in respect of, or enter into any agreement Contract with respect to the voting of, any capital stock Company Securities or Company Subsidiary Securities, other than dividends and distributions (x) by a direct or indirect wholly owned Subsidiary of the Company to its parent or any of its Subsidiaries (y) by OpCo LLC to the Company, or securities convertible or exchangeable therefor), (ii) split, reverse split, combine, subdivide or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) of the Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c)redeem, issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), or (iv) purchase, redeem repurchase or otherwise acquire or offer to purchaseredeem, redeem repurchase or otherwise acquire any Company Securities or any Company Subsidiary Securities, except for other than (A) the net settlement of acquisition by the Company Equity Awards or acquisitions of shares of Company Common Stock by in connection with the Company, in each case, in satisfaction surrender of shares of Company Stock by holders of Company Equity Awards Stock Options in order to pay the exercise price thereof, (B) the withholding of shares of Company Stock to satisfy Tax obligations with respect to awards granted pursuant to the applicable withholding taxes or Company Stock Plans, (C) the acquisition by the Company of Company Restricted Shares in accordance connection with the terms forfeiture of Company Awards, and (D) as required by any Employee Plan as in effect on the ESPPdate of this Agreement;
(c) issueIssue or authorize the issuance of, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, Lien (other than Permitted Liens) or otherwise encumber or dispose of any equity interests of the Company Securities or incur any obligation to make any payments to any Person based on the price or value of any Company Subsidiary Securities, other than the issuance of (iA) any shares of Company Stock upon the exercise of Company Stock Options or settlement of Company RSUs and Company PSUs that are outstanding on the date of this Agreement, (B) the issuance of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as required by any Employee Plan as in effect on the date of this Agreement or Agreement, (BC) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock granted under the ESPP and pursuant Company Stock Plans to the terms thereof and Section 2.06 of this Agreement newly hired employees or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company;
(d) merge, consolidate or, other than in connection with promotions and/or periodic performance reviews in the ordinary course of business substantially that (i) for any individual employee do not exceed 38,000 shares of Company Stock and in the aggregate do not exceed 500,000 shares of Company Stock, (ii) contain vesting schedules and vesting terms that are consistent in all material respects with past practicesimilar awards issued by the Company in the ordinary course of business, enter into strategic alliance and (iii) do not contain terms (and are not granted pursuant to terms contained in any other agreements with the award recipients) that cause such awards to accelerate or similar legal partnership otherwise become Vested by their terms (without further action by the Company) in connection with the transactions contemplated by this Agreement, and (D) any Personshares of Company Stock in exchange for OpCo Units in accordance with the terms of the OpCo LLC Agreement;
(d) incur any capital expenditures or any obligations or liabilities in respect thereof, file a voluntary petition except for bankruptcy (i) those contemplated by the capital expenditure budget as set forth in Section 6.01(d) of the Company Disclosure Letter and (ii) any unbudgeted capital expenditures not to exceed $3,000,000 individually or liquidation$10,000,000 in the aggregate, dissolvein each case, liquidate, restructure or recapitalize or for each fiscal quarterly period;
(e) adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization recapitalization, merger consolidation or other reorganization of reorganization, each with respect to the Company or any of its Subsidiaries;
Subsidiaries (e) (i) increase other than the salary, wages, benefits, bonuses or other cash compensation payable or to become payable to dissolution of any inactive Subsidiary of the Company and reorganizations solely among Subsidiaries of the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
(f) hireacquire (by merger, engage amalgamation, plan of arrangement, consolidation, acquisition of stock or terminate assets or otherwise), directly or indirectly, any business, or all or substantially all of the employment any assets or engagement securities of (other than for causeany business, as determined if the aggregate amount of consideration paid or transferred by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds Company and its Subsidiaries in connection therewith would exceed $250,00020,000,000 for each fiscal quarterly period;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
(i) sell, assign, lease, licenseencumber (other than Permitted Liens), pledge, transfer, abandon, subject to any Lien, permit to lapse transfer or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregate, except in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice;
(j) agree assets, securities, properties, interests or businesses if the aggregate amount of consideration paid or transferred to any exclusivity, non-competition or similar provision or covenant limiting the ability of the Company or any of its Subsidiaries to compete or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries would exceed $20,000,000 in connection therewith for each fiscal quarterly period, other than (i) pursuant to existing Contracts or similar arrangementscommitments that have been disclosed in Section 6.01(g) of the Company Disclosure Letter or (ii) sales of Company products and services, that (x) are made inventory or used equipment in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Timebusiness;
(kh) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issuecreate, assume or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company indebtedness for borrowed money or its Subsidiaries the terms of any material Indebtedness existing as obligation of the date hereof, (iii) assume, guarantee or endorse the obligations of any another Person (other than a wholly-owned Subsidiary of the Company), including by way of a guarantee or an issuance or sale of debt securities, or issue or sell options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, enter into any “keep well” or other Contract to maintain any financial statement or similar condition of another Person, or enter into any arrangement having the economic effect of any of the foregoing (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions (A) indebtedness in connection with the financing of ordinary course trade credit payables in the ordinary course of business, (vB) amendborrowings and repayment of borrowings under the Credit Agreement, modify or (C) accounts payable in the ordinary course of business) or (ii) make any loans, advances, capital contributions to, or investments in, any other Person (other than (A) to the Company or any of its Subsidiaries in the ordinary course of business or (B) accounts receivable and extensions of credit in the ordinary course of business and advances of expenses to employees in the ordinary course of business);
(i) except (w) as required by the terms of any Employee Plan as in effect on the date of this Agreement or (y) disclosed on Section 6.01(i) of the Company Disclosure Letter, (i) hire any new employee or terminate the employment of any employee (other than a termination for cause), in each case other than with respect to employees with total target annual cash compensation (prospective, in the case of new hires) of not more than $300,000, (ii) grant to any current or former director, officer, employee entitled to earn over $300,000 in total target annual cash compensation, or any current or former consultant or service provider entitled to earn over $300,000 in total target annual cash fees, of the Company or any of its Subsidiaries any material increase in compensation, bonus or benefits, (iii) make any Person a participant in or party to any Employee Plan or other plan, program or arrangement, in either case, providing for severance pay or benefits, or grant any material increase in severance compensation or grant any retention, change in control, or transaction-based pay or benefits to any current or former director, employee or service provider of the Company or its Subsidiaries, (iv) loan or advance any money or other property (or forgive or waive any provision such loan or advance) to any current or former director, officer, employee of the Existing Credit Agreement Company or its Subsidiaries (other than advances of expenses to waive employees in the ordinary course of business), (v) grant any equity or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiverequity-based awards (except as permitted by Section 6.01(c)), or (vi) establish, adopt, enter into, terminate or materially amend any Benefit Plan (other than entering into offer letters that contemplate “at will” employment without any rights to severance or termination pay or more than 30 days’ advance notice of termination or, with respect to employees with total target annual cash compensation (prospective, in the case of new hires) of not more than $300,000, pursuant to a form of employment agreement made available to Parent, consistent in all material respects with the Company’s practices in the applicable jurisdiction), and other than as permitted by Section 6.01(c) or the other provisions of this Section 6.01(i); provided, however, that, with respect to employees with total target annual cash compensation (prospective, in the case of new hires) of not more than $300,000, none of the foregoing in this paragraph (i) shall restrict the Company or any of its Subsidiaries from entering into or making available to newly hired employees, or to employees in the context of promotions and periodic performance reviews based on job performance or workplace requirements, Employee Plans (other than the regularly scheduled Company Stock Plans, unless permitted by Section 6.01(c)) and required amortization payments under benefits and compensation practices and arrangements that have a value that is consistent with those provided to similarly-situated employees or newly hired employees or past practice and that does not increase the Existing Credit Agreementemployee’s total target annual cash compensation above $300,000);
(j) adopt, repurchaseenter into, prepayengage in negotiations for, terminate or refinance materially amend any Indebtedness arising collective bargaining agreement other than as required by Applicable Law or the terms of such collective bargaining agreement;
(k) make any change in any financial accounting principles, methods or practices, in each case except for any such change required by GAAP or Applicable Law, including Regulation S-X under the Existing Credit Agreement1934 Act;
(i) discharge, compromise, settle or satisfy (or agree to do any of the preceding with respect to) any Action that would involve the payment of more than $6,000,000 individually or $20,000,000 in the aggregate (net of any insurance coverage or any reserves on the Company Balance Sheet), any material non-monetary relief, or any admissions of responsibility or liability, or (ii) waive, relinquish, release, grant, transfer or assign any right with a value of more than $20,000,000 in any individual case;
(m) make, change or revoke any material Tax election, amend any material Tax Return, change any annual Tax accounting period, file adopt or change any material amended method of Tax Return accounting, settle or file compromise any material Tax Return in a manner inconsistent proceeding relating to Taxes, agree to an extension or waiver of the statute of limitations with past practicerespect to the assessment or determination of material Taxes (other than automatically granted extensions), enter into any “closing agreement” within the meaning of described in Section 7121 of the Code (or any corresponding or similar provision of stateApplicable Law), local apply for any Tax ruling from any Taxing Authority or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender any right to claim a refund of material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of businessTaxes;
(n) make enter into any commitment with respect to capital expenditures in excess Contract between the Company or any of its Subsidiaries, on the amounts set forth in Part 6.01(n)(i) one hand, and any current director or officer of the Company Disclosure Scheduleor any Person (or any of their Affiliates) beneficially owning five percent or more of the Company Stock or OpCo Units, on the other hand, except for any commercial Contracts entered into on arm’s length terms in the ordinary course of businesses;
(o) institute, settle or agree take any action to settle any Proceedings, other than (i) the settlement of claimsamend or modify in any material respect, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent waive any material rights under or Merger Sub arising out of (iii) terminate any Contract with a breach Major Channel Partner or alleged breach of this Agreement by Parent or Merger SubMajor Supplier;
(p) enter into or adopt any material new line of business“poison pill” or similar stockholder rights plan that would prevent or preclude the Merger;
(q) fail enter into any Contract or other arrangement or understanding that would be required to maintain in all material respects any Insurance Policies;be disclosed under Item 404(a) of Regulation S-K; or
(r) other than in the ordinary course of business agree, authorize or as contemplated by this Agreement (i) amend, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an Affiliate of the Company;
(s) voluntarily terminate, amend or fail commit to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Act; or
(u) authorize, commit or agree to take do any of the foregoing actionsforegoing. Notwithstanding anything set forth in this Agreement For the avoidance of doubt, if any action taken or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with refrained from being taken by the Company or any Subsidiary of its Subsidiaries is expressly permitted or addressed by one sentence or subsection of this Section 6.01(a) through (r) and not expressly prohibited under such sentence or subsection or any other sentence or subsection of this Section 6.01(a) through (r), the taking or refraining from being taken of such action by the Company (including or any COVID-19 Measures) of its Subsidiaries shall be deemed not to be in violation of any other sentence or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in subsection of this sentenceSection 6.01.
Appears in 2 contracts
Samples: Merger Agreement (McAfee Corp.), Merger Agreement (McAfee Corp.)
Conduct of the Company. The Company (i) Seller covenants and agrees that, except for matters (i) as otherwise expressly permitted or expressly contemplated required by this AgreementAgreement (including as described in Schedule 6.1(a) and the other matters expressly set forth in the other Schedules and Exhibits hereto) and the other Transaction Documents, (ii) set forth on Part 6.01 of the Company Disclosure Scheduleas required by any change in applicable Law, (iii) reasonably undertaken to the extent necessary for Parent and Seller to effectuate the Pre-Closing Transactions or (iv) as otherwise approved in connection writing by Buyer, during the period commencing on the date hereof and ending on the Closing Date, Seller will cause the Company (and each member of the Company Group) to (A) conduct the business of the Company Group in the ordinary course, (B) use commercially reasonable efforts to keep available the services of the officers of the Company Group and (C) use commercially reasonable efforts to maintain and preserve intact the business, organizations and relationships with customers, suppliers and others having business relationships with the Company Group in all material respects in order to preserve for Buyer to and after the Closing Date the business of the Company Group (it being understood that such efforts will not include any COVID-19 Measuresrequirement or obligation to pay any consideration not otherwise required to be paid by the terms of an existing agreement or offer or grant any financial accommodation or other benefit not otherwise required to be made by the terms of an existing agreement).
(ii) Until the Closing, Seller covenants and agrees that except (i) as otherwise contemplated by this Agreement (including as described in Schedule 6.1(a) and the other matters contemplated by the other Schedules and Exhibits hereto) and the other Transaction Documents, (ii) as required by any change in applicable Law, (iii) to the extent necessary for Parent and Seller to effectuate the Pre-Closing Transactions, (iv) undertaken with as provided for in the prior written consent Company’s annual or capital budgets for 2011 or 2012, true and correct copies of Parent which have been made available in Data Room File 6.3.3, or (v) as otherwise approved in writing by Buyer (which approval shall not be unreasonably withheld, conditioned or delayed), (v) required by Applicable Law or the rules and regulations of Nasdaq, from the date hereof until the earlier Seller will cause each member of the Effective Time and Company Group not to take any of the termination of this Agreement in accordance with Article 8 hereof, the Company (A) shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to following actions:
(1) conduct amend its certificate of formation, limited liability company agreement, certificate of incorporation, bylaws, partnership agreement or operating agreement, as applicable; or (2) authorize for issuance, issue, grant, sell, deliver, dispose of, pledge or otherwise encumber any shares of its capital stock or issue any Rights to subscribe for or acquire any shares of its capital stock;
B. sell, transfer, lease or otherwise dispose of or encumber any of the material tangible assets or material properties pertaining to the business of the Company Group with a value in excess of $250,000 individually or $750,000 in the aggregate, other than recycling materials and the sale of used, obsolete or worn out equipment in the ordinary course in all material respects, substantially consistent with past practice, of business;
X. xxxxxx any litigation (2) whether or not commenced prior to the extent date of this Agreement), other than settlements of the Retained Claims or other settlements that are consistent with the foregoing clause (1), maintain its business as a going concern provisions of Sections 9.4 and (3) keep available the services of its current officers and key employees and to preserve the goodwill of and maintain satisfactory relationships with those Persons having material business relationships with the Company and its Subsidiaries, and (B) shall not, and shall cause each of its Subsidiaries not to:9.8;
(a) D. enter into or materially amend the Company’s certificate of incorporation or bylawsmodify, or amend grant any certificate waiver of incorporation any material right under, renew or bylaws, or other comparable charter or organizational documents, of the Company’s Subsidiaries;
(b) other than with respect to a direct or indirect wholly owned Subsidiary of the Company, (i) establish a record date for, declare, set aside or pay terminate any dividends on, or make any other distributions (whether in cash, stock, property or otherwise) in respect of, or enter into any agreement with respect to the voting of, any capital stock of the Company or any of its Subsidiaries Material Contract (or securities convertible or exchangeable therefor), (ii) split, reverse split, combine, subdivide or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) of the Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c), issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), or (iv) purchase, redeem or otherwise acquire or offer to purchase, redeem or acquire any Company Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPP;
(c) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company Securities, other than (i) the issuance of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards an agreement that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as would constitute a Material Contract if in effect on the date of this Agreement or (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company;
(d) merge, consolidate or), other than any of the foregoing entered into in the ordinary course of business substantially consistent with past practice, enter into strategic alliance or practice in respect of Material Contracts renewed on substantially similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries;
(e) (i) increase the salary, wages, benefits, bonuses or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if those in effect on the date hereof;
(f) hireE. subject to Section 6.16(i), engage enter into or materially amend, modify, renew or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or F. make any loans, advances change in the compensation payable or capital contribution to become payable to any Person Business Employees or division thereof, whether in whole consultants or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
(i) sell, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregate, except in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice;
(j) agree to any exclusivity, non-competition or similar provision or covenant limiting the ability of the Company or any of its Subsidiaries to compete or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates independent contractors (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;
(o) institute, settle or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than normal recurring increases in the ordinary course of business or as contemplated by this Agreement (i) amend, modify, renew or terminate, or grant pursuant to any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence Company Benefit Plans existing on the date of this Agreement, hereof) or (ii) renew become a party to, establish, amend, commence participation in, terminate, or enter into commit itself to the adoption of any Contract with an Affiliate of the Companystock option plan or other stock-based compensation plan, compensation, severance, pension, retirement, profit-sharing, welfare benefit, or other employee benefit plan or agreement or employment agreement;
(s) voluntarily terminate, amend G. engage in any “Plant Closing” or fail “Mass Layoff” that gives rise to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate notice obligations under the WARN Act; or
(u) authorize, commit or agree to take any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentence.;
Appears in 2 contracts
Samples: Share Purchase Agreement (SSI Southland Holdings, Inc.), Share Purchase Agreement (Trestle Transport, Inc.)
Conduct of the Company. The During the Pre-Closing Period, and subject to the exceptions in clauses (w) through and including (z) in the third sentence of this Section 7.01, the Company covenants shall, and agrees thatshall cause each of its Subsidiaries to, except for matters conduct the business of the Company and its Subsidiaries in the ordinary course consistent with past practice in all material respects. Without limiting the generality of the foregoing, the Company shall, and shall cause each of its Subsidiaries to, use commercially reasonable efforts to (i) expressly permitted or expressly contemplated by this Agreementpreserve intact in all material respects the present business organization and assets of the Company and its Subsidiaries, (ii) maintain in effect the Permits of the Company and its Subsidiaries, (iii) keep available the services of the directors, officers, key employees and key consultants of the Company and its Subsidiaries and (iv) maintain in all material respects satisfactory relationships with the customers, lenders, suppliers, vendors and others having significant business relationships with the Company and its Subsidiaries and with Governmental Authorities. Without limiting the generality of the foregoing, from the date hereof until the Closing, except, subject to Section 12.06, (w) as expressly contemplated or required by this Agreement or as required by Applicable Law, (x) as set forth on Part 6.01 in the Table of Contents corresponding subsection of Section 7.01 of the Company Disclosure Schedule, (iiiy) reasonably undertaken in connection with respect to actions taken or omitted by, or at the specific direction of, any COVID-19 Measures, Designated Individual or (ivz) undertaken with the prior written consent of Parent (which shall such consent not to be unreasonably withheld, conditioned or delayed), (v) required by Applicable Law or the rules and regulations of Nasdaq, from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereof, the Company (A) shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) conduct its business in the ordinary course in all material respects, substantially consistent with past practice, (2) to the extent consistent with the foregoing clause (1), maintain its business as a going concern and (3) keep available the services of its current officers and key employees and to preserve the goodwill of and maintain satisfactory relationships with those Persons having material business relationships with the Company and its Subsidiaries, and (B) shall not, and shall cause each of its Subsidiaries not to:
(a) amend the Company’s certificate of incorporation or bylawsincorporation, or amend any certificate of incorporation or bylaws, bylaws or other comparable charter or organizational documents, of the Company’s Subsidiaries;
(b) other than with respect to a direct or indirect wholly owned Subsidiary of the Company, (i) establish a record date for, declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock, property or otherwise) in respect of, or enter into any agreement with respect to the voting of, any capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), (ii) split, reverse split, combine, subdivide or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) of the Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c), issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), or (iv) purchase, redeem or otherwise acquire or offer to purchase, redeem or acquire any Company Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPP;
(c) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company Securities, other than (i) the issuance of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement or (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company;
(d) merge, consolidate or, other than in the ordinary course of business substantially consistent with past practice, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization Organizational Documents of the Company or any of its Subsidiaries;
(eb) (i) increase the salarysplit, wagescombine or reclassify any Company Securities or Company Subsidiary Securities, benefits(ii) declare, bonuses set aside or pay any dividend or other cash compensation payable distribution (whether in cash, securities or to become payable to other property or any combination thereof) in respect of any Company Securities or Company Subsidiary Securities, except for the Company’s employeesregular quarterly dividend of up to $0.15 per Share per quarter with record and payment dates consistent with the quarterly record and payment dates in 2018 and cash dividends payable by any wholly owned Subsidiary of the Company to the Company or to any other wholly owned Subsidiary of the Company or (iii) redeem, officersrepurchase or otherwise acquire, directors or Independent Contractorsoffer to redeem, except for increases repurchase or otherwise acquire, any Company Securities or Company Subsidiary Securities other than, in the case of this clause (iii), in connection with (A) required to be made pursuant to the satisfaction by the Company of tax withholding obligations upon exercise of Company Stock Options or the vesting or settlement of any Company RSUs, Company Restricted Stock or Company Performance-Based Restricted Stock and (B) exercise price net settlements upon exercise of Company Stock Options, in the case of each of clauses (A) and (B), in accordance with the terms on the date hereof of existing employment the Company Stock Plan and the applicable award agreement;
(c) (i) issue, grant, sell or otherwise deliver any Company Securities or Company Subsidiary Securities, other compensation agreements than the issuance of (A) any Shares upon the exercise of Company Stock Options or arrangements purchase rights under the Company ESPP, in effect as of each case, that are outstanding on the date hereof in accordance with their terms on the date hereof, (B) required under any Shares upon the vesting of Company Employee Plan pursuant to RSUs, Company Restricted Stock or Company Performance-Based Restricted Stock that are outstanding on the date hereof in accordance with their terms in effect as of on the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made any Company Subsidiary Securities to the Company or any other wholly owned Subsidiary of the Company, (ii) amend any term of any Company Security or any Company Subsidiary Security (in each case, whether by merger, consolidation or otherwise) or (iii) issue or grant any award, or amend or modify the terms of any outstanding award, under any Company Stock Plan, Company Employee Plan or otherwise, or accelerate the vesting or payment of any Company Equity Awards;
(d) incur any capital expenditures or any obligations or liabilities in respect thereof, except up to the aggregate amount contemplated by the capital expenditure budget as approved by the Company Board prior to the date hereof and any unbudgeted capital expenditures not to exceed $5,000,000 individually or $30,000,000 in the aggregate;
(e) (i) merge or consolidate with any other Person, (ii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, any assets, securities, properties, interests in entities or businesses, other than, in the case of clause (ii), supplies, equipment or inventory in the ordinary course of business and substantially consistent with past practice, practice or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of (other than acquisitions for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more consideration less than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
(i) sell, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value in excess of $500,000 1,000,000 individually or $5,000,000 in the aggregateaggregate or (iii) adopt a plan of complete or partial liquidation, except in the ordinary course dissolution, recapitalization or restructuring;
(f) sell, lease, license or otherwise transfer or dispose of, create or incur any Lien (other than Permitted Liens) on, or otherwise abandon, permit to lapse or fail to maintain, any of the Company’s or its Subsidiaries’ business substantially consistent with past practice;
material assets, securities, properties, interests in entities or businesses (j) agree to any exclusivity, non-competition or similar provision or covenant limiting the ability of the Company or any of its Subsidiaries to compete or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the including any Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereofIP), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiarysales of products, and extensions of trade credit in the ordinary course of businessservices, (v) amend, modify inventory or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;
(o) institute, settle or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than in the ordinary course of business or as contemplated by this Agreement (i) amend, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an Affiliate of the Company;
(s) voluntarily terminate, amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Act; or
(u) authorize, commit or agree to take any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentence.obsolete
Appears in 2 contracts
Samples: Agreement and Plan of Merger (Sonic Financial Corp), Merger Agreement (Speedway Motorsports Inc)
Conduct of the Company. The Company covenants and agrees that, between the date of this Agreement and the Effective Time, unless Buyer shall have consented in writing (such consent not to be unreasonably withheld), the businesses of the Company and its Material Subsidiaries shall, in all material respects, be conducted in, and the Company and its Material Subsidiaries shall not take any material action, except for matters in the ordinary course of business, consistent with past practice, and the Company shall use its reasonable best efforts to preserve substantially intact its business organization, to keep available the services of its and its Material Subsidiaries' current officers, employees and consultants and to preserve its and its Material Subsidiaries' relationships with customers, suppliers and other persons with which it or any of its subsidiaries has significant business relations. By way of amplification and not limitation, except (i) expressly permitted or expressly as contemplated by this Agreement, or (ii) as set forth on Part 6.01 Section 6.1 of the Company Disclosure Schedule, (iii) reasonably undertaken in connection with neither the Company nor any COVID-19 Measuresof the Company Subsidiaries shall, (iv) undertaken with between the date of this Agreement and the Effective Time, directly or indirectly do, or propose or agree to do, any of the following without the prior written consent of Parent Buyer (which provided that the following restrictions shall not be unreasonably withheld, conditioned or delayed), (v) required by Applicable Law or the rules and regulations of Nasdaq, from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereof, apply to any subsidiaries which the Company (A) shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) conduct its business in the ordinary course in all material respects, substantially consistent with past practice, (2) to the extent consistent with the foregoing clause (1), maintain its business as a going concern and (3) keep available the services of its current officers and key employees and to preserve the goodwill of and maintain satisfactory relationships with those Persons having material business relationships with the Company and its Subsidiaries, and (B) shall not, and shall cause each of its Subsidiaries does not to:control):
(a) amend or otherwise change the Company’s certificate Certificate of incorporation Incorporation or bylaws, or amend any certificate of incorporation or bylaws, or other comparable charter or organizational documents, Bylaws of the Company’s Subsidiaries;
(b) other than with respect to a direct issue or indirect wholly owned Subsidiary of sell, or authorize the Companyissuance or sale of, (i) establish a record any shares of capital stock of any class of the Company or any of the Company Subsidiaries, or any options (other than the grant of options previously disclosed by the Company to Buyer prior to the date forof this Agreement including, without limitation, the Company Stock Options), warrants or other convertible securities of the Company or any of the Company Subsidiaries (other than the issuance of shares of capital stock in connection with (A) the exercise of options, including, without limitation, the Company Stock Options and in accordance with the terms of such options in effect on the date of this Agreement, or (B) otherwise permitted to be granted pursuant to this Agreement) or (ii) any assets of it or any of the Company Subsidiaries, except for sales in the ordinary course of business or sales which, individually, do not exceed $150,000 or which, in the aggregate, do not exceed $500,000;
(c) sell, pledge or encumber any stock owned by it in any Company Subsidiary;
(d) declare, set aside or pay any dividends ondividend or other distribution, or make any other distributions (whether payable in cash, stock, property or otherwise) in respect of, or enter into any agreement with respect to the voting of, any of its capital stock of (other than a dividend or distribution payable solely to the Company or a Company Subsidiary);
(e) reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its Subsidiaries (or securities convertible or exchangeable therefor), (ii) split, reverse split, combine, subdivide or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) of the other than acquisitions under any Company or any of its SubsidiariesCompany Subsidiary plan with an employee stock fund or employee stock ownership plan feature, (iii) except as expressly provided in Section 6.01(c), issue or authorize the issuance of any other consistent with applicable securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), or (iv) purchase, redeem or otherwise acquire or offer to purchase, redeem or acquire any Company Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPPlaws;
(cf) issue(i) acquire, delivermortgage, encumber, sell, grantlease, announce, pledge, transfer, subject to any Lien, otherwise encumber license or dispose of any equity interests of the Company assets (including intellectual property) or incur any obligation to make any payments to any Person based on the price or value of any Company Securitiessecurities, other than (i) the issuance of shares of Company Common Stock except pursuant to (A) existing contracts or commitments or the terms sale or purchase of Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement or (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company;
(d) merge, consolidate or, other than goods in the ordinary course of business substantially consistent with past practice, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries;
(e) (i) increase the salary, wages, benefits, bonuses or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in enter into any commitment or transactions outside the ordinary course of business, and business consistent with past practice; (ii) acquire (for cash or shares of stock) (including, without limitation, by merger, consolidation, or acquisition of stock or assets) any corporation, partnership, other than business organization or any division thereof; (iii) incur, assume or pre-pay any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise as required by an accommodation become liable or responsible for, the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding obligations of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock ofperson, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
(i) sell, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse or otherwise dispose of any assets, propertiescontributions to, or Company Intellectual Propertyinvestments in, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregateany other person, except in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice;
(jA) agree to any exclusivity, non-competition or similar provision or covenant limiting the ability of the Company or any of its Subsidiaries to compete or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof)transactions contemplated hereby, (iiB) by any Applicable Law, including Regulation S-X borrowings under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings existing bank lines of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (viC) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate refinancing of existing indebtedness; (iv) authorize or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect to capital expenditures not provided for in excess of the amounts set forth Company's capital budget included in Part 6.01(n)(iSection 6.1(e) of the Company Disclosure ScheduleSchedule which are in excess of $100,000; (v) accelerate or delay collection of notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business consistent with past practice; (vi) delay or accelerate payment of accounts payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business consistent with past practice; (vii) vary the Company's inventory practices in any material respect from the Company's past practices; or (viii) enter into or amend any contract, agreement, commitment or arrangement to effectuate any prohibited matter set forth in this Section 6.1(f);
(og) instituteincrease the compensation or fringe benefits payable or to become payable to its directors, settle executive officers or agree employees, except for increases in the ordinary course of business in accordance with past practice, grant any severance or termination pay to settle any Proceedingsexecutive officer, director or other employee of the Company or any Company Subsidiary (other than as required by existing agreements or policies described in the Company Disclosure Schedule), except in accordance with past practice, or enter into any employment or severance agreement with, any director, executive officer or other employee of the Company or any Company Subsidiary or adopt or amend any Employee Benefit Plan; or
(h) 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.
(i) settle or compromise any suit or claim or threatened suit or claim where the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less amount involved is greater than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub100,000;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(rj) other than in the ordinary course of business or as contemplated by this Agreement consistent with past practice, (i) amend, modify, renew amend or terminateterminate any contract, (ii) waive, release, relinquish or assign any contract (or any of the Company's rights thereunder), right or claim, or grant (iii) cancel or forgive any release indebtedness owed to the Company or waiver underany Company Subsidiary;
(k) make any tax election not required by law or settle or compromise any tax liability;
(l) permit any insurance policy naming it as a beneficiary or a loss payable payee to be canceled or terminated without notice to Buyer, any Material Contract except in the ordinary course of business consistent with past practice;
(excluding the expiration of any Material Contract in accordance with its termsm) or enter into any new Contract that would have been a Material Contract if contract or agreement other than in existence on the date ordinary course of this Agreement, or (ii) renew or enter into any Contract business consistent with an Affiliate of the Company;
(s) voluntarily terminate, amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Actpast practice; or
(un) authorize, commit agree in writing or agree otherwise to take any of the foregoing actions. Notwithstanding anything set forth actions prohibited under this Section 6.1 or any action which would cause any representation or warranty in this Agreement to be or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly become untrue or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentenceincorrect.
Appears in 2 contracts
Samples: Merger Agreement (NPF Holding Corp), Merger Agreement (National Picture & Frame Co)
Conduct of the Company. The Company covenants and agrees thatFrom the date hereof until the Effective Time, except for matters (i) expressly permitted or as expressly contemplated by this Agreement, (ii) as set forth on Part in Section 6.01 of the Company Disclosure Schedule, as consented to in writing by Parent, as contemplated by or reasonably necessary to implement the Company Operating Plan (or, with respect to any initiative therein, reallocations among line items within such initiative that are not in the aggregate more burdensome to the Company in any material respect) or as required by Applicable Law, the Company shall, and shall cause each of its Subsidiaries to, conduct its business in all material respects in the ordinary course consistent with past practice and use its commercially reasonable efforts to (i) preserve intact its business organization, (ii) maintain in effect all of its material foreign, federal, state and local licenses, permits, consents, franchises, approvals and authorizations, and (iii) reasonably undertaken maintain its existing relationships with its material customers, lenders, suppliers and others having material business relationships with it and with Governmental Authorities with jurisdiction over the Company’s operations. Without limiting the generality of the foregoing, from the date hereof until the Effective Time, except as expressly contemplated by this Agreement, as set forth in connection with any COVID-19 MeasuresSection 6.01 of the Company Disclosure Schedule, as consented to in writing by Parent (solely in the case of the following clauses (d), (ive), (f), (g), (h), (i), (j) undertaken with the prior written and (p), such consent of Parent (which shall not to be unreasonably withheld, conditioned or delayed), as contemplated by or reasonably necessary to implement the Company Operating Plan (vor, with respect to any initiative therein, reallocations among line items within such initiative that are not in the aggregate more burdensome to the Company in any material respect) or as required by Applicable Law or the rules and regulations of Nasdaq, from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereofLaw, the Company (A) shallshall not, and nor shall cause each it permit any of its Subsidiaries to use commercially reasonable efforts to (1) conduct its business in the ordinary course in all material respects, substantially consistent with past practice, (2) to the extent consistent with the foregoing clause (1), maintain its business as a going concern and (3) keep available the services of its current officers and key employees and to preserve the goodwill of and maintain satisfactory relationships with those Persons having material business relationships with the Company and its Subsidiaries, and (B) shall not, and shall cause each of its Subsidiaries not to:
(a) amend the Company’s its certificate of incorporation or bylawsincorporation, or amend any certificate of incorporation or bylaws, bylaws or other comparable charter similar organizational documents (whether by merger, consolidation or organizational documents, of the Company’s Subsidiariesotherwise);
(b) other than with respect to a direct or indirect wholly owned Subsidiary of the Company, (i) establish a record date for, declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock, property or otherwise) in respect of, or enter into any agreement with respect to the voting of, any capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), (ii) split, reverse split, combine, subdivide combine or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) of the Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c), issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries or declare, set aside or pay any dividend or other distribution (whether in cash, stock or securities convertible property or exchangeable therefor)any combination thereof) in respect of the capital stock of the Company or its Subsidiaries, or (iv) purchaseredeem, redeem repurchase or otherwise acquire or offer to purchaseredeem, redeem repurchase, or otherwise acquire any Company Securities or any Company Subsidiary Securities, except for (i) dividends by any of its wholly owned Subsidiaries, (ii) regular quarterly cash dividends with customary record and payment dates on the net settlement shares of the Company Equity Awards or acquisitions Stock not in excess of $0.75 per share per quarter, (iii) repurchases of shares of Company Common Stock by in the ordinary course of business consistent with past practices (including as to volume) at then prevailing market prices pursuant to the Company’s share repurchase program as in effect from time to time and (iv) acquisitions, or deemed acquisitions, of Company Stock in connection with (A) the payment of the exercise price of Company Stock Options with Company Stock (including in connection with “net exercises”) and (B) required Tax withholding in connection with the exercise of Company Stock Options and the vesting or settlement of Company RSUs, in each case, to the extent such Company Stock Options and Company RSUs are outstanding on the date of this Agreement (and in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or such case, in accordance with their terms on the terms date of this Agreement) or are issued or granted after the ESPPdate of this Agreement as permitted by Section 6.01(c)(i)(B);
(ci) issue, deliver, deliver or sell, grantor authorize the issuance, announcedelivery or sale of, pledge, transfer, subject to any Lien, otherwise encumber or dispose shares of any equity interests Company Securities or Company Subsidiary Securities, other than (A) the issuance of any shares of the Company Stock upon (x) the exercise of Company Stock Options or incur any obligation to make any payments to any Person based on (y) upon the price or value settlement of any Company SecuritiesRSUs; and (B) annual director equity grants made in accordance with this Agreement; (C) equity grants to new hires or promoted employees in the ordinary course of business consistent with past practice; and (D) the grant of Company RSUs contemplated by Section 7.09 of the Company Disclosure Schedule, and in the case of grants under clauses (B), (C) and (D), provided that such grants shall be made on terms and conditions used by the Company with respect to Company RSUs in the ordinary course of business consistent with past practice and such other terms and conditions as set forth on Section 7.09 of the Company Disclosure Schedule, or (ii) amend any term of any Company Security or any Company Subsidiary Security (in each case, whether by merger, consolidation or otherwise);
(d) incur any capital expenditures or any obligations or liabilities in respect thereof, except for (i) those as may be contemplated by the plan described in Section 6.01(d) of the Company Disclosure Schedule and (ii) any other capital expenditures not to exceed $200,000,000 in the aggregate in any twelve-month period;
(e) acquire (by merger, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, any assets, securities, properties, interests or businesses, other than (i) the issuance of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement or (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP supplies and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company;
(d) merge, consolidate or, other than materials in the ordinary course of business substantially of the Company and its Subsidiaries in a manner that is consistent with past practice, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries;
(eii) (i) increase the salary, wages, benefits, bonuses or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms of existing employment or other compensation agreements contracts or arrangements in effect as of on the date hereof, (Biii) required leases or subleases under any which the Company Employee Plan pursuant to or one of its Subsidiaries is the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made tenant entered into in the ordinary course of business and substantially consistent (iv) acquisitions with past practice, or a purchase price (Dincluding assumed indebtedness) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made does not exceed $100,000,000 in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereofaggregate;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
(i) sell, assign, lease, license, pledge, lease or otherwise transfer, abandonor create or incur any Lien on, subject to any Lien, permit to lapse or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregate, except in the ordinary course of the Company’s or its Subsidiaries’ assets, securities, properties, interests or businesses, other than (i) sales of inventory or obsolete equipment in the ordinary course of business substantially consistent with past practice, (ii) sales of assets, securities, properties, interests or business with a sale price (including any related assumed indebtedness) that does not exceed $100,000,000 in the aggregate, (iii) pursuant to contracts or arrangements in effect on the date hereof, (iv) leases or subleases under which the Company or one of its Subsidiaries is the lessor entered into in the ordinary course of business, or (v) Permitted Liens;
(g) other than in connection with actions permitted by Section 6.01(d) or (e) or as required by existing agreements set forth on Section 4.06(c) of the Company Disclosure Schedule, make any loans, advances or capital contributions to, or investments in, any other Person, other than (i) in the ordinary course of business consistent with past practice, (ii) investments or capital contributions that are made alongside Parent or any of its Affiliates or (iii) loans, advances or capital contributions to, or investments in, wholly owned Subsidiaries of the Company;
(h) create, incur, assume, suffer to exist or otherwise be liable with respect to any indebtedness for borrowed money or guarantees thereof or issue or sell any debt securities, except for (i) indebtedness under any of the agreements set forth in Section 6.01(h)(i) of the Company Disclosure Schedule, (ii) up to $2,000,000,000 of indebtedness to refinance on market terms any indebtedness existing on the date hereof that is maturing within twelve months of such refinancing (which amount shall be reduced by any such refinanced indebtedness incurred under the immediately preceding clause (i)), (iii) guarantees by the Company of indebtedness of any wholly owned Company Subsidiary or (iv) any commercial paper issued in the ordinary course of business;
(i) other than in the ordinary course of business, enter into any agreement or arrangement that limits or otherwise restricts in any material respect the Company or any of its Subsidiaries from engaging or competing in any line of business, in any location or with any Person or (ii) enter into any agreement or arrangement that limits or otherwise restricts in any material respect any upstream Affiliates of the Company following consummation of the Mergers from engaging or competing in any line of business, in any location or with any Person;
(j) agree other than in the ordinary course of business, (i) amend or modify in any material respect or terminate (excluding terminations upon expiration of the term thereof in accordance with the terms thereof) any Company Material Contract or waive, release or assign any material rights, claims or benefits under any Company Material Contract, (ii) enter into any contract or agreement that would have been a Company Material Contract had it been entered into prior to the date of this Agreement or (iii) enter into, amend, modify or terminate any programming service distribution agreement;
(k) without prior consultation with Parent, (i) recognize any material new union, works council or other similar employee representative, except as required by Applicable Law, or (ii) enter into any material Collective Bargaining Agreement, or renew or enter into any material mid-term modification (excluding resolutions of grievances relating to or interpretations of a Collective Bargaining Agreement) of any existing Collective Bargaining Agreement;
(l) except as set forth on Section 7.09 of the Company Disclosure Schedule, grant to any exclusivitydirector or officer (as such terms are used for purposes of Section 16 of the 0000 Xxx) of the Company any increase in change in control, nonseverance, retention or termination pay (including any obligation to gross-competition up, indemnify or similar provision otherwise reimburse any such individual for any Tax incurred by any such individual, including under Section 409A or covenant limiting 4999 of the ability Code), other than any increase in a severance benefit arising directly from an increase in annual salary or annual cash bonus opportunity (for the avoidance of doubt, excluding the 2015 Supplemental Bonus Opportunity) to the extent such increase is permitted by this Agreement;
(m) except as set forth on Section 7.09 of the Company Disclosure Schedule, (i) increase the annual salary of any employee of the Company or any of its Subsidiaries to compete who holds the title of Executive Vice President or engage greater by more than 5% in the aggregate in any line fiscal year, except as required by the terms of business, with any Person existing agreement or in (ii) increase the cash bonus opportunity of any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result employee of so competing or engaging, or which would have any such effect on Parent the Company or any of its Affiliates after Subsidiaries who holds the Effective Timetitle of Executive Vice President or greater;
(n) except as set forth on Section 7.09 of the Company Disclosure Schedule, (i) other than as required by an existing agreement, adopt or amend any cash bonus plan or other variable compensation plan with a performance measurement period of greater than 12 months (excluding any period principally relating to an employee’s obligation to be employed on the payment date), (ii) establish or adopt any Title IV Plan, “excess benefit plan”, deferred compensation plan, severance or change in control plan or employee benefit plan that provides post-retirement health, medical, life insurance or death benefits to retired, current or former employees, directors or consultants of the Company or any of its Subsidiaries except as required to avoid excise tax under Section 4980B of the Code, unless such establishment or adoption occurs as part of an acquisition of any other company or business that is permitted or consented to under this Agreement, (iii) fail to continue to make all contributions required to be made to any Company Plan that is a Title IV Plan (for the avoidance of doubt, other than a Multiemployer Plan) under ERISA, the Code and Applicable Law or (iv) amend the benefit formula under any Company Plan that is a Title IV Plan (for the avoidance of doubt, other than any Multiemployer Plan) to increase the benefit accrual applicable to any participant or beneficiary thereof under such Company Plan;
(o) change the Company’s methods of financial accounting, except as required by concurrent changes in GAAP or in Regulation S-X of the 1934 Act, as agreed to by its independent public accountants;
(p) without limiting Section 8.10, settle, or offer or propose to settle, (A) any litigation, investigation, arbitration, proceeding or other claim involving or against the Company or any of its Subsidiaries or (B) any stockholder litigation or dispute against the Company or any of its officers or directors, except, in each case, where the sum of (x) any amount paid in connection with Contracts entered into with customers, contractors, distributors, resellers, partners settlement or suppliers of compromise plus (y) the financial impact to the Company and its Subsidiaries of any other terms of the settlement or similar arrangements, that compromise does not exceed $100,000,000 (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar after giving effect to any reasonably expected indemnification proceeds);
(q) adopt or publicly propose a plan of complete or partial liquidation or resolutions providing for or authorizing such restrictions existing on a liquidation or a dissolution, in each case, of the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent Company or any Significant Subsidiary of its Affiliates the Company;
(other than r) knowingly and intentionally take any action that would reasonably be expected to make any representation or warranty of the Company and its Subsidiaries) after hereunder inaccurate in any material respect at, or immediately prior to, the Effective Time;
(ks) adopt or change any of take the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect to capital expenditures in excess of the amounts action set forth in Part 6.01(n)(i) on Section 6.01 of the Company Disclosure Schedule;
Schedule (o) institute, settle or agree to settle any Proceedings, other than (i) it being understood and agreed that the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included exceptions contained in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 lead-in the aggregateto this Section 6.01 shall not apply with respect to this Section 6.01(s)); provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than in the ordinary course of business or as contemplated by this Agreement (i) amend, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an Affiliate of the Company;
(s) voluntarily terminate, amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;or
(t) conduct any reduction-in-force of employees agree, resolve or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Act; or
(u) authorize, commit or agree to take do any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentenceforegoing.
Appears in 2 contracts
Samples: Merger Agreement (Time Warner Cable Inc.), Merger Agreement (Charter Communications, Inc. /Mo/)
Conduct of the Company. The Company covenants and agrees that, except for matters (i) expressly permitted or expressly Except as otherwise contemplated by this Agreement, (ii) set forth on Part 6.01 of the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken with the prior written consent of Parent (which shall not be unreasonably withheld, conditioned or delayed), (v) required by Applicable Law or the rules and regulations of Nasdaq, from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereofTime, the Company (A) shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) shall conduct its their business in all material respects in the ordinary course in all material respects, substantially consistent with past practice, (2) practice and shall use their reasonable efforts to the extent consistent preserve intact their business organizations and relationships with the foregoing clause (1), maintain its business as a going concern third parties and (3) to keep available the services of its current their present officers and key employees and to preserve employees. Without limiting the goodwill generality of and maintain satisfactory relationships with those Persons having material business relationships with the Company and its Subsidiariesforegoing, and (B) shall notfrom the date hereof until the Effective Time, and shall cause each without the prior written consent of its Subsidiaries not toParent:
(a) amend the Company’s Company will not adopt or propose any change to its certificate of incorporation or bylaws, or amend any certificate of incorporation or bylaws, or other comparable charter or organizational documents, of the Company’s Subsidiaries;
(b) other than with respect to a direct or indirect wholly owned Subsidiary of the Company, (i) establish a record date for, declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock, property or otherwise) in respect of, or enter into any agreement with respect to the voting of, any capital stock of the Company or will not, and will not permit any of its Subsidiaries to, merge or consolidate with any other person or acquire a material amount of stock or assets of any other Person;
(c) the Company will not, and will not permit any of its Subsidiaries to, issue, sell, transfer, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable therefor)for, (ii) splitor options, reverse splitwarrants, combinecalls, subdivide commitments or reclassify or otherwise amend the terms rights of any capital stock (or securities convertible or exchangeable therefor) of the Company or kind to acquire, any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c), issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the any class or series of Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), or (iv) purchase, redeem or otherwise acquire or offer to purchase, redeem or acquire any Company Securities, except for the net settlement of Company Equity Awards or acquisitions of shares other than issuances of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPP;
(c) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company Securities, other than (i) upon the issuance of shares exercise of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are Options outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement or (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or August 24, 1999 (ii) the issuance of shares of Company Common Stock as required pursuant to purchase price adjustments under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement acquisition agreements set forth in Schedule 6.01(c) or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of in connection with the Company's 1998 Bonus Plan;
(d) mergethe Company will not, consolidate orand will not permit any of its Subsidiaries to, other than sell, lease, license or otherwise dispose of any Significant Subsidiary or any material amount of assets, securities or property except (i) pursuant to existing contracts or commitments and (ii) in the ordinary course of business substantially consistent with past practice, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries;
(e) (i) increase the salary, wages, benefits, bonuses or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
(ie) sell, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregate, except in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice;
(j) agree to any exclusivity, non-competition or similar provision or covenant limiting the ability of the Company or will not, and will not permit any of its Subsidiaries to compete or engage in take any line of business, with action that would make any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers representation and warranty of the Company and its Subsidiaries hereunder inaccurate in any respect at, or similar arrangementsas of any time prior to, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(kf) adopt or change any of the accounting methods used by the Company materially affecting its assetswill not, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and will not permit any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return in a manner tax election inconsistent with past practicepractice or settle or compromise any federal, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender any right to claim a material Tax refund, offset or other reduction in Tax foreign tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;; and
(ng) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;
(o) institutewill not, settle or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor and will not permit any of its Subsidiaries shall settle to, agree or agree commit to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than in the ordinary course of business or as contemplated by this Agreement (i) amend, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an Affiliate of the Company;
(s) voluntarily terminate, amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Act; or
(u) authorize, commit or agree to take do any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentenceforegoing.
Appears in 2 contracts
Samples: Merger Agreement (Afc Cable Systems Inc), Merger Agreement (Afc Cable Systems Inc)
Conduct of the Company. The Company covenants and agrees that, except Except for matters (i) expressly permitted or expressly contemplated by this Agreement, (ii) set forth on Part in Section 6.01 of the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measuresas expressly contemplated by this Agreement, (iv) undertaken as required by Applicable Law or with the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed), (v) required by Applicable Law or the rules and regulations of Nasdaq, from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereofTime, the Company (A) shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) to, conduct its business in the ordinary course in all material respects, substantially consistent with past practicepractice and use its reasonable best efforts to (i) preserve intact its present business organization (including, without limitation, as set forth in Schedule 6.01(i)), (2ii) to the extent consistent with the foregoing clause maintain in effect its material foreign, federal, state and local licenses, permits, consents, franchises, approvals and authorizations, (1), maintain its business as a going concern and (3iii) keep available the services of its current directors, officers and key employees employees, (iv) maintain and to preserve the goodwill of its cash and working capital balances in a manner consistent with past practice and (v) maintain satisfactory relationships with those Persons its customers, lenders, suppliers and others having material business relationships with it. Without limiting the generality of the foregoing, except for matters set forth in Section 6.01 of the Company and its SubsidiariesDisclosure Schedule, and as expressly contemplated by this Agreement, as required by Applicable Law or with the prior written consent of Parent (B) which consent shall not be unreasonably withheld, conditioned or delayed), from the date hereof until the Effective Time, the Company shall not, and nor shall cause each it permit any of its Subsidiaries not to:
(a) amend the Company’s its certificate of incorporation or bylawsincorporation, or amend any certificate of incorporation or bylaws, bylaws or other comparable charter similar organizational documents (whether by merger, consolidation or organizational documents, of the Company’s Subsidiariesotherwise);
(b) other than with respect to a direct or indirect wholly owned Subsidiary of the Company, (i) establish a record date forsplit, combine or reclassify any shares of its capital stock, (ii) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock, property or otherwise) in respect of, or enter into any agreement with respect to the voting of, any capital stock of the Company or any of its Subsidiaries (Subsidiaries, other than dividends and distributions by a direct or securities convertible or exchangeable therefor), (ii) split, reverse split, combine, subdivide or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) indirect wholly-owned Subsidiary of the Company to its parent or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c)redeem, issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), or (iv) purchase, redeem repurchase or otherwise acquire or offer to purchaseredeem, redeem repurchase, or otherwise acquire any Company Securities or any Company Subsidiary Securities, except for other than (A) the net settlement of acquisition by the Company Equity Awards or acquisitions of shares of Company Common Stock by in connection with the Company, in each case, in satisfaction surrender of shares of Company Stock by holders of Company Equity Stock Options in order to pay the exercise price thereof, (B) the withholding of shares of Company Stock to satisfy tax obligations with respect to awards granted pursuant to the Company Stock Plans, (C) the acquisition by the Company of Company Stock Options, Company Restricted Shares, Company RSUs and Company Awards of the applicable withholding taxes or in accordance connection with the terms forfeiture of such awards and (D) as required by any Employee Plan as in effect on the ESPPdate of this Agreement;
(c) (i) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, Lien or otherwise encumber or dispose of any equity interests of the Company Securities or incur any obligation to make any payments to any Person based on the price or value of any Company Subsidiary Securities, other than (i) the issuance of (A) any shares of Company Common Stock pursuant to (A) upon the terms exercise of Company Equity Stock Options or settlement of Company RSUs or Company Awards that are outstanding on the date hereofof this Agreement, in each case in accordance with the applicable their terms of such Company Equity Awards as in effect on the date of this Agreement or and (B) grants or awards of any Company Subsidiary Securities or Company Equity Awards required to be made pursuant to the terms of existing employment Company or any other compensation agreements or arrangements in effect as Subsidiary of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent Company or (ii) the issuance amend any term of shares of any Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement Security or any Company Subsidiary Security (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company in each case, whether by merger, consolidation or another wholly owned Subsidiary of the Companyotherwise);
(d) mergeincur any capital expenditures or any obligations or liabilities in respect thereof, consolidate or, other than except for (i) those contemplated by the capital expenditure budget as set forth in Section 6.01(d) of the Company Disclosure Schedule and (ii) any unbudgeted capital expenditures not to exceed $100,000 individually or $250,000 in the ordinary course of business substantially consistent with past practice, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or aggregate;
(e) adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of reorganization, each with respect to the Company or any of its Subsidiaries;
(ef) acquire (i) increase the salaryby merger, wagesconsolidation, benefitsacquisition of stock or assets or otherwise), bonuses directly or indirectly, any assets, securities, properties, interests or businesses, other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made than supplies in the ordinary course of business of the Company and substantially its Subsidiaries in a manner that is consistent with past practices;
(g) sell, lease or otherwise transfer, or create or incur any Lien on, any of the Company’s or its Subsidiaries’ assets, securities, properties, interests or businesses (or permit any Company Registered IP to lapse, expire or be abandoned), other than (i) pursuant to existing contracts or commitments or (ii) sales of inventory or obsolete equipment in the ordinary course of business consistent with past practices;
(h) (i) repurchase, prepay or incur any Indebtedness, including by way of a guarantee or an issuance or sale of debt securities, or issue or sell options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, enter into any “keep well” or other Contract to maintain any financial statement or similar condition of another person or enter into any arrangement having the economic effect of any of the foregoing (other than (A) in connection with the financing of ordinary course trade payables consistent with past practice or (B) accounts payable in the ordinary course of business consistent with past practice), or (Dii) in connection with changes make any loans, advances or capital contributions to, or investments in, any other Person (other than (A) to benefits as part the Company or any of annual enrollment; provided that such changes made as part its Subsidiaries or (B) accounts receivable and extensions of annual enrollment are made credit in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Lawadvances in expenses to employees, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets each case in the ordinary course of business and in amounts substantially consistent with past practice);
(i) sellenter into, assign, lease, license, pledge, transfer, abandon, subject to amend or modify in any Lien, permit to lapse material respect or terminate any Material Contract or otherwise dispose of waive, release or assign any assetsmaterial rights, properties, claims or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregate, except in the ordinary course benefits of the Company’s Company or any of its Subsidiaries’ business substantially consistent with past practice;
(j) agree to any exclusivity, non-competition competition, most favored nation, or similar provision or covenant limiting restricting the ability of the Company or Company, any of its Subsidiaries to compete or engage any of their respective Affiliates, from competing in any line of business, business or with any Person or in any geographic areaarea or engaging in any activity or business (including with respect to the development, manufacture, marketing or distribution of their respective products or services), or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers consummation of the Company Merger or the Closing Date;
(i) hire any new employee to whom a written offer of employment has not previously been offered and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar accepted prior to any such restrictions existing on the date of this Agreement and (zother than employees with annual compensation of less than $150,000 in the aggregate) would not have or, after the date of this Agreement, extend any such effect (or otherwise restrict or bind) on Parent new offers of employment with the Company or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change Subsidiaries to any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof)individual, (ii) grant to any current or former director, officer, employee or consultant of the Company or any of its Subsidiaries any (A) increase in compensation, (B) bonus or (C) benefits in addition to those pursuant to arrangements in effect on the date hereof, (iii) grant to any current or former director, officer, employee or consultant of the Company or any of its Subsidiaries any severance or termination pay or benefits or any increase in severance, change of control or termination pay or benefits, (iv) establish, adopt, enter into or amend any Employee Plan (other than offer letters that contemplate “at will” employment without severance benefits, where permitted by Applicable Law or employment agreements required by non-U.S. Applicable Law) or collective bargaining agreement, in each case except as required by Applicable Law, (v) take any action to amend or waive any performance or vesting criteria or accelerate any rights or benefits or take any action to fund or in any other way secure the payment of compensation or benefits under any Employee Plan except to the extent required pursuant to the terms thereof or Applicable Law, or (vi) make any Person a beneficiary of any retention or severance plan, agreement or other arrangement under which such Person is not as of the date of this Agreement a beneficiary which would entitle such Person to vesting, acceleration or any other right as a consequence of consummation of the transactions contemplated by this Agreement and/or termination of employment;
(l) (i) write-down any of its material assets, including any capitalized inventory, or (ii) make any material change in any method of financial accounting principles, method or practices, in each case except for any such change required by GAAP or Applicable Law, including Regulation S-X under the Securities Act, or Exchange Act (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of each case following consultation with the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company’s independent auditor), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, make or change or revoke any material Tax election, change any annual Tax accounting period, file adopt or change any material amended method of Tax Return accounting, materially amend any Tax Returns or file any claim for material Tax Return in a manner inconsistent with past practicerefunds, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of enter into any material TaxTax allocation agreement, Tax sharing agreement or Tax indemnity agreement (other than any customary commercial or financing agreements, entered into in the ordinary course of business consistent with past practices), settle any material Tax Proceedingclaim, audit or assessment, or surrender any right to claim a material Tax refund, refund (including any such refund to the extent it is used to offset or other reduction in otherwise reduce Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business);
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;
(oi) institute, pay, discharge, compromise, settle or satisfy (or agree to settle do any Proceedings, other than (iof the preceding with respect to) the settlement of any claims, liabilities or obligations (A) reserved against on the most recent balance sheet whether absolute, accrued, asserted or unasserted, contingent or otherwise), in excess of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) individual case, other than (x) as required by their terms as in the ordinary course of business or as contemplated by this Agreement (i) amend, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence effect on the date of this Agreement, (y) claims, liabilities or obligations reserved against on the Company Balance Sheet (for amounts not in excess of such reserves), or (z) incurred since the date of such financial statements in the ordinary course of business consistent with past practice; provided that, in the case of each of (x), (y) or (z), the payment, discharge, settlement or satisfaction of such claim, liability or obligation does not include any material obligation (other than the payment of money) to be performed by the Company or any of its Subsidiaries following the Closing, (ii) renew waive, relinquish, release, grant, transfer or enter into assign any right with a value of more than $100,000 in any individual case except in the ordinary course of business consistent with past practice, or (iii) waive any material benefits of, or agree to modify in any adverse respect, or fail to enforce, or consent to any matter with respect to which its consent is required under, any confidentiality, standstill or similar Contract with an Affiliate to which the Company or any of the Companyits Subsidiaries is a party;
(so) voluntarily terminateengage in (i) any trade loading practices or any other promotional sales or discount activity with any customers or distributors with any intent of accelerating to prior fiscal quarters (including the current fiscal quarter) sales to the trade or otherwise that would otherwise be expected (based on past practice) to occur in subsequent fiscal quarters, amend or fail (ii) any practice which would have the effect of accelerating to renew or preserve prior fiscal quarters (including the current fiscal quarter) collections of receivables that would otherwise be expected (based on past practice) to be made in subsequent fiscal quarters, (iii) any Company Communications License as set forth on Part 6.01(s) practice which would have the effect of postponing to subsequent fiscal quarters payments by the Company Disclosure Schedule;
or any of its Subsidiaries that would otherwise be expected (tbased on past practice) conduct to be made in prior fiscal quarters (including the current fiscal quarter) or (iv) any reduction-in-force of employees other promotional sales or other service providers or otherwise implement any layoffsdiscount activity, in each case that could implicate in clauses (i) through (iv) in a manner outside the WARN Actordinary course of business consistent with past practices; or
(up) authorizeagree, resolve or commit or agree to take do any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentenceforegoing.
Appears in 2 contracts
Samples: Merger Agreement (ChyronHego Corp), Merger Agreement (ChyronHego Corp)
Conduct of the Company. The Company covenants and agrees thatFrom the date hereof until the earlier to occur of the Closing or the termination of this Agreement pursuant to its terms, except for matters (i) as expressly permitted or expressly contemplated by this Agreement, (ii) set forth on Part 6.01 of consented to in writing by the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken with the prior written consent of Parent Sponsor (which consent shall not be unreasonably withheld, conditioned or delayed), (v) or required by Applicable applicable Law or the rules and regulations of Nasdaq, from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereofNYSE Amex, the Company (Ai) shallshall conduct its business in the ordinary course, and (ii) shall cause each of its Subsidiaries to use commercially reasonable efforts to (1x) conduct preserve intact its present business in the ordinary course in all material respects, substantially consistent organization and relationships with past practicethird parties, (2y) to the extent consistent with the foregoing clause (1), maintain in effect all of its business as a going concern Permits and (3z) keep available the services of its current present directors, officers and key employees and to preserve the goodwill of and maintain satisfactory relationships with those Persons having material business relationships with the Company and its Subsidiaries, and (Biii) shall not, and shall cause each of its Subsidiaries not to:
(a) except in connection with the Proposed Charter Amendments and except as set forth in Section 5.15, amend the Company’s its amended and restated certificate of incorporation or bylawsbylaws (whether by merger, consolidation or amend any certificate of incorporation or bylaws, or other comparable charter or organizational documents, of the Company’s Subsidiariesotherwise);
(b) except as set forth in Section 5.12, split, combine or reclassify any shares of capital stock or other than with respect to a direct or indirect wholly owned Subsidiary equity securities of the Company, (i) establish a record date for, Company or declare, set aside or pay any dividends on, dividend or make any other distributions distribution (whether in cash, stock, stock or property or otherwiseany combination thereof) in respect ofof the capital stock or other equity securities of the Company, or enter into any agreement with respect to the voting ofredeem, any capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), (ii) split, reverse split, combine, subdivide or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) of the Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c), issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), or (iv) purchase, redeem repurchase or otherwise acquire or offer to purchaseredeem, redeem repurchase, or otherwise acquire any Company Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPP;
(c) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company Securities, other than (i) the issuance of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement or (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment capital stock or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary securities of the Company;
(c) except in connection with the Proposed Charter Amendments or the Proposed Warrant Amendment Agreement, (x) issue, deliver or sell, or authorize the issuance, delivery or sale of, any capital stock, warrant or other equity securities of the Company, or (y) amend any term of any capital stock or other equity securities of the Company (in each case, whether by merger, consolidation or otherwise);
(d) mergeexcept as set forth in Section 5.12, consolidate oracquire (by merger, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, any material assets, securities, properties, or businesses, other than in the ordinary course of business substantially consistent with past practice, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiariesbusiness;
(e) (i) increase the salarysell, wageslease or otherwise transfer, benefitsor create or incur any Lien on, bonuses any assets, securities, properties, or other cash compensation payable or to become payable to businesses of the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made than in the ordinary course of business and substantially consistent with past practicebusiness;
(f) make any material loans, advances or capital contributions to, or investments in, any other Person;
(Dg) create, incur, assume, suffer to exist or otherwise be liable with respect to any indebtedness for borrowed money or guarantees thereof;
(h) enter into any hedging arrangements;
(i) enter into or amend any Company Contract or enter into any agreement or arrangement that limits or otherwise restricts in connection any respect the Company, or any successor thereto, or that could, after the Closing Date, limit or restrict in any respect the Company from engaging or competing in any line of business, in any location or with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made any Person or, except in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan otherwise waive, release or under Applicable Lawassign any material rights, enter into, adopt, amend (including by accelerating the vesting, payment claims or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
(i) sell, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregate, except in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice;
(j) agree increase compensation, bonus or other benefits payable to any exclusivitydirector, non-competition officer or similar provision or covenant limiting the ability employee of the Company or any of its Subsidiaries to compete or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective TimeCompany;
(k) adopt or change any the Company’s methods of the accounting methods used by the Company materially affecting its assets, liabilities or businessaccounting, except for such changes that are as required by (i) GAAP (concurrent changes in Law or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization)GAAP;
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loanssettle, guaranteesor offer or propose to settle, advance any material litigation, investigation, arbitration, proceeding or capital contribution between the Company and any of its wholly-owned Subsidiaries other claim involving or between any wholly-owned Subsidiaries of against the Company, (i) incurincluding any litigation, issuearbitration, proceeding or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse dispute that relates to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit AgreementTransactions;
(m) make, make or change or revoke any material Tax election, change any annual Tax accounting period, adopt or change any method of Tax accounting, materially amend any Tax Returns or file claims for material Tax refunds, enter any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceedingclaim, audit or assessment, or surrender any right to claim a material Tax refund, refund or offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make take any commitment with respect action or omit to capital expenditures take any action that is reasonably likely to result in excess any of the amounts conditions set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;Article VI not being satisfied; or
(o) instituteagree, settle resolve or agree commit to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than in the ordinary course of business or as contemplated by this Agreement (i) amend, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an Affiliate of the Company;
(s) voluntarily terminate, amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Act; or
(u) authorize, commit or agree to take do any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentenceforegoing.
Appears in 2 contracts
Samples: Framework Agreement (Sports Properties Acquisition Corp.), Framework Agreement (Medallion Financial Corp)
Conduct of the Company. The Company covenants and agrees thatFrom the date hereof until the Effective Time, except for matters (i) expressly permitted or except as expressly contemplated by this Agreement, (ii) set forth on Part 6.01 of the Company Disclosure Schedule, unless Parent shall otherwise approve in writing (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken with the prior written consent of Parent (which shall such approval not to be unreasonably withheld, conditioned delayed or delayed), conditioned) and (viii) except as required by Applicable Law or the rules and regulations of Nasdaq, from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereofLaw, the Company (A) shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) to, conduct its business in the ordinary course in all material respects, substantially consistent with past practice, (2) practice and to the extent consistent with the foregoing clause therewith, use its reasonable best efforts to (1)A) preserve intact its present business organization, (B) maintain in effect all of its business as a going concern foreign, federal, state and local licenses, permits, consents, franchises, approvals and authorizations, (3C) keep available the services of its current directors, officers and key employees and to preserve the goodwill of and (D) maintain satisfactory relationships with those Persons its customers, lenders, suppliers and others having material business relationships with it. Without limiting the generality of the foregoing, (i) except as expressly contemplated by this Agreement, (ii) unless Parent shall otherwise approve in writing (such approval not to be unreasonably withheld, delayed or conditioned) and (iii) except as required by Applicable Law, the Company and its Subsidiaries, and (B) shall not, and nor shall cause each it permit any of its Subsidiaries not to:
(a) amend the Company’s certificate its articles of incorporation or bylawsincorporation, or amend any certificate of incorporation or bylaws, bylaws or other comparable charter similar organizational documents (whether by merger, consolidation or organizational documents, of the Company’s Subsidiariesotherwise);
(b) other than with respect to a direct or indirect wholly owned Subsidiary of the Company, (i) establish a record date forsplit, combine or reclassify any shares of its capital stock, (ii) declare, set aside or pay any dividends on, dividend or make any other distributions distribution (whether in cash, stock, stock or property or otherwiseany combination thereof) in respect of its capital stock, except for (A) dividends by any of its wholly-owned Subsidiaries to the Company or to other wholly-owned Subsidiaries and (B) regular quarterly cash dividends by the Company with customary record and payment dates on the shares of Company Stock not in excess of $0.14 per share per quarter or (iii) redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any Company Securities or any Company Subsidiary Securities, except pursuant to any Company Stock Plan or any Company Stock Option (including for purposes of satisfying applicable tax withholding requirements and payment of the exercise price in respect of any Company Stock Option);
(c) except as provided in Section 6.01(j), (i) issue, deliver or sell, or authorize the issuance, delivery or sale of, any Company Securities or enter into Company Subsidiary Securities, other than the issuance of (A) any agreement shares of the Company Stock upon the exercise of Company Stock Options that are outstanding on the date of this Agreement in accordance with the terms of those options on the date of this Agreement and (B) any Company Subsidiary Securities to the Company or any other wholly owned Subsidiary of the Company or (ii) amend any term of any Company Security or any Company Subsidiary Security (in each case, whether by merger, consolidation or otherwise);
(d) incur any capital expenditures or any obligations or liabilities in respect thereof, except for (i) those contemplated by the capital expenditure budget that has been made available to Parent prior to the date of this Agreement and (ii) any unbudgeted capital expenditures not to exceed $10,000,000 individually or $20,000,000 in the aggregate;
(e) acquire (by merger, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, any assets, securities, properties, interests or businesses, other than (i) supplies in the ordinary course of business consistent with past practice and (ii) acquisitions with a purchase price (including related assumed indebtedness) that do not exceed $25,000,000 individually or $50,000,000 in the aggregate;
(f) (i) sell, lease or otherwise transfer, or create or incur any Lien on, any of the Company’s or its Subsidiaries’ assets, securities, properties, interests or businesses, other than (A) sales of inventory or obsolete equipment in the ordinary course of business consistent with past practice, (B) sales of assets, securities, properties, interests or businesses with a sale price (including any related assumed indebtedness) that do not exceed $10,000,000 individually or $20,000,000 in the aggregate and (C) Permitted Liens or (ii) sell, lease, license or otherwise dispose of or permit to lapse any material Intellectual Property right, other than grants of non-exclusive licenses with respect to the voting of, any capital stock Intellectual Property of the Company or any of its Subsidiaries in the ordinary course of business consistent with past practice;
(g) other than in connection with actions permitted by Section 6.01(e) or securities convertible with wholly-owned Subsidiaries, make any loans, advances or exchangeable therefor)capital contributions to, or investments in, any other Person;
(h) (i) create, incur, assume, suffer to exist or prepay any indebtedness for borrowed money or guarantees thereof other than in the ordinary course of business consistent with past practice, and in an amount that does not exceed $50,000,000 in the aggregate or (ii) splitenter into, reverse splitmodify in any material respect or terminate any material interest rate swaps or hedging arrangements except, combinein the case of hedging arrangements, subdivide in the ordinary course of business consistent with past practice;
(i) (i) enter into any contract, agreement, arrangement or reclassify understanding that would constitute a Material Contract if it had been entered into as of the date hereof or (ii) amend, modify in any material respect or terminate any Material Contract or any contract, agreement or understanding referred to in clause (i) or otherwise amend waive, release or assign any material rights, claims or benefits of the Company or any of its Subsidiaries thereunder;
(j) except as required to comply with Applicable Law or any Employee Plan in accordance with its terms on the date of this Agreement, (i) increase compensation, bonuses or other benefits payable to any capital stock director or employee of the Company or any of its Subsidiaries at the executive officer level; (ii) increase compensation, bonuses or securities convertible other benefits payable to any employee or exchangeable therefor) independent contractor of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice and to the extent not material; (iii) enter into, adopt or amend in any material respect any severance or retention plan, arrangement or policy applicable to any director, executive officer, employee or independent contractor, except as expressly provided in Section 6.01(cthe case of non-officer individuals who are newly hired or promoted after the date of this Agreement in the ordinary course of business consistent with past practice; (iv) enter into, adopt or amend in any material respect, including anything that would be covered in whole or in part by the foregoing clause (iii), issue any employment, change of control, compensation, bonus, profit-sharing, stock option or authorize other stock related rights or other forms of incentive or deferred compensation, retirement benefits or other benefit agreement, plan, arrangement or policy applicable to any director or executive officer or, except in the issuance ordinary course of business consistent with past practice, any other securities in respect of, in lieu of employee or in substitution for, shares of capital stock independent contractor of the Company or any of its Subsidiaries (and except in the case of non-officer individuals who are newly hired or securities convertible or exchangeable therefor), or (iv) purchase, redeem or otherwise acquire or offer to purchase, redeem or acquire any Company Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPP;
(c) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company Securities, other than (i) the issuance of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement or (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company;
(d) merge, consolidate or, other than promoted in the ordinary course of business substantially consistent with past practice; (v) pay based on, enter into strategic alliance accrue or similar legal partnership with certify performance level achievements for employees participating in a plan, program or arrangement at levels in excess of actually achieved performance in respect of any Personcomponent of an incentive-based award that requires achievement at a specified level of performance; (vi) amend or waive any performance or vesting criteria or accelerate vesting, file a voluntary petition for bankruptcy exercisability, distribution, settlement or liquidationfunding under any Employee Plan; or (vii) grant, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement authorize the grant of, any new bonus opportunities or resolutions providing set performance targets for any bonus opportunities;
(k) change the Company’s methods of accounting, except as required by concurrent changes in GAAP or authorizingin Regulation S-X of the 1934 Act, complete as agreed to by its independent public accountants;
(l) settle, or partial bankruptcyoffer or propose to settle, liquidation(i) any material litigation, dissolutioninvestigation, mergerarbitration, consolidation, restructuring, recapitalization proceeding or other reorganization of claim involving or against the Company or any of its Subsidiaries;
(e) (i) increase the salary, wages, benefits, bonuses or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan any stockholder litigation or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
(i) sell, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregate, except in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice;
(j) agree to any exclusivity, non-competition or similar provision or covenant limiting the ability of dispute against the Company or any of its Subsidiaries to compete officers or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, directors or (iii) by any Governmental Authority litigation, arbitration, proceeding or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse dispute that relates to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreementtransactions contemplated hereby;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;
(o) institute, settle or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(qn) fail enter into any bottling appointment, license agreement to maintain distribute product, bottler funding support agreement, or any ancillary agreement or amendment to any of the foregoing, in all material respects any Insurance Policies;
(r) each case, other than in the ordinary course of business or as contemplated by this Agreement (i) amend, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance consistent with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an Affiliate of the Company;
(s) voluntarily terminate, amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Actpast practice; or
(uo) authorizeagree, resolve or commit or agree to take do any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentenceforegoing.
Appears in 2 contracts
Samples: Agreement and Plan of Merger (Pepsiamericas Inc/Il/), Merger Agreement (Pepsico Inc)
Conduct of the Company. The Company covenants and agrees that, except Except for matters (i) expressly permitted or expressly contemplated by this Agreement, (ii) Agreement or as set forth on Part in Section 6.01 of the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken except as required by Applicable Law or except with the prior written consent of Parent (which shall not be unreasonably withheld, conditioned or delayed), (v) required by Applicable Law or the rules and regulations of NasdaqParent, from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereofuntil the Effective Time, the Company (A) shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) to, conduct its business in the ordinary course in all material respectscourse, substantially consistent with past practice, and use its commercially reasonable efforts to (2i) to the extent consistent with the foregoing clause preserve intact its Intellectual Property, business organization and material assets, (1), maintain its business as a going concern and (3ii) keep available the services of its current directors, officers and key employees employees, (iii) maintain in effect all of its Governmental Authorizations and to preserve the goodwill of and (iv) maintain satisfactory relationships with those Persons customers, lenders, suppliers, licensors, licensees, distributors and others having material business relationships with the Company. Without limiting the generality of the foregoing, except for matters expressly permitted or contemplated by this Agreement or as set forth in Section 6.01 of the Company and its SubsidiariesDisclosure Schedule or except as required by Applicable Law, and (B) the Company shall not, and nor shall cause each it permit any of its Subsidiaries not to, do any of the following without the prior written consent of Parent:
(a) amend the Company’s certificate of incorporation or bylawsincorporation, or amend any certificate of incorporation or bylaws, bylaws or other comparable charter or organizational documents, documents of the Company’s SubsidiariesSubsidiaries (whether by merger, consolidation or otherwise);
(b) other than with respect to a direct or indirect wholly owned Subsidiary of the Company, (i) establish a record date for, declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock, property or otherwise) in respect of, or enter into any agreement with respect to the voting of, any capital stock of the Company or any of its Subsidiaries Subsidiaries, other than dividends and distributions by a direct or indirect wholly owned Subsidiary of the Company to its parent (except distributions under the ESPP in the ordinary course and for distributions resulting from the vesting or securities convertible or exchangeable thereforexercise of Company Compensatory Awards), (ii) split, reverse split, combine, subdivide combine or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) of the Company or any of its Subsidiaries, (iii) except as expressly otherwise provided in Section 6.01(c)) below, issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor)Subsidiaries, or (iv) purchase, redeem or otherwise acquire or offer to purchase, redeem or acquire any Company Securities or Company Subsidiary Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Company, in each case, Company in satisfaction by holders of Company Equity Compensatory Awards of the applicable exercise price and/or withholding taxes taxes, or (v) take any action that would result in accordance with the terms any amendment, modification or change of any term of any Indebtedness of the ESPPCompany or any of its Subsidiaries;
(c) (i) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, Lien or otherwise encumber or dispose of any equity interests of the Company Securities or incur any obligation to make any payments to any Person based on the price or value of any Company Subsidiary Securities, other than (iA) the issuance of shares of Company Common Stock upon the exercise of Company Stock Options or pursuant to the terms of the Company RSUs that are outstanding on the date of this Agreement, in each case in accordance with the applicable equity award’s terms as in effect on the date of this Agreement, (B) the issuance of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereof, ESPP and in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement or Section 2.06(d), (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (iiC) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary upon conversion of the Company to Convertible Notes, or (ii) amend any term of any Company Security or any Company Subsidiary Security (in each case, whether by merger, consolidation or otherwise), or take any action (other than the Merger) that would cause an adjustment of the “Conversion Rate” as set forth in the Indenture governing the Company or another wholly owned Subsidiary of the CompanyConvertible Notes;
(d) merge, consolidate or, other than in the ordinary course of business substantially consistent with past practice, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of reorganization, each with respect to the Company or any of its Subsidiaries;
(e) (i) increase make any capital expenditures or incur any obligations or liabilities in respect thereof in excess of $2,000,000 in the salary, wages, benefits, bonuses or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractorsaggregate in any fiscal quarter, except for increases (Aas set forth on Section 6.01(e) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereofDisclosure Schedule;
(f) hire, engage or terminate the employment or engagement of acquire (other than for cause, as determined by the Companyi) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property assets or capital stock of, or make any loans, advances or capital contribution to of any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise), or (ii) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, any other material assets (other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets acquired in the ordinary course of business and in amounts substantially consistent with past practice);
(ig) sell, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse Lien or otherwise dispose of any assets, properties, or Company of its Intellectual Property, in each case having a value in excess material assets or material properties except (i) as permitted by Section 6.01(l)(i), (ii) pursuant to existing contracts or commitments, (iii) sales of $500,000 individually inventory or $5,000,000 in the aggregate, except used equipment in the ordinary course of business consistent with past practice, or (iv) Permitted Liens incurred in the Company’s or its Subsidiaries’ ordinary course of business substantially consistent with past practice;
(h) (i) hire or engage any employees (except as set forth on Section 6.01(h) of the Company Disclosure Schedule), consultants or contractors, or induce or encourage any employees, consultants or contractors to resign from the Company or any of the Subsidiaries, or promote any employees, or transfer any employees, or change the employment status or titles or terms of employment of any employees; or (ii) increase the salary or other compensation (of any type or form) payable or to become payable by the Company or any of the Subsidiaries to any of their employees, workers, consultants, contractors, or advisors, or (iii) modify any existing salary, bonus, commission, severance, equity compensation or other equity arrangement or any other compensatory arrangement with any such Person (including under any profit sharing, management by objectives, incentive, gainsharing, competency or performance plan) or modify or waive any of the terms or conditions thereof or the performance or other criteria or conditions to payment or earning thereof, or (iv) reprice any right to acquire Company Securities or Company Subsidiary Securities or amend or accelerate or waive any vesting terms related to any award of, or award with respect to, any Company Securities or Company Subsidiary Securities held by any such Person, or (v) declare, pay, commit to, approve, or undertake any obligation of any other kind for the payment by the Company or any of the Subsidiaries of a bonus, commission or other additional salary, compensation or employee benefits to any such Person (including under any profit sharing, management by objectives, incentive, gainsharing, competency or performance plan);
(i) (A) write-down any of its material assets, including any capitalized inventory or Company IP, or (B) make any change in any method of financial accounting principles, method or practices, in each case except for any such change required by GAAP or Applicable Law, including Regulation S-X under the Exchange Act (in each case following consultation with the Company’s independent auditor);
(j) (A) repurchase, prepay or incur any Indebtedness, including by way of a guarantee or an issuance or sale of debt securities, or issue or sell options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, enter into any “keep well” or other Contract to maintain any financial statement or similar condition of another person or enter into any arrangement having the economic effect of any of the foregoing (other than (i) in connection with the financing of ordinary course trade payables consistent with past practice or (ii) accounts payable in the ordinary course of business consistent with past practice), or (B) make any loans, advances or capital contributions to, or investments in, any other Person (other than (i) to the Company or any of its Subsidiaries or (ii) accounts receivable and extensions of credit in the ordinary course of business, and advances in expenses to employees, in each case in the ordinary course of business consistent with past practice);
(k) agree to any exclusivity, non-competition competition, most favored nation, or similar provision or covenant limiting restricting the ability of the Company or Company, any of its Subsidiaries to compete or engage any of their respective Affiliates, from competing in any line of business, business or with any Person or in any geographic areaarea or engaging in any activity or business (including with respect to the development, manufacture, marketing or distribution of their respective products or services), or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Timeconsummation of the Merger or the Closing Date;
(l) enter into any Contract, exceptor relinquish or terminate any Contract or other right, in each case, any individual case with an annual value in connection excess of $100,000 or with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers a value over the life of the Contract in excess of $300,000, other than (i) entering into software license agreements, or the renewal of any existing software license agreements, where the Company and or any of its Subsidiaries or similar arrangements, that (x) are made is the licensor in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, entering into service or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases maintenance contracts in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between consistent with past practice pursuant to which the Company and or any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse is providing services to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereofcustomers, (iii) assumeentering into non-exclusive distribution, guarantee marketing, reselling or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit consulting agreements in the ordinary course of business, (v) amend, modify or waive any provision business consistent with past practice that provide for distribution of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver)a Company Product by a third party, or (viiv) other than entering into non-exclusive OEM agreements in the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreementordinary course of business consistent with past practice that are terminable without penalty within twelve months;
(mi) make, make or change or revoke any material Tax election, change any annual Tax accounting period, file adopt or change any material amended method of Tax Return accounting, amend any Tax Returns or file any material claim for Tax Return in a manner inconsistent with past practicerefunds, enter into any “closing agreement” within , enter into any Tax allocation agreement, Tax sharing agreement or Tax indemnity agreement (other than any customary commercial or financing agreements, entered into in the meaning ordinary course of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Taxbusiness consistent with past practices), settle any material Tax Proceedingclaim, audit or assessment, or surrender any right to claim a material Tax refund, refund (including any such refund to the extent it is used to offset or other reduction in otherwise reduce Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business);
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;
(oi) institute, pay, discharge, compromise, settle or satisfy (or agree to settle do any Proceedings, other than (iof the preceding with respect to) the settlement of any claims, liabilities or obligations (A) reserved against on the most recent balance sheet whether absolute, accrued, asserted or unasserted, contingent or otherwise), in excess of the Company included $100,000 in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) individual case, other than (x) as required by their terms as in the ordinary course of business or as contemplated by this Agreement (i) amend, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence effect on the date of this Agreement, (y) claims, liabilities or obligations reserved against on the Company Balance Sheet (for amounts not in excess of such reserves), or (z) incurred since the date of the Company Balance Sheet in the ordinary course of business consistent with past practice, provided that, in the case of each of (x), (y) or (z), the payment, discharge, settlement or satisfaction of such claim, liability or obligation does not include any material obligation (other than the payment of money) to be performed by the Company or any of its Subsidiaries following the Closing Date, (ii) renew waive, relinquish, release, grant, transfer or enter into assign any Contract right with an Affiliate a value of more than $100,000 in any individual case except in the Company;
ordinary course of business consistent with past practice, (siii) voluntarily terminatewaive any material benefits of, amend or agree to modify in any adverse respect, or fail to renew enforce, or preserve consent to any matter with respect to which its consent is required under, any confidentiality, standstill or similar Contract to which the Company Communications License as or any of its Subsidiaries is a party, or (iv) pay any fees and expenses incurred in connection with the transactions contemplated by this Agreement and set forth on Part 6.01(sSection 6.01(n)(iv) of the Company Disclosure Schedule, in excess of $100,000 in the aggregate;
(to) conduct engage in (i) any reduction-in-force trade loading practices or any other promotional sales or discount activity with any customers or distributors with any intent of employees accelerating to prior fiscal quarters (including the current fiscal quarter) sales to the trade or that would otherwise be expected (based on past practice) to occur in subsequent fiscal quarters, (ii) any practice which would have the effect of accelerating to prior fiscal quarters (including the current fiscal quarter) collections of receivables that would otherwise be expected (based on past practice) to be made in subsequent fiscal quarters, (iii) any practice which would have the effect of postponing to subsequent fiscal quarters payments by the Company or any of its Subsidiaries that would otherwise be expected (based on past practice) to be made in prior fiscal quarters (including the current fiscal quarter) or (iv) any other service providers promotional sales or otherwise implement any layoffsdiscount activity, in each case that could implicate in clauses (i) through (iv) in a manner outside the WARN Actordinary course of business consistent with past practices; or
(up) authorize, commit or agree to take any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentence.
Appears in 2 contracts
Samples: Merger Agreement (Rightnow Technologies Inc), Merger Agreement (Rightnow Technologies Inc)
Conduct of the Company. The From the date hereof until the Effective Time, the Company covenants and agrees thatits Subsidiaries shall conduct their business in the ordinary course consistent with past practice and shall use their reasonable best efforts to preserve intact their business organizations and relationships with third parties. Without limiting the generality of the foregoing, except for matters (i) expressly permitted or expressly contemplated by this Agreement, (ii) set forth on Part 6.01 of the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken with the prior written consent of Parent Acquiror or as contemplated by this Agreement, and, in the case of clauses (which shall not be unreasonably withheld, conditioned or delayedg), (vi), (j) required by Applicable Law or and (l) below, except in the rules and regulations ordinary course of Nasdaqbusiness not representing a new strategic direction of the Company, from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereof, the Company (A) shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) conduct its business in the ordinary course in all material respects, substantially consistent with past practice, (2) to the extent consistent with the foregoing clause (1), maintain its business as a going concern and (3) keep available the services of its current officers and key employees and to preserve the goodwill of and maintain satisfactory relationships with those Persons having material business relationships with the Company and its Subsidiaries, and (B) shall not, and shall cause each of its Subsidiaries not toTime:
(a) amend the Company’s Company will not, and will not permit any of its Significant Subsidiaries to, adopt or propose any change in its certificate of incorporation or bylaws, or amend any certificate of incorporation or bylaws, or other comparable charter or organizational documents, of the Company’s Subsidiariesby-laws;
(b) other than with respect to a direct or indirect wholly owned Subsidiary of the Company, (i) establish a record date for, declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock, property or otherwise) in respect of, or enter into any agreement with respect to the voting of, any capital stock of the Company or will not, and will not permit any of its Subsidiaries (or securities convertible or exchangeable therefor), (ii) split, reverse split, combine, subdivide or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) of the Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c), issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), or (iv) purchase, redeem or otherwise acquire or offer to purchase, redeem or acquire any Company Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPP;
(c) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company Securities, other than (i) the issuance of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement or (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Significant Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company;
(d) mergeto, consolidate or, other than in the ordinary course of business substantially consistent with past practice, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, of complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other material reorganization of the Company or any of its Significant Subsidiaries (other than a merger or consolidation between its wholly-owned Subsidiaries);
(ec) the Company will not, and will not permit any material Subsidiary of the Company to, issue, sell, transfer, pledge, dispose of or encumber any shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any class or series of the Company or its material Subsidiaries other than (i) increase the salary, wages, benefits, bonuses or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made issuances pursuant to the terms exercise of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of convertible securities outstanding on the date hereof or Collective Bargaining Agreement issuances pursuant to stock based awards or under Applicable Law, options that are outstanding on the date hereof and are reflected in Section 3.05 or are granted in accordance with clause (Cii) made in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, below and (ii) other than as required by additional options or stock-based awards to acquire Shares granted under the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Stock Option Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if as in effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets hereof in the ordinary course of business and in amounts substantially consistent with past practice;
(d) the Company will not, and will not permit any material Subsidiary of the Company to, (i) sellsplit, assigncombine, leasesubdivide or reclassify its outstanding shares of capital stock, licenseor (ii) declare, pledgeset aside or pay any dividend or other distribution payable in cash, transfer, abandonstock or property with respect to its capital stock other than, subject to any LienSection 7.09, permit to lapse (x) regular quarterly cash dividends payable by the Company or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregate, except in the ordinary course of the Company’s or its Subsidiaries’ business substantially such material Subsidiary consistent with past practice (including periodic dividend increases consistent with past practice;
), but which for the sake of clarity shall not include any special dividend, (jy) agree any required dividends on the Series B Preferred Stock or (z) dividends paid by any Subsidiary of the Company to any exclusivity, non-competition or similar provision or covenant limiting the ability of the Company or any of its Subsidiaries to compete or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company);
(e) the Company will not, and will not permit any Subsidiary of the Company to, redeem, purchase or otherwise acquire directly or indirectly any of the Company's capital stock, except for repurchases, redemptions or acquisitions (x) required by the terms of its capital stock or any securities outstanding on the date hereof, (ivy) make required by or in connection with the respective terms, as of the date hereof, of any loan, advance Company Stock Option Plan or capital contribution to any Person dividend reinvestment plan as in excess of $500,000 in effect on the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit date hereof in the ordinary course of business, (v) amend, modify or waive any provision the operations of such plan consistent with past practice and only to the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), extent consistent with Section 7.04 or (viz) other than effected in the regularly scheduled ordinary course consistent with past practice and required amortization payments under only to the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreementextent consistent with Section 7.04;
(mf) makethe Company will not amend the terms (including the terms relating to accelerating the vesting or lapse of repurchase rights or obligations) of any outstanding options to purchase Shares (which, change or revoke any material Tax electionit is understood, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return will not limit the administration of the relevant plans in a manner inconsistent accordance with past practice, enter into any “closing agreement” within the meaning of Section 7121 practices and interpretations of the Code Company's Board and the MCOC (as defined in Section 6.06(e)) to the extent consistent with Section 7.04) or similar provision amend the terms of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of terminate the limitations period applicable to any material Tax claim or assessment outside the ordinary course of businessLeveraged ESOP;
(ng) make the Company will not, and will not permit any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) Subsidiary of the Company Disclosure Scheduleto, make or commit to make any capital expenditure;
(o) institute, settle or agree to settle any Proceedings, other than (ih) the settlement of claimsCompany will not, liabilities or obligations (A) reserved against on the most recent balance sheet and will not permit any Subsidiary of the Company included in to, increase the Company SEC Documents compensation or (B) involving payments benefits of less than $500,000 individually any director, officer or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than employee, except for normal increases in the ordinary course of business consistent with past practice or as contemplated by this Agreement required under applicable law or any existing agreement or commitment;
(i) amend, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an Affiliate of the Company;
(s) voluntarily terminate, amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffswill not, in each case that could implicate the WARN Act; or
(u) authorize, commit or agree to take any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, and will not permit any of its subsidiariesSubsidiaries to, or any acquire a material amount of assets (as measured with respect to the Governmental Permits, within the meaning consolidated assets of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to taken as a whole) of any other Person;
(xj) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company will not, and will not permit any of its Subsidiaries to, sell, lease, license or otherwise dispose of any material assets or property except pursuant to existing contracts or commitments;
(k) except for any such change which is not significant or which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any Subsidiary of the Company to, change any method of accounting or accounting practice (including other than any COVID-19 Measureschange for tax purposes) or used by it;
(yl) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shallwill not, and will not permit any Subsidiary of the Company to, enter into any material joint venture, partnership or other similar arrangement;
(m) the Company will not, and will not permit any of its Subsidiaries to, take any action that would make any representation or warranty of the Company hereunder inaccurate in any material respect at, or as of any time prior to, the Effective Time; and
(n) the Company will not, and will not permit any of its Subsidiaries to, agree or commit to do any of the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentenceforegoing.
Appears in 2 contracts
Samples: Merger Agreement (Mobil Corp), Merger Agreement (Exxon Corp)
Conduct of the Company. The Company covenants and agrees thatFrom the date hereof until the Effective Time, except for matters (i) expressly permitted or as expressly contemplated by this Agreement, (ii) as set forth on Part in Section 6.01 of the Company Disclosure Schedule, as consented to in writing by Parent, as contemplated by or reasonably necessary to implement the Company Operating Plan (or, with respect to any initiative therein, reallocations among line items within such initiative that are not in the aggregate more burdensome to the Company in any material respect) or as required by Applicable Law, the Company shall, and shall cause each of its Subsidiaries to, conduct its business in all material respects in the ordinary course consistent with past practice and use its commercially reasonable efforts to (i) preserve intact its business organization, (ii) maintain in effect all of its material foreign, federal, state and local licenses, permits, consents, franchises, approvals and authorizations, and (iii) reasonably undertaken maintain its existing relationships with its material customers, lenders, suppliers and others having material business relationships with it and with Governmental Authorities with jurisdiction over the Company’s operations. Without limiting the generality of the foregoing, from the date hereof until the Effective Time, except as expressly contemplated by this Agreement, as set forth in connection with any COVID-19 MeasuresSection 6.01 of the Company Disclosure Schedule, as consented to in writing by Parent (solely in the case of the following clauses (d), (ive), (f), (g), (h), (i), (j) undertaken with the prior written and (p), such consent of Parent (which shall not to be unreasonably withheld, conditioned or delayed), as contemplated by or reasonably necessary to implement the Company Operating Plan (vor, with respect to any initiative therein, reallocations among line items within such initiative that are not in the aggregate more burdensome to the Company in any material respect) or as required by Applicable Law or the rules and regulations of Nasdaq, from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereofLaw, the Company (A) shallshall not, and nor shall cause each it permit any of its Subsidiaries to use commercially reasonable efforts to (1) conduct its business in the ordinary course in all material respects, substantially consistent with past practice, (2) to the extent consistent with the foregoing clause (1), maintain its business as a going concern and (3) keep available the services of its current officers and key employees and to preserve the goodwill of and maintain satisfactory relationships with those Persons having material business relationships with the Company and its Subsidiaries, and (B) shall not, and shall cause each of its Subsidiaries not to:
(a) amend the Company’s its certificate of incorporation or bylawsincorporation, or amend any certificate of incorporation or bylaws, bylaws or other comparable charter similar organizational documents (whether by merger, consolidation or organizational documents, of the Company’s Subsidiariesotherwise);
(b) other than with respect to a direct or indirect wholly owned Subsidiary of the Company, (i) establish a record date for, declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock, property or otherwise) in respect of, or enter into any agreement with respect to the voting of, any capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), (ii) split, reverse split, combine, subdivide combine or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) of the Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c), issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries or declare, set aside or pay any dividend or other distribution (whether in cash, stock or securities convertible property or exchangeable therefor)any combination thereof) in respect of the capital stock of the Company or its Subsidiaries, or (iv) purchaseredeem, redeem repurchase or otherwise acquire or offer to purchaseredeem, redeem repurchase, or otherwise acquire any Company Securities or any Company Subsidiary Securities, except for (i) dividends by any of its wholly owned Subsidiaries, (ii) regular quarterly cash dividends with customary record and payment dates on the net settlement shares of the Company Equity Awards or acquisitions Stock not in excess of $0.75 per share per quarter, as such amount may be increased for 2015 in the ordinary course of business consistent with past practice, (iii) repurchases of shares of Company Common Stock by in the ordinary course of business consistent with past practices (including as to volume) at then prevailing market prices pursuant to the Company’s share repurchase program as in effect from time to time and (iv) acquisitions, or deemed acquisitions, of Company Stock in connection with (A) the payment of the exercise price of Company Stock Options with Company Stock (including in connection with “net exercises”) and (B) required Tax withholding in connection with the exercise of Company Stock Options and the vesting or settlement of Company RSUs, in each case, to the extent such Company Stock Options and Company RSUs are outstanding on the date of this Agreement (and in satisfaction such case, in accordance with their terms on the date of this Agreement) or are issued or granted after the date of this Agreement as permitted by holders Section 6.01(c)(i)(B);
(c) (i) issue, deliver or sell, or authorize the issuance, delivery or sale of, any shares of any Company Securities or Company Subsidiary Securities, other than (A) the issuance of any shares of the Company Stock upon the exercise of Company Equity Awards Stock Options that are outstanding on the date of the applicable withholding taxes or this Agreement in accordance with the terms of the ESPP;
(c) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company Securities, other than (i) the issuance of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect those options on the date of this Agreement or that are issued after the date of this Agreement as permitted by the following clause (B) grants or awards and (B) the grant of Company Securities or RSUs as long as the aggregate value of all such Company Equity Awards required to be made pursuant to RSUs does not exceed the terms of existing employment or other compensation agreements or arrangements in effect as amount set forth on Section 6.01(c) of the date hereof; Company Disclosure Schedule, and provided that such grants or awards are pursuant to a form of award agreement that has been shall be made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP on terms and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary of conditions used by the Company with respect to the Company or another wholly owned Subsidiary of the Company;
(d) merge, consolidate or, other than RSUs in the ordinary course of business substantially consistent with past practice and such other terms and conditions as set forth on Section 6.01(c) of the Company Disclosure Schedule or (ii) amend any term of any the Company Security or any Company Subsidiary Security (in each case, whether by merger, consolidation or otherwise);
(d) incur any capital expenditures or any obligations or liabilities in respect thereof, except for (i) those as may be contemplated by the plan described in Section 6.01(d) of the Company Disclosure Schedule and (ii) any other capital expenditures not to exceed $150,000,000 in the aggregate in any twelve-month period;
(e) acquire (by merger, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, any assets, securities, properties, interests or businesses, other than (i) supplies and materials in the ordinary course of business of the Company and its Subsidiaries in a manner that is consistent with past practice, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries;
(eii) (i) increase the salary, wages, benefits, bonuses or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms of existing employment or other compensation agreements contracts or arrangements in effect as of on the date hereof, (Biii) required leases or subleases under any which the Company Employee Plan pursuant to or one of its Subsidiaries is the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made tenant entered into in the ordinary course of business and substantially consistent (iv) acquisitions with past practice, or a purchase price (Dincluding assumed indebtedness) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made does not exceed $100,000,000 in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereofaggregate;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
(i) sell, assign, lease, license, pledge, lease or otherwise transfer, abandonor create or incur any Lien on, subject to any Lien, permit to lapse or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregate, except in the ordinary course of the Company’s or its Subsidiaries’ assets, securities, properties, interests or businesses, other than (i) sales of inventory or obsolete equipment in the ordinary course of business substantially consistent with past practice, (ii) sales of assets, securities, properties, interests or business with a sale price (including any related assumed indebtedness) that does not exceed $100,000,000 in the aggregate, (iii) pursuant to contracts or arrangements in effect on the date hereof, (iv) leases or subleases under which the Company or one of its Subsidiaries is the lessor entered into in the ordinary course of business, or (v) Permitted Liens;
(g) other than in connection with actions permitted by Section 6.01(d) or (e) or as required by existing agreements set forth on Section 4.06(c) of the Company Disclosure Schedule, make any loans, advances or capital contributions to, or investments in, any other Person, other than (i) in the ordinary course of business consistent with past practice, (ii) investments or capital contributions that are made alongside Parent or any of its Affiliates or (iii) loans, advances or capital contributions to, or investments in, wholly owned Subsidiaries of the Company;
(h) create, incur, assume, suffer to exist or otherwise be liable with respect to any indebtedness for borrowed money or guarantees thereof or issue or sell any debt securities, except for (i) indebtedness under the Company Credit Facilities, (ii) up to $2,000,000,000 of indebtedness to refinance on market terms any indebtedness existing on the date hereof that is maturing within twelve months of such refinancing (which amount shall be reduced by any such refinanced indebtedness incurred under the immediately preceding clause (i)), (iii) guarantees by the Company of indebtedness of any wholly owned Company Subsidiary or (iv) any commercial paper issued in the ordinary course of business;
(i) other than in the ordinary course of business, enter into any agreement or arrangement that limits or otherwise restricts in any material respect the Company or any of its Subsidiaries from engaging or competing in any line of business, in any location or with any Person or (ii) enter into any agreement or arrangement that limits or otherwise restricts in any material respect any upstream Affiliates of the Company following consummation of the Merger from engaging or competing in any line of business, in any location or with any Person;
(j) agree other than in the ordinary course of business, (i) amend or modify in any material respect or terminate (excluding terminations upon expiration of the term thereof in accordance with the terms thereof) any Company Material Contract or waive, release or assign any material rights, claims or benefits under any Company Material Contract, (ii) enter into any contract or agreement that would have been a Company Material Contract had it been entered into prior to the date of this Agreement or (iii) enter into any programming service distribution agreement;
(k) without prior consultation with Parent, (i) recognize any material new union, works council or other similar employee representative, except as required by Applicable Law, or (ii) enter into any material Collective Bargaining Agreement, or renew or enter into any material mid-term modification (excluding resolutions of grievances relating to or interpretations of a Collective Bargaining Agreement) of any existing Collective Bargaining Agreement;
(l) grant to any exclusivitydirector or officer (as such terms are used for purposes of Section 16 of the Exchange Act) of the Company any increase in change in control, nonseverance, retention or termination pay (including any obligation to gross-competition up, indemnify or similar provision otherwise reimburse any such individual for any Tax incurred by any such individual, including under Section 409A or covenant limiting 4999 of the ability Code), other than any increase in a severance benefit arising directly from an increase in annual salary or annual cash bonus opportunity (for the avoidance of doubt, not including any supplemental cash bonus opportunity set forth in Section 6.01(m) of the Company Disclosure Schedule) to the extent such increase is permitted by the Agreement;
(m) Except as set forth on Section 6.01(m) of the Company Disclosure Schedule, (i) increase the annual salary of any employee of the Company or any of its Subsidiaries to compete who holds the title of Executive Vice President or engage greater by more than 5% in the aggregate in any line fiscal year, except as required by the terms of business, with any Person existing agreement or in (ii) increase the cash bonus opportunity of any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result employee of so competing or engaging, or which would have any such effect on Parent the Company or any of its Affiliates after Subsidiaries who holds the Effective Timetitle of Executive Vice President or greater;
(n) (i) other than as required by an existing agreement, adopt or amend any cash bonus plan or other variable compensation plan with a performance measurement period of greater than 12 months (excluding any period principally relating to an employee’s obligation to be employed on the payment date), (ii) establish or adopt any Title IV Plan, “excess benefit plan”, deferred compensation plan, severance or change in control plan or employee benefit plan that provides post-retirement health, medical, life insurance or death benefits to retired, current or former employees, directors or consultants of the Company or any of its Subsidiaries except as required to avoid excise tax under Section 4980B of the Code, unless such establishment or adoption occurs as part of an acquisition of any other company or business that is permitted or consented to under this Agreement, (iii) fail to continue to make all contributions required to be made to any Company Plan that is a Title IV Plan (for the avoidance of doubt, other than a Multiemployer Plan) under ERISA, the Code and Applicable Law or (iv) amend the benefit formula under any Company Plan that is a Title IV Plan (for the avoidance of doubt, other than any Multiemployer Plan) to increase the benefit accrual applicable to any participant or beneficiary thereof under such Company Plan;
(o) change the Company’s methods of financial accounting, except as required by concurrent changes in GAAP or in Regulation S-X of the 1934 Act, as agreed to by its independent public accountants;
(p) without limiting Section 8.11, settle, or offer or propose to settle, (A) any litigation, investigation, arbitration, proceeding or other claim involving or against the Company or any of its Subsidiaries or (B) any stockholder litigation or dispute against the Company or any of its officers or directors, except, in each case, where the sum of (x) any amount paid in connection with Contracts entered into with customers, contractors, distributors, resellers, partners settlement or suppliers of compromise plus (y) the financial impact to the Company and its Subsidiaries of any other terms of the settlement or similar arrangements, that compromise does not exceed $100,000,000 (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar after giving effect to any reasonably expected indemnification proceeds);
(q) adopt or publicly propose a plan of complete or partial liquidation or resolutions providing for or authorizing such restrictions existing on a liquidation or a dissolution, in each case, of the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent Company or any Significant Subsidiary of its Affiliates the Company;
(other than r) knowingly and intentionally take any action that would reasonably be expected to make any representation or warranty of the Company and its Subsidiaries) after hereunder inaccurate in any material respect at, or immediately prior to, the Effective Time;
(ks) adopt or change any of take the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect to capital expenditures in excess of the amounts action set forth in Part 6.01(n)(i) on Section 6.01 of the Company Disclosure Schedule;
Schedule (o) institute, settle or agree to settle any Proceedings, other than (i) it being understood and agreed that the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included exceptions contained in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 lead-in the aggregateto this Section 6.01 shall not apply with respect to this Section 6.01(s)); provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than in the ordinary course of business or as contemplated by this Agreement (i) amend, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an Affiliate of the Company;
(s) voluntarily terminate, amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;or
(t) conduct any reduction-in-force of employees agree, resolve or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Act; or
(u) authorize, commit or agree to take do any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentenceforegoing.
Appears in 2 contracts
Samples: Merger Agreement, Merger Agreement (Time Warner Cable Inc.)
Conduct of the Company. The Company covenants and agrees that, except for matters (i) expressly permitted or expressly contemplated by this Agreement, (ii) Except as set forth on Part in Section 6.01 of the Company Disclosure ScheduleSchedule or from the date hereof until the Effective Time, (iii) reasonably undertaken the Company shall, and shall cause each of its Subsidiaries to, conduct its business in connection the ordinary course, including, without limitation, maintaining in good standing all liquor licenses and making timely payments to licensed alcohol wholesale distributors in the ordinary course of business, and use its reasonable best efforts to preserve intact its business organizations and relationships with any COVID-19 Measuresthird parties and to keep available the services of its present officers and employees. Without limiting the generality of the foregoing, (iv) undertaken except with the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned withheld or delayed), (v) required or as expressly contemplated by Applicable Law this Agreement or the rules and regulations of Nasdaq, from the date hereof until the earlier set forth in Section 6.01 of the Effective Time and the termination of this Agreement in accordance with Article 8 hereofCompany Disclosure Schedule, the Company (A) shallshall not, and nor shall cause each it permit any of its Subsidiaries to use commercially reasonable efforts to (1) conduct its business in the ordinary course in all material respects, substantially consistent with past practice, (2) to the extent consistent with the foregoing clause (1), maintain its business as a going concern and (3) keep available the services of its current officers and key employees and to preserve the goodwill of and maintain satisfactory relationships with those Persons having material business relationships with the Company and its Subsidiaries, and (B) shall not, and shall cause each of its Subsidiaries not to:
(a) amend the Company’s certificate its articles of incorporation or bylawsincorporation, or amend any certificate of incorporation or bylaws, bylaws or other comparable charter or similar organizational documents, of the Company’s Subsidiaries;
(b) other than with respect to a direct or indirect wholly owned Subsidiary of the Company, (i) establish a record date forsplit, combine or reclassify any shares of its capital stock, (ii) declare, set aside or pay any dividends on, dividend or make any other distributions distribution (whether in cash, stock, stock or property or otherwiseany combination thereof) in respect ofof its capital stock, or enter into any agreement with respect to the voting of, any capital stock of the Company or except for dividends by any of its wholly-owned Subsidiaries (or securities convertible or exchangeable therefor), (ii) split, reverse split, combine, subdivide or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) of the Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c)redeem, issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), or (iv) purchase, redeem repurchase or otherwise acquire or offer to purchaseredeem, redeem repurchase, or otherwise acquire any Company Securities or any Company Subsidiary Securities;
(c) (i) issue, except for grant, deliver or sell, or authorize the net settlement issuance, grant, delivery or sale of, any shares of any Company Securities or Company Subsidiary Securities or any Voting Debt, other than the issuance of (A) any shares of the Company Stock upon the exercise of Company Equity Awards or acquisitions Stock Options that are outstanding on the date of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or this Agreement in accordance with the terms of the ESPP;
(c) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber or dispose of any equity interests of the those Company or incur any obligation to make any payments to any Person based on the price or value of any Company Securities, other than (i) the issuance of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement or (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company;
(d) merge, consolidate or, other than in the ordinary course of business substantially consistent with past practice, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries;
(e) (i) increase the salary, wages, benefits, bonuses or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
(i) sell, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregate, except in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice;
(j) agree to any exclusivity, non-competition or similar provision or covenant limiting the ability of the Company or any of its Subsidiaries to compete or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing Options on the date of this Agreement and (zB) would not have any Company Subsidiary Securities to the Company or any other Subsidiary of the Company or (ii) amend any term of any Company Security or any Company Subsidiary Security;
(d) Merge or consolidate with any Person, except for any such effect (or otherwise restrict or bind) transactions solely among wholly owned Subsidiaries of the Company not in violation of any instrument binding on Parent the Company or any of its Affiliates (other than Subsidiaries that would not reasonably be expected to result in a material increase in the net Tax liability of the Company and its Subsidiaries) after the Effective Time, taken as a whole;
(ke) adopt acquire (by merger, consolidation, acquisition of stock or change assets or otherwise), directly or indirectly, any material amount of the accounting methods used by the Company materially affecting its assets, liabilities securities, properties, interests or businessbusinesses, except for such changes that are required by other than (i) GAAP (pursuant to contracts or any interpretation thereof), commitments existing as of the date hereof or (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business (it being understood and except for intercompany agreed that the acquisition of all or substantially all of the assets of any Person is not in the ordinary course of business);
(f) sell, lease or otherwise transfer any of its material assets, securities, properties, interests or businesses, or create or otherwise incur any Lien (other than a Permitted Lien) on any material asset other than (i) pursuant to existing contracts or commitments or (ii) in the ordinary course of business;
(g) make any material loans, guarantees, advance advances or capital contribution contributions to, or investments in, any other Person, other than (i) in the ordinary course of business up to $5,000,000 in the aggregate or (ii) to or between wholly-owned direct or indirect Subsidiaries of the Company;
(h) establish, adopt, terminate or amend (except as required by Applicable Law) any Company Labor Agreement (or any agreement that would be a Company Labor Agreement had it been entered into prior to this Agreement);
(i) renew, amend or modify, in any material respect, terminate, or otherwise waive or release any material right, claim or benefit in respect of, any Material Contract, Real Property Lease or Property Development Contract, enter into any contract, agreement, arrangement, commitment or understanding that would have been a Material Contract, Real Property Lease or Property Development Contract had it been entered into prior to the execution of this Agreement other than renewals and extensions of Material Contracts in the ordinary course of business;
(j) fail to provide updates to Parent in a reasonably timely manner with respect to any material developments regarding the renewal of any Real Property Lease, or fail to consult with and consider the input of Parent, in good faith, with regard to any such renewal;
(k) incur any Indebtedness or guarantee any such Indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any of its debt securities or of any of its Subsidiaries, other than (i) any Indebtedness incurred in the ordinary course of business consistent with past practices pursuant to the Company Credit Agreement or in respect of swaps or hedging contracts, in an aggregate amount not to exceed $5,000,000 outstanding at any time (in addition to amounts outstanding thereunder as of the date of this Agreement as disclosed to Parent) or (ii) incurred between the Company and any of its wholly-owned Subsidiaries or between any of such wholly-owned Subsidiaries Subsidiaries;
(l) create, incur or suffer to exist any Lien (except for Permitted Liens);
(m) except as required pursuant to the terms of any Company Employee Plan in effect as of the Companydate hereof and set forth in Section 6.01(m) of the Company Disclosure Schedule, or as otherwise required by Applicable Law, (i) incurincrease compensation (including incentive compensation) or benefits (including severance benefits) payable to any director, issue, officer or otherwise become liable for employee of the Company or any additional Indebtedness in excess of $5,000,000 in the aggregateits Subsidiaries, (ii) modify become a party to, establish, adopt, materially amend, commence participation in or terminate any Company Employee Plan or any arrangement that would have been a manner materially adverse Company Employee Plan had it been entered into prior to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assumegrant any new awards, guarantee or endorse amend or modify the obligations terms of any Person (other than a wholly-owned Subsidiary of the Company)outstanding awards, under any Company Employee Plan, (iv) make take any loanaction to accelerate the vesting or lapsing of restrictions or payment, advance or capital contribution to fund or in any Person in excess other way secure the payment, of $500,000 in the aggregate, compensation or benefits under any Company Employee Plan (v) forgive any loans or issue any loans (other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit routine travel advances issued in the ordinary course of business) to any current or former employee, (v) amend, modify officer or waive any provision director of the Existing Credit Agreement (other than to waive Company or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or its Subsidiaries (vi) hire or appoint any director, executive officer or any other individual with annual base salary or base wages in excess of $150,000 or (vii) terminate the employment or service of any director or executive officer, or any other employee of the Company or any of its Subsidiaries whose annual base salary or base wages exceeds $150,000, in each case other than for cause.
(n) change the regularly scheduled and Company’s methods of accounting, except as required amortization payments under by concurrent changes in GAAP or in Regulation S-X of the Existing Credit Agreement1934 Act, repurchase, prepay, terminate or refinance any Indebtedness arising under as agreed to by the Existing Credit AgreementCompany’s independent public accountants;
(mo) except to the extent required by Applicable Law, make, change or revoke rescind any material Tax election, adopt or change any accounting method for Tax purposes that has a material effect on Taxes, change any annual Tax accounting period, agree to any extension or waiver of the statute of limitations relating to a material amount of Taxes, file any material amended Tax Return or file amendment to any material Tax Return in respect of a manner inconsistent with past practicematerial amount of Taxes, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of take any material Tax, settle any material Tax Proceeding, action to surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, settle or consent to any extension or waiver of the limitations period applicable to compromise any material Tax claim claim, audit or assessment outside assessment, or take any position on any material Tax Return filed on or after the ordinary course date of businessthis Agreement that is inconsistent with positions taken in preparing or filing similar Tax Returns in prior periods;
(np) initiate, settle, or offer or propose to settle, (i) any material litigation, investigation, arbitration, proceeding or other claim involving or against the Company or any of its Subsidiaries, (ii) any stockholder litigation or dispute against the Company or any of its officers or directors or (iii) any litigation, arbitration, proceeding or dispute that relates to the transactions contemplated hereby;
(q) make or authorize any commitment with respect to capital expenditures materially in excess of the amounts set forth amount reflected in Part 6.01(n)(ithe Company’s annual capital expenditure budget attached to Section 6.01(q) of the Company Disclosure Schedule;
(or) institutetransfer, settle sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or agree allow to settle lapse or expire or otherwise dispose of any ProceedingsOwned Company IP, other than (i) the settlement of claims, liabilities pursuant to contracts or obligations (A) reserved against on the most recent balance sheet binding commitments existing as of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business date hereof or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than in the ordinary course of business or as contemplated by this Agreement (i) amend, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance and consistent with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an Affiliate of the Companypast practice;
(s) voluntarily terminate, amend or fail to use commercially reasonable efforts to renew or preserve any Company Communications License as set forth on Part 6.01(s) maintain the insurance policies of the Company Disclosure Scheduleand its Subsidiaries or comparable replacement policies;
(t) conduct adopt, enter into or effect any reduction-in-force plan of employees complete or other service providers partial liquidation, dissolution, reorganization or otherwise implement restructuring;
(u) take any layoffsaction or fail to take any action, in each case case, in bad faith, that could implicate is intended to, prevent, materially delay or materially impede the WARN Actability of any party to this Agreement to consummate the Merger or the other transactions contemplated by this Agreement, including the financing thereof; or
(uv) authorizeagree, resolve or commit or agree to take do any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentenceforegoing.
Appears in 2 contracts
Samples: Merger Agreement (Fogo De Chao, Inc.), Merger Agreement (Fogo De Chao, Inc.)
Conduct of the Company. The Company covenants and agrees that, except for matters (i) expressly permitted or expressly contemplated by this Agreement, (ii) set forth on Part 6.01 of the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken with the prior written consent of Parent (which shall not be unreasonably withheld, conditioned or delayed), (v) required by Applicable Law or the rules and regulations of Nasdaq, from From the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereofuntil the Effective Time, the Company (A) shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) to, conduct its business in the ordinary course in all material respects, substantially of business consistent with past practicepractice and in compliance with all material Applicable Laws and all material governmental authorizations, (2) and use its commercially reasonable best efforts to the extent consistent with the foregoing clause (1)preserve intact its present business organization, maintain in effect all of its business as a going concern material foreign, federal, state and (3) local licenses, permits, consents, franchises, approvals and authorizations, keep available the services of its current directors, officers and key employees and to preserve the goodwill of maintain existing relations with its customers, lenders, suppliers and maintain satisfactory relationships with those Persons others having material business relationships with it. Without limiting the generality of the foregoing and to the fullest extent permitted by Applicable Law, from the date of this Agreement until the Effective Time, except as set forth in Section 7.01 of the Company and its SubsidiariesDisclosure Schedule or as contemplated by this Agreement, and or with Parent’s prior written consent (B) not to be unreasonably withheld or delayed), the Company shall not, and shall cause each not permit any of its Subsidiaries not to:
(a) amend the Company’s certificate their respective certificates of incorporation or bylawsincorporation, or amend any certificate of incorporation or bylaws, bylaws or other comparable charter similar organizational documents (whether by merger, consolidation or organizational documents, of the Company’s Subsidiariesotherwise);
(b) other than with respect to a direct or indirect wholly owned Subsidiary of the Company, (i) establish a record date forsplit, combine or reclassify any shares of its capital stock, (ii) declare, set aside or pay any dividends on, dividend or make any other distributions distribution (whether in cash, stock, property or otherwiseany combination thereof) in respect of any shares of its capital stock or other securities (other than dividends or distributions by any of its wholly-owned Subsidiaries), or (iii) redeem, repurchase, cancel or otherwise acquire or offer to redeem, repurchase, or otherwise acquire, any of its securities or any securities of any of its Subsidiaries, other than the cancellation of Company Stock Options or Company Warrants in connection with the exercise thereof;
(c) (i) issue, deliver or sell, or authorize the issuance, delivery or sale of, any shares of any Company Securities or Company Subsidiary Securities, other than the issuance of any shares of Company Common Stock upon the exercise of Company Stock Options or Company Warrants, or (ii) amend any term of any Company Security or any Company Subsidiary Security (in each case, whether by merger, consolidation or otherwise);
(d) incur any capital expenditures or any obligations or liabilities in respect thereof, in excess of $25,000 individually or $50,000 in the aggregate;
(i) acquire (including by merger, consolidation, or acquisition of stock or assets) any interest in any corporation, partnership, other business organization or any division thereof outside the ordinary course of business or any material amount of assets from any other Person, (ii) merge or consolidate with any other Person or (iii) adopt a plan of complete or partial liquidation, dissolution, recapitalization or restructuring;
(f) sell, lease, license or otherwise dispose of any material Subsidiary or any material amount of assets, securities or property except in the ordinary course consistent with past practice in an amount not to exceed $25,000 in the aggregate;
(g) create or incur any material Lien on any material asset;
(h) make any loan, advance or investment outside the ordinary course of business either by purchase of stock or securities, contributions to capital, property transfers, or purchase of any property or assets of any Person other than investments or capital contributions to any affiliated or unaffiliated investment partnerships pursuant to the terms of the fund documents for such partnerships as of the date of this Agreement;
(i) create, incur, assume, suffer to exist or otherwise be liable with respect to any Indebtedness, or extend or modify the same outside the ordinary course of business provided that all such indebtedness for borrowed money must be prepayable at any time by the Company without penalty or premium;
(j) enter into capital commitments for investment partnerships or enter into any agreement with respect to the voting of, or otherwise agree to accelerate or increase investments in existing investment partnerships;
(k) (i) enter into any capital stock of Contract that would have been a Company Material Contract were the Company or any of its Subsidiaries (a party or securities convertible or exchangeable therefor), (ii) split, reverse split, combine, subdivide or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) of the Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c), issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), or (iv) purchase, redeem or otherwise acquire or offer to purchase, redeem or acquire any Company Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPP;
(c) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company Securities, other than (i) the issuance of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect thereto on the date of this Agreement other than (except with respect to any Contract that would have been a Company Material Contract pursuant to clause (xiii) of Section 5.14) in the ordinary course of business consistent with past practices or (Bii) grants terminate or awards amend in any material respect any such Contract or any Company Material Contract or waive any material right thereunder;
(l) terminate, renew, suspend, abrogate, amend or modify in any material respect any Company Permit;
(m) (i) grant or increase any severance or termination pay to (or amend any existing arrangement with) any of Company Securities their respective directors, officers or Company Equity Awards employees other than as required to be made pursuant to the terms of existing Employee Plans, (ii) increase benefits payable under any severance or termination pay policies or employment or other compensation agreements or arrangements in effect existing as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or Agreement, (iii) enter into any employment, deferred compensation or other similar agreement (or any amendment to any such existing agreement) with any of their respective directors or officers, (iv) establish, adopt or amend (except as required by Applicable Law) any collective bargaining, bonus, profit-sharing, thrift, pension, retirement, deferred compensation, severance, compensation, stock option, restricted stock or other benefit plan or arrangement covering any of their respective directors, officers or employees or (v) increase the issuance compensation, bonus or other benefits payable to any of equity interests of a wholly owned Subsidiary of the Company to the Company their respective directors, officers or another wholly owned Subsidiary of the Company;
(d) merge, consolidate oremployees, other than in the ordinary course of business substantially consistent with past practice, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries;
(e) (i) increase the salary, wages, benefits, bonuses or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
(in) sell, assign, lease, license, pledge, transfer, abandon, subject to make any Lien, permit to lapse change in any method of accounting or otherwise dispose of any assets, properties, accounting principles or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregatepractice, except in for any such change required by GAAP or Regulation S-X under the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice1934 Act;
(jo) agree settle, or offer or propose to settle any exclusivitylitigation, non-competition investigation, arbitration, proceeding or similar provision other claim involving or covenant limiting the ability of against the Company or any of its Subsidiaries to compete or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as involving a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used payment by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;
(o) institute, settle or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub25,000;
(p) enter into take any action that would make any representation or warranty of the Company hereunder inaccurate in any material new line respect at, or as of businessany time before, the Effective Time or would materially delay the Closing;
(q) fail to use reasonable efforts to maintain in all existing material respects any Insurance Policiesinsurance policies or comparable replacement policies;
(r) other than in the ordinary course change, terminate or fail to exercise any right to renew any material lease or sublease of business real property listed or as contemplated by this Agreement (i) amend, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence required to be listed on the date of this Agreement, Company Disclosure Schedule pursuant to Section 5.14(a)(ix); or (ii) renew or enter into any Contract with an Affiliate of the Company;
(s) voluntarily terminateagree, amend resolve or fail commit to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Act; or
(u) authorize, commit or agree to take do any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentenceforegoing.
Appears in 2 contracts
Samples: Agreement and Plan of Merger (Hudson Holding Corp), Merger Agreement (Hudson Holding Corp)
Conduct of the Company. The Company covenants and agrees that, from the date hereof until the Effective Time, except as expressly provided otherwise in this Agreement (or except as disclosed in writing to Parent prior to the date hereof), or as reasonably necessary for matters (i) expressly permitted or expressly contemplated by this Agreementthe Company to fulfill its obligations hereunder, (ii) set forth on Part 6.01 the Company and its subsidiaries shall conduct their business in the ordinary course consistent with past practices and shall use their reasonable best efforts to preserve intact their business organizations and relationships with third parties and to keep available the services of their present officers and employees. Without limiting the generality of the Company Disclosure Scheduleforegoing, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken with the prior written consent of Parent (which shall not be unreasonably withheld, conditioned or delayed), (v) required by Applicable Law or the rules and regulations of Nasdaqexcept as otherwise contemplated hereby, from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereof, the Company (A) shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) conduct its business in the ordinary course in all material respects, substantially consistent with past practice, (2) to the extent consistent with the foregoing clause (1), maintain its business as a going concern and (3) keep available the services of its current officers and key employees and to preserve the goodwill of and maintain satisfactory relationships with those Persons having material business relationships with the Company and its Subsidiaries, and (B) shall not, and shall cause each of its Subsidiaries not toTime:
(a) amend the Company’s Company will not adopt or propose any change in its certificate of incorporation or any material change in its bylaws, or amend any certificate of incorporation or bylaws, or other comparable charter or organizational documents, of the Company’s Subsidiaries;
(b) other than with respect to a direct or indirect wholly owned Subsidiary of the Company, (i) establish a record date for, declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock, property or otherwise) in respect of, or enter into any agreement with respect to the voting of, any capital stock of the Company or will not, and will not permit any of its Subsidiaries (or securities convertible or exchangeable therefor)subsidiaries to, (ii) split, reverse split, combine, subdivide or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) of the Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c), issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), or (iv) purchase, redeem or otherwise acquire or offer to purchase, redeem or acquire any Company Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPP;
(c) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company Securities, other than (i) the issuance of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement or (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company;
(d) merge, consolidate or, other than in the ordinary course of business substantially consistent with past practice, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, of complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other material reorganization of the Company or any of its Subsidiariessubsidiaries (other than a liquidation or dissolution of any such subsidiary, a merger or consolidation between wholly-owned subsidiaries of the Company or of any such wholly-owned subsidiary into the Company);
(ec) the Company will not, and will not permit any of its subsidiaries to, make any equity investment in or acquisition of any business of any person or any material amount of assets, except (i) increase the salaryfor any capital expenditure permitted by Section 6.01(h), wages, benefits, bonuses or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except (ii) for increases (A) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements equity investment in effect as any wholly-owned subsidiary of the date hereof, Company or (Biii) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business consistent with past practices;
(d) the Company will not, and substantially will not permit any of its subsidiaries to, sell, lease, license or otherwise dispose of any assets in an amount that would be material to the Company and its subsidiaries, taken as a whole, except (i) pursuant to existing contracts or commitments or (ii) in the ordinary course of business consistent with past practices;
(e) the Company will not, and will not permit any of its subsidiaries to, declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock other than (i) dividends or other distributions paid by any of its subsidiaries to the Company or any other subsidiary of the Company and (ii) dividends payable in accordance with the terms of the Preferred Shares;
(f) the Company will not, and will not permit any of its subsidiaries to, issue, sell, transfer, pledge or dispose of any shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any class or series of the Company or its subsidiaries, other than (i) issuances pursuant to the exercise of options under the Option Plans described in Section 4.05, outstanding on the date hereof, (ii) issuances pursuant to the conversion of the Preferred Shares and the Convertible Notes outstanding on the date hereof and (iii) issuances by any of its subsidiaries to the Company or any other subsidiary of the Company;
(g) the Company will not, and will not permit any of its subsidiaries to, redeem, purchase or otherwise acquire directly or indirectly any of the Company's capital stock;
(h) the Company will not, and will not permit any of its subsidiaries to, make or commit to make any capital expenditure, except in the ordinary course of business or pursuant to the 1999 budget made available to Parent;
(i) the Company will not, and will not permit any of its subsidiaries to, (i) incur or assume any long-term or short-term debt or issue any debt securities, except for borrowings under existing lines of credit in the ordinary course of business consistent with past practice; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person, except in the ordinary course of business consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required by the terms except for obligations of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding wholly owned subsidiaries of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company; (iii) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
(i) sell, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse or otherwise dispose of any assets, propertiescontributions to, or Company Intellectual Propertyinvestment in, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregateany other person, except in the ordinary course of business consistent with past practice and except to wholly owned subsidiaries of the Company or to the Company’s ; (iv) pledge or otherwise encumber shares of capital stock of the Company or its Subsidiaries’ subsidiaries; or (v) mortgage or pledge any of its material assets, tangible or intangible, or create any material Lien thereupon, except in the ordinary course of business substantially consistent with past practice;
(j) agree to any exclusivityexcept as may be required by law or as contemplated by this Agreement or as required by existing agreements or arrangements, non-competition or similar provision or covenant limiting the ability of the Company or will not, and will not permit any of its Subsidiaries to compete or engage subsidiaries to, increase in any line manner the compensation or benefits under the Benefit Plans of businessany director, with any Person officer or in any geographic area, employee or pursuant to which pay any benefit not required by any plan and arrangement as in effect as of the date hereof (including, without limitation, the granting of stock appreciation rights or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, exceptperformance units), in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made case other than in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change the Company will not, and will not permit any of its subsidiaries to, enter into any material contract, agreement, commitment or transaction, other than in the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization)ordinary course of business consistent with past practice;
(l) except for borrowings as may be required as a result of revolving loans under the Existing Credit Agreement and capital leases a change in the ordinary course of business and except for intercompany loanslaw or in GAAP, guarantees, advance or capital contribution between the Company will not, and will not permit any of its wholly-owned Subsidiaries or between subsidiaries to, change materially any wholly-owned Subsidiaries of the Company, (i) incur, issue, accounting principles or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreementpractices used by it;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;
(o) institutewill not, settle or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor and will not permit any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into subsidiaries to, revalue any material new line assets (including, without limitation, writing down the value of business;
(q) fail to maintain in all material respects any Insurance Policies;
(rinventory or writing-off notes or accounts receivable) other than in the ordinary course of business consistent with past practice or as contemplated required by this Agreement GAAP;
(in) amendthe Company will not, modifyand will not permit any of its subsidiaries to, renew make or terminaterevoke any tax election, or grant settle or compromise any release tax liability, or waiver underchange (or make a request to any taxing authority to change) any material aspect of its method of accounting for tax purposes, in each case other than in the ordinary course of business consistent with past practice;
(o) the Company will not, and will not permit any of its subsidiaries to, pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than in the ordinary and usual course of business consistent with past practice or waive the benefits of, or agree to modify in any manner, any Material Contract confidentiality, standstill or similar agreement to which the Company or any of its subsidiaries is a party;
(excluding p) the expiration Company will not, and will not permit any of its subsidiaries to, settle or compromise any Material Contract in accordance with pending or threatened suit, action or claim relating to the transactions contemplated hereby;
(q) the Company will not, and will not permit any of its terms) or subsidiaries to, enter into any new Contract agreement that would have been a Material Contract if limits or otherwise restricts the Company or any of its subsidiaries or any successor thereto or that could, after the Effective Time, limit or restrict the Surviving Corporation and its affiliates (including Parent) or any successor thereto, from engaging or competing in existence on any line of business or in any geographic area;
(r) the date Company will not, and will not permit any of this Agreementits subsidiaries to, agree or (ii) renew or enter into commit to do any Contract with an Affiliate of the Company;foregoing; and
(s) voluntarily terminatethe Company will not, amend or fail and will not permit any of its subsidiaries to renew or preserve take any Company Communications License as set forth on Part 6.01(s) action that would make any representation and warranty of the Company Disclosure Schedule;
(t) conduct hereunder inaccurate in any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Act; or
(u) authorize, commit or agree to take any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiariesmaterial respect at, or as of any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In additiontime prior to, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentenceEffective Time.
Appears in 2 contracts
Samples: Agreement and Plan of Merger (Whittaker Corp), Merger Agreement (Meggit PLC)
Conduct of the Company. The Company covenants and agrees that, except for matters (i) expressly permitted or expressly Except as contemplated by this AgreementAgreement or as expressly agreed to in writing by Buyer, (ii) set forth on Part 6.01 of during the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken with the prior written consent of Parent (which shall not be unreasonably withheld, conditioned or delayed), (v) required by Applicable Law or the rules and regulations of Nasdaq, period from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereofto the Closing Date, Parent shall cause the Company (A) shall, and shall cause each Company Subsidiary to conduct its operations according to its ordinary and usual course of its Subsidiaries to business and consistent with past practice and use all commercially reasonable efforts to (1) conduct preserve intact its current business in the ordinary course in all material respectsorganizations, substantially consistent with past practice, (2) to the extent consistent with the foregoing clause (1), maintain its business as a going concern and (3) keep available the services of its current officers and key employees and to preserve the goodwill of and maintain satisfactory its relationships with those Persons customers, suppliers, licensors, licensees, advertisers, distributors and others having material business relationships dealings with it and preserve goodwill. Without limiting the generality of the foregoing, and except as (x) otherwise expressly provided in this Agreement or (y) required by law, prior to the Closing Date, Parent shall cause the Company and its Subsidiaries, and (B) shall not, and shall cause each of its the Company Subsidiaries not to, without the consent of Buyer:
(a) amend expend funds for capital expenditures that in the Company’s certificate of incorporation or bylawsaggregate would cause total capital expenditures for the period from January 1, or amend any certificate of incorporation or bylaws, or other comparable charter or organizational documents, 2002 to the Closing Date to exceed 110% of the Company’s Subsidiariesamounts set forth in the most recent version of the business plan previously provided to Buyer;
(b) other than with respect to a direct sell, lease, license or indirect wholly owned otherwise dispose of any Material Subsidiary or any material amount of assets, securities or property of the CompanyCompany and the Company Subsidiaries, taken as a whole, except pursuant to existing contracts or commitments or otherwise in the ordinary course consistent with past practice, it being understood that title to the tangible personal property formerly used in the Commonwealth Business shall be retained by Parent or one of its Subsidiaries;
(ic) establish a record date foramend its certificate of incorporation, declareby-laws or equivalent organizational documents or alter through merger, set aside liquidation, reorganization, restructuring or pay any dividends on, or make in any other distributions (whether in cash, stock, property fashion the corporate structure or otherwise) in respect of, or enter into ownership of any agreement with respect to the voting of, any capital stock Material Subsidiary of the Company or split, combine or reclassify any of its Subsidiaries (or securities convertible or exchangeable therefor), (ii) split, reverse split, combine, subdivide or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) of the Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c), issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, for shares of its capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), or (iv) purchase, redeem or otherwise acquire or offer to purchase, redeem or acquire any Company Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPPstock;
(c) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company Securities, other than (i) the issuance of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement or (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company;
(d) merge, consolidate or, other than in the ordinary course of business substantially consistent with past practice, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries;
(e) (i) increase the salary, wages, benefits, bonuses or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
(i) sell, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregate, except in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice;
(j) agree to any exclusivity, non-competition or similar provision or covenant limiting the ability of the Company or any of its Subsidiaries to compete or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;
(o) institute, settle or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than in the ordinary course of business or as contemplated by this Agreement (i) amend, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an Affiliate of the Company;
(s) voluntarily terminate, amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Act; or
(u) authorize, commit or agree to take any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentence.
Appears in 2 contracts
Samples: Stock Purchase Agreement (Trimas Corp), Stock Purchase Agreement (Metaldyne Corp)
Conduct of the Company. The Company covenants and agrees that, except for matters (i) expressly permitted or expressly Except as contemplated by this Agreement, (ii) set forth on Part 6.01 of the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken with the prior written consent of Parent (which shall not be unreasonably withheld, conditioned or delayed), (v) required by Applicable Law or the rules and regulations of Nasdaq, from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereofTime, the Company (A) shall, shall and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) conduct its their business in the ordinary course in all material respects, substantially of business and consistent with past practicepractice and shall use all commercially reasonable efforts to preserve intact their current business organizations and relationships with customers, (2) suppliers, licensors, licensees, distributors and others having business dealings with them and to the extent consistent with the foregoing clause (1), maintain its business as a going concern and (3) keep available the services of its current their present officers and key employees and to preserve goodwill. Without limiting the goodwill generality of the foregoing and maintain satisfactory relationships except as (x) otherwise expressly provided in this Agreement or (y) required by law, from the date hereof until the Effective Time, without the consent of Parent (which consent shall not be unreasonably withheld):
(a) the Company will not and will not permit its Subsidiaries to adopt or propose any change to its Articles of Incorporation or Bylaws or analogous organizational documents or alter through merger, liquidation, reorganization or in any other fashion the corporate structure or ownership of the Company or any of its Material Subsidiaries;
(b) the Company will not, and will not permit any of its Subsidiaries to, merge or consolidate with those Persons having any other Person or acquire a material business relationships amount of stock or assets of any other Person other than (i) purchases of materials or products in the ordinary course consistent with past practice and (ii) pursuant to purchase orders in the ordinary course consistent with past practice;
(c) the Company will not, and will not permit any of its Subsidiaries to, sell, lease, license or otherwise dispose of any Subsidiary or material amount of assets, securities or property of the Company and its Subsidiaries, taken as a whole, except pursuant to existing contracts, commitments or arrangements or otherwise in the ordinary course consistent with past practice; and
(d) the Company will not and (B) shall not, and shall cause each will not permit any of its Subsidiaries not to:to (i) expend funds for capital expenditures that in the aggregate would cause total capital expenditures for the period from January 1, 2000 to the Effective Time to exceed 110% of the amounts set forth in the most recent version of the business plan previously provided to Merger Sub in the Confidential Memorandum dated May 2000, (ii) enter into any new material line of business, or (iii) amend, modify or terminate any material contracts or waive, realease or assign any rights or claims thereunder except in the ordinary course of business and consistent with past practice.
(ae) amend except for issuances of Shares upon exercise of presently outstanding options, the Company’s certificate Company will not and will not permit any of incorporation its Subsidiaries to authorize for issuance, issue, deliver, sell or bylawsagree or commit to issue, sell or deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, any other voting securities or any securities convertible into, or amend any certificate of incorporation rights, warrants or bylawsoptions to acquire, any such shares, voting securities or convertible securities or any other comparable charter securities or organizational documentsequity equivalents (including, of the Company’s Subsidiarieswithout limitation, stock appreciation rights);
(bf) the Company will not and will not permit any of its Subsidiaries to (i) declare, set aside, make or pay any dividend or other than with distribution (whether in cash, stock or property or any combination thereof) in respect of any of its capital stock, except that (x) the Company may pay quarterly cash dividends on the Shares in and after the first quarter of 2001 not in excess of $.10 per share per quarter and having customary record and payment dates and (y) a wholly-owned Subsidiary of the Company may declare and pay a dividend, or make advances, to a direct the Company or indirect wholly another wholly-owned Subsidiary of the Company, (i) establish a record date for, declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock, property or otherwise) in respect of, or enter into any agreement with respect to the voting of, any capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), (ii) split, reverse split, combine, subdivide combine or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) of the Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c), capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for, for shares of its capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor)stock, or (iviii) purchase, redeem or otherwise acquire or offer to purchase, redeem or acquire any Company Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock as required by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPP;
(c) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company Securities, other than (i) the issuance of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards security as in effect on the date of this Agreement or (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to hereof amend the terms or change the period of existing employment exercisability of, purchase, repurchase, redeem or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary otherwise acquire any of the Company's securities, including Shares, or any option, warrant or right, directly or indirectly, to acquire any such securities;
(dg) mergethe Company will not and will not permit its Subsidiaries to (i) incur any additional indebtedness for borrowed money, consolidate or, other than except for borrowings and reborrowings in the ordinary course of business substantially consistent with past practicepractice not to exceed $30 million in the aggregate at any one time outstanding under the Company's existing credit facilities (as in effect on the date hereof) and intercompany indebtedness, enter into strategic alliance (ii) issue or similar legal partnership with sell any Person, file a voluntary petition for bankruptcy debt securities (except intercompany debt securities) or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization warrants or other reorganization rights to acquire any debt securities of the Company or any of its Subsidiaries;
, (eiii) make any loans, advances (i) increase the salary, wages, benefits, bonuses or other cash compensation payable or than to become payable employees of and consultants to the Company’s employees, officers, directors or Independent Contractors, except Company for increases (A) required to be made pursuant to the terms of existing employment or travel and other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made reasonable and customary expenses incurred in the ordinary course of business and substantially consistent with past practice) or capital contributions to, or (D) in connection with changes investment in, any other Person, other than to benefits as part the Company or any direct or indirect Subsidiary of annual enrollment; provided that such changes made as part of annual enrollment are made the Company or otherwise in the ordinary course of businessconsistent with past practice or (iv) assume, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of guarantee (other than for cause, as determined by guarantees of obligations of the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance 's Subsidiaries entered into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
(i) sell, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregate, except in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice;
(j) agree to any exclusivity, non-competition or similar provision or covenant limiting the ability of the Company or any of its Subsidiaries to compete or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issueendorse, or otherwise as an accommodation become liable for any additional Indebtedness in excess of $5,000,000 in the aggregateresponsible for, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary obligations of Subsidiaries and the endorsements of negotiable instruments for collection in the ordinary course of business consistent with past practice);
(h) the Company will not and will not permit any of its Subsidiaries to (i) increase the compensation or severance payable or to become payable to any existing director and officer, except for any previously scheduled increases in compensation to existing officers in the ordinary course consistent with past practice, (ii) enter into any employment or severance agreement with any existing director or officer or any new officer, except as provided in Section 6.01(h) of the Company)Disclosure Schedule and except for an employment agreement with a new officer, entered into after consultation with Parent, providing for annual base compensation not to exceed $300,000, either individually, in the case of one such agreement, or in the aggregate for all such agreements.
(ivi) the Company will not and will not permit its Subsidiaries to adopt or amend (except as previously adopted or amended by the Company or a Subsidiary or as may be required by law) any bonus, profit sharing, compensation, stock option, pension, retirement, deferred compensation, employment or other employee benefit plan, agreement, trust, fund or other arrangement for the benefit or welfare of any employee, director or former director or employee, other than increases for individuals (other than existing officers and directors, except as provided in Section 6.01(h) above) in the ordinary course of business consistent with past practice.
(j) the Company will not and will not permit any of its Subsidiaries to take any action to or make any loantax election or to change any method of accounting, advance method of tax accounting or capital contribution accounting principles or practice by the Company or any of its Subsidiaries, except for any such change required by reason of a concurrent change in GAAP, Regulation S-X under the 1934 Act or other applicable law or regulation.
(k) the Company will not and will not permit any of its Subsidiaries to pay, discharge or satisfy any Person claim, liability or obligation in excess of $500,000 1,000,000 in any individual case or $3.0 million in the aggregate, other than capital contributions and loans the payment, discharge or satisfaction in the ordinary course of business of liabilities reflected or reserved against in the financial statements contained in the Company SEC Documents filed prior to any wholly owned Subsidiary, and extensions the date of trade credit this Agreement or incurred in the ordinary course of business, .
(vl) amend, modify the Company will not and will not permit any of its Subsidiaries to settle or waive compromise
(i) any provision shareholder derivative suits arising out of the Existing Credit transactions contemplated by this Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (viii) any other than material litigation (whether or not commenced prior to the regularly scheduled and date of this Agreement) or settle, pay or compromise any claims not required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreementto be paid;
(m) make, change or revoke the Company will not and will not permit any of its Subsidiaries to (i) take any action that would make any representation and warranty of the Company hereunder inaccurate in any material Tax electionrespect at, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect as of any material Taxtime prior to, settle the Effective Time or (ii) omit to take any material Tax Proceeding, surrender action necessary to prevent any right to claim a material Tax refund, offset such representation or other reduction warranty from being materially inaccurate in Tax liability, or consent to any extension or waiver of the limitations period applicable to respect at any material Tax claim or assessment outside the ordinary course of businesssuch time;
(n) make the Company will not waive or amend any commitment provision of the Rights Agreement or otherwise take any action with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;Rights Agreement; or
(o) institute, settle or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor will not, and will not permit any of its Subsidiaries shall settle to, agree or agree commit to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than in the ordinary course of business or as contemplated by this Agreement (i) amend, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an Affiliate of the Company;
(s) voluntarily terminate, amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Act; or
(u) authorize, commit or agree to take do any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentenceforegoing.
Appears in 2 contracts
Samples: Merger Agreement (Simpson Industries Inc), Merger Agreement (Mascotech Inc)
Conduct of the Company. The From the date hereof until the Effective Time, the Company covenants and agrees thatits Subsidiaries shall conduct their business in the ordinary course and in substantially the same manner as heretofore conducted and shall use their reasonable best efforts to preserve intact their business organizations and relationships with third parties and to keep available the services of their present officers and employees. Without limiting the generality of the foregoing, except for matters other than (i) expressly permitted or expressly contemplated by this Agreement, (ii) as set forth on Part 6.01 in Schedule 5.1 of the Company Disclosure Schedule, (ii) as specifically contemplated by this Agreement or (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken with the prior written consent of Parent (which shall not be unreasonably withheld, conditioned or delayed), (v) required by Applicable Law or the rules and regulations of NasdaqBuyer, from the date of hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereofTime, the Company (A) shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) conduct its business in the ordinary course in all material respects, substantially consistent with past practice, (2) to the extent consistent with the foregoing clause (1), maintain its business as a going concern and (3) keep available the services of its current officers and key employees and to preserve the goodwill of and maintain satisfactory relationships with those Persons having material business relationships with the Company and its Subsidiaries, and (B) shall not, and shall cause each of its Subsidiaries not to:
: (a) amend the Company’s certificate confer on a regular basis with one or more representatives of incorporation or bylaws, or amend Reckson and Crescent to report operational matters of materiality and any certificate of incorporation or bylaws, or other comparable charter or organizational documents, of the Company’s Subsidiaries;
proposals to engage in material transactions; (b) other than with respect to a direct or indirect wholly owned Subsidiary promptly notify Reckson and Crescent after becoming aware of any material change in the Company, condition (i) establish a record date for, declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock, property financial or otherwise) in respect of, or enter into any agreement with respect to the voting of, any capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), (ii) split, reverse split, combine, subdivide or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) of the Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c), issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), or (iv) purchase, redeem or otherwise acquire or offer to purchase, redeem or acquire any Company Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPP;
(c) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company Securities, other than (i) the issuance of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement or (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company;
(d) merge, consolidate or, other than in the ordinary course of business substantially consistent with past practice, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries;
(e) (i) increase the salary, wages, benefits, bonuses or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
(i) sell, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregate, except in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice;
(j) agree to any exclusivity, non-competition or similar provision or covenant limiting the ability of the Company or any of its Subsidiaries to compete or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (the normal course of its business or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under in the Securities Actoperation of its properties, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of governmental complaints, investigations or hearings (or communications indicating that the date hereof, same may be contemplated); (iiic) assume, guarantee or endorse the obligations promptly deliver to Reckson and Crescent true and correct copies of any Person (other than a wholly-owned Subsidiary of report, statement or schedule filed with the Company), (iv) make any loan, advance or capital contribution SEC subsequent to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;
(o) institute, settle or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than in the ordinary course of business or as contemplated by this Agreement (i) amend, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement; (d) duly and timely file all reports, or (ii) renew or enter into any Contract tax returns and other documents required to be filed with an Affiliate federal, state, local and other authorities, subject to extensions permitted by law, provided the Company notifies Reckson and Crescent that it is availing itself of such extensions and provided such extensions do not adversely affect the Company;
's status as a qualified REIT under the Code; (se) voluntarily terminate, amend not make or fail rescind any express or deemed election relative to renew Taxes (unless required by law or necessary to preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Act; or
(u) authorize, commit or agree to take any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, 's status as a REIT or the status of any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any noncorporate Subsidiary of the Company (including any COVID-19 Measuresas a partnership for federal income Tax purposes or as a Qualified REIT Subsidiary under section 856(i) or (y) respond to third-party supply or service disruptions caused by of the coronavirus (COVID-19) pandemic; provided that Code, as the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentence.case may be);
Appears in 2 contracts
Samples: Merger Agreement (Reckson Associates Realty Corp), Merger Agreement (Reckson Associates Realty Corp)
Conduct of the Company. The Company covenants and agrees thatFrom the date hereof until the Effective Time, except for matters (i) expressly permitted or except as expressly contemplated by this Agreement, (ii) Agreement or set forth on Part in Section 6.01 of the Company Disclosure Schedule, (iiiii) reasonably undertaken unless Parent shall otherwise approve in connection with any COVID-19 Measures, writing (iv) undertaken with the prior written consent of Parent (which shall such approval not to be unreasonably withheld, conditioned delayed or delayed), conditioned) and (viii) except as required by Applicable Law or the rules and regulations of Nasdaq, from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereofLaw, the Company (A) shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) to, conduct its business in the ordinary course in all material respects, substantially consistent with past practicepractice and use its reasonable best efforts to (A) preserve intact its present business organization, (2B) to the extent consistent with the foregoing clause maintain in effect all of its foreign, federal, state and local licenses, permits, consents, franchises, approvals and authorizations, (1), maintain its business as a going concern and (3C) keep available the services of its current directors, officers and key employees and to preserve the goodwill of and (D) maintain satisfactory relationships with those Persons its customers, lenders, suppliers and others having material business relationships with it. Without limiting the generality of the foregoing, (i) except as expressly contemplated by this Agreement or set forth in Section 6.01 of the Company and its SubsidiariesDisclosure Schedule, (ii) unless Parent shall otherwise approve in writing (such approval not to be unreasonably withheld, delayed or conditioned) and (Biii) except as required by Applicable Law, the Company shall not, and nor shall cause each it permit any of its Subsidiaries not to:
(a) amend the Company’s certificate its articles of incorporation or bylawsincorporation, or amend any certificate of incorporation or bylaws, bylaws or other comparable charter similar organizational documents (whether by merger, consolidation or organizational documents, of the Company’s Subsidiariesotherwise);
(b) other than with respect to a direct or indirect wholly owned Subsidiary of the Company, (i) establish a record date forsplit, combine or reclassify any shares of its capital stock, (ii) declare, set aside or pay any dividends on, dividend or make any other distributions distribution (whether in cash, stock, stock or property or otherwiseany combination thereof) in respect of its capital stock, except for (A) dividends by any of its wholly-owned Subsidiaries to the Company or to other wholly-owned Subsidiaries and (B) regular quarterly cash dividends by the Company with customary record and payment dates on the shares of Company Stock and Company Class B Stock not in excess of $0.18 per share per quarter or (iii) redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any Company Securities or any Company Subsidiary Securities, except pursuant to any Company Stock Plan or any Company Stock Option, Company RSU award (and any associated dividend equivalent units), Company SAR award or Phantom Stock Unit award (and, in each case, any associated dividend equivalent units) (including for purposes of satisfying applicable tax withholding requirements and payment of the exercise price in respect of any Company Stock Option);
(c) (i) issue, deliver or sell, or authorize the issuance, delivery or sale of, any Company Securities or enter into Company Subsidiary Securities, other than the issuance of (A) any agreement shares of the Company Stock upon the exercise of Company Stock Options, or the settlement of Company RSUs or Phantom Stock Units (in each case including any associated dividend equivalent units), that, in each case, are outstanding on the date of this Agreement (or granted hereafter in accordance with this Agreement) in accordance with the terms of those awards and (B) any Company Subsidiary Securities to the Company or any other wholly owned Subsidiary of the Company or (ii) amend any term of any Company Security or any Company Subsidiary Security (in each case, whether by merger, consolidation or otherwise);
(d) incur any capital expenditures or any obligations or liabilities in respect thereof, except for (i) those contemplated by the capital expenditure budget that has been made available to Parent prior to the date of this Agreement and (ii) any unbudgeted capital expenditures not to exceed $10,000,000 individually or $20,000,000 in the aggregate;
(e) acquire (by merger, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, any assets, securities, properties, interests or businesses, other than (i) supplies in the ordinary course of business consistent with past practice and (ii) acquisitions with a purchase price (including related assumed indebtedness) that do not exceed $25,000,000 individually or $50,000,000 in the aggregate;
(f) (i) sell, lease or otherwise transfer, or create or incur any Lien on, any of the Company’s or its Subsidiaries’ assets, securities, properties, interests or businesses, other than (A) sales of inventory or obsolete equipment in the ordinary course of business consistent with past practice, (B) sales of assets, securities, properties, interests or businesses with a sale price (including any related assumed indebtedness) that do not exceed $10,000,000 individually or $20,000,000 in the aggregate and (C) Permitted Liens or (ii) sell, lease, license or otherwise dispose of or permit to lapse any material Intellectual Property right, other than grants of non-exclusive licenses with respect to the voting of, any capital stock Intellectual Property of the Company or any of its Subsidiaries in the ordinary course of business consistent with past practice;
(or securities convertible or exchangeable thereforg) other than in connection with actions permitted by Section 6.01(e), or with wholly-owned Subsidiaries, make any loans, advances or capital contributions to, or investments in, any other Person;
(h) (i) create, incur, assume, suffer to exist or prepay any indebtedness for borrowed money or guarantees thereof other than in the ordinary course of business consistent with past practice, and in an amount that does not exceed $250,000,000 in the aggregate or (ii) splitenter into, reverse splitmodify in any material respect or terminate any material interest rate swaps or hedging arrangements except, combinein the case of hedging arrangements, subdivide in the ordinary course of business consistent with past practice;
(i) (i) enter into any contract, agreement, arrangement or reclassify understanding that would constitute a Material Contract if it had been entered into as of the date hereof or (ii) amend, modify in any material respect or terminate any Material Contract or any contract, agreement or understanding referred to in clause (i) or otherwise amend waive, release or assign any material rights, claims or benefits of the Company or any of its Subsidiaries thereunder;
(j) except as required to comply with Applicable Law or any Employee Plan in accordance with its terms on the date of this Agreement, (i) increase compensation, bonuses or other benefits payable to any capital stock director or employee of the Company or any of its Subsidiaries at the executive officer level; (ii) increase compensation, bonuses or securities convertible other benefits payable to any employee or exchangeable therefor) independent contractor of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice and to the extent not material; (iii) enter into, adopt or amend in any material respect any severance or retention plan, arrangement or policy applicable to any director, executive officer, employee or independent contractor, except as expressly provided in Section 6.01(cthe case of non-officer individuals who are newly hired or promoted after the date of this Agreement in the ordinary course of business consistent with past practice; (iv) enter into, adopt or amend in any material respect, including anything that would be covered in whole or in part by the foregoing clause (iii), issue any employment, change of control, compensation, bonus, profit-sharing, stock option or authorize other stock related rights or other forms of incentive or deferred compensation, retirement benefits or other benefit agreement, plan, arrangement or policy applicable to any director or executive officer or, except in the issuance ordinary course of business consistent with past practice, any other securities in respect of, in lieu of employee or in substitution for, shares of capital stock independent contractor of the Company or any of its Subsidiaries (and except in the case of non-officer individuals who are newly hired or securities convertible or exchangeable therefor), or (iv) purchase, redeem or otherwise acquire or offer to purchase, redeem or acquire any Company Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPP;
(c) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company Securities, other than (i) the issuance of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement or (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company;
(d) merge, consolidate or, other than promoted in the ordinary course of business substantially consistent with past practice; (v) pay based on, enter into strategic alliance accrue or similar legal partnership with certify performance level achievements for employees participating in a plan, program or arrangement at levels in excess of actually achieved performance in respect of any Personcomponent of an incentive-based award that requires achievement at a specified level of performance; (vi) amend or waive any performance or vesting criteria or accelerate vesting, file a voluntary petition for bankruptcy exercisability, distribution, settlement or liquidationfunding under any Employee Plan; or (vii) grant, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement authorize the grant of, any new bonus opportunities or resolutions providing set performance targets for any bonus opportunities;
(k) change the Company’s methods of accounting, except as required by concurrent changes in GAAP or authorizingin Regulation S-X of the 1934 Act, complete as agreed to by its independent public accountants;
(l) settle, or partial bankruptcyoffer or propose to settle, liquidation(i) any material litigation, dissolutioninvestigation, mergerarbitration, consolidation, restructuring, recapitalization proceeding or other reorganization of claim involving or against the Company or any of its Subsidiaries;
(e) (i) increase the salary, wages, benefits, bonuses or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan any stockholder litigation or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
(i) sell, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregate, except in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice;
(j) agree to any exclusivity, non-competition or similar provision or covenant limiting the ability of dispute against the Company or any of its Subsidiaries to compete officers or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, directors or (iii) by any Governmental Authority litigation, arbitration, proceeding or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse dispute that relates to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreementtransactions contemplated hereby;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;
(o) institute, settle or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(qn) fail enter into any bottling appointment, license agreement to maintain distribute product, bottler funding support agreement, or any ancillary agreement or amendment to any of the foregoing, in all material respects any Insurance Policies;
(r) each case, other than in the ordinary course of business or as contemplated by this Agreement (i) amend, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance consistent with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an Affiliate of the Company;
(s) voluntarily terminate, amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Actpast practice; or
(uo) authorizeagree, resolve or commit or agree to take do any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentenceforegoing.
Appears in 2 contracts
Samples: Merger Agreement (Pepsi Bottling Group Inc), Merger Agreement (Pepsico Inc)
Conduct of the Company. The Company covenants and agrees that, except for matters (i) expressly permitted or expressly contemplated by this Agreement, (ii) set forth on Part 6.01 of the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken with the prior written consent of Parent (which shall not be unreasonably withheld, conditioned or delayed), (v) required by Applicable Law or the rules and regulations of Nasdaq, from From the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereofClosing Date, the Company (A) shall, and such Seller shall cause each of its the Company and the Subsidiaries to use commercially reasonable efforts to (1) to, conduct its business in the ordinary course in all material respects, substantially consistent with past practiceand use its best efforts to (i) preserve intact its present business organization, (2ii) to the extent consistent with the foregoing clause maintain in effect all of its foreign, federal, state and local licenses, permits, consents, franchises, approvals and authorizations, (1), maintain its business as a going concern and (3iii) keep available the services of its current directors, officers and key employees and to preserve the goodwill of and Key Employees, (iv) maintain satisfactory relationships with those Persons its material customers, material lenders, material suppliers and others having material business relationships with the Company and its Subsidiariesit, and (Bv) manage its working capital (including the timing of collection of accounts receivable and of the payment of accounts payable) in the ordinary course of business. Without limiting the generality of the foregoing, except as expressly contemplated by this Agreement or approved in writing by Buyer in advance, such Seller shall not, and shall cause each not permit any of its the Company or the Subsidiaries not to:
(a) amend the Company’s certificate its articles of incorporation or bylawsincorporation, or amend any certificate of incorporation or bylaws, bylaws or other comparable charter similar organizational documents (whether by merger, consolidation or organizational documents, of the Company’s Subsidiariesotherwise);
(b) other than with respect to a direct or indirect wholly owned Subsidiary of the Company, (i) establish a record date for, declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock, property or otherwise) in respect of, or enter into any agreement with respect to the voting of, any capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), (ii) split, reverse split, combine, subdivide combine or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) of the Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c), issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any Subsidiary or declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its Subsidiaries (the capital stock of the Company or securities convertible or exchangeable therefor)any Subsidiary, or (iv) purchaseredeem, redeem repurchase or otherwise acquire or offer to purchaseredeem, redeem repurchase, or otherwise acquire any Company Securities or any Subsidiary Securities, except for dividends by any Subsidiary on a pro rata basis to the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPPequity owners thereof;
(c) (i) issue, deliver, deliver or sell, grantor authorize the issuance, announcedelivery or sale of, pledge, transfer, subject to any Lien, otherwise encumber or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value shares of any Company Securities or Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement or (B) grants or awards of Company any Subsidiary Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company;
(d) merge, consolidate or, other than in the ordinary course of business substantially consistent with past practice, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries;
(e) (i) increase the salary, wages, benefits, bonuses or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
(i) sell, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregate, except in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice;
(j) agree to any exclusivity, non-competition or similar provision or covenant limiting the ability of the Company or any of its Subsidiaries to compete or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;
(o) institute, settle or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than in the ordinary course of business or as contemplated by this Agreement (i) amend, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an Affiliate of the Company;
(s) voluntarily terminate, amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Act; or
(u) authorize, commit or agree to take any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentence.or
Appears in 2 contracts
Conduct of the Company. The Company covenants and agrees that, except for matters (i) expressly Except as contemplated or permitted or expressly contemplated by this AgreementAgreement or as otherwise approved in writing by Parent, (ii) set forth on Part 6.01 from the date of this Agreement until the time that the designees of Merger Sub have become members of the Board of Directors of the Company Disclosure Schedulein accordance with Section 1.01(d) hereof, (iii) reasonably undertaken the Company will, and will cause its Subsidiaries to, conduct their respective businesses in connection the ordinary course consistent with any COVID-19 Measures, (iv) undertaken with reasonable past practice. Subject to the prior written consent of Parent (which shall not be unreasonably withheld, conditioned or delayed), (v) required by Applicable Law or the rules and regulations of Nasdaqforegoing exceptions, from the date hereof until the earlier time that the designees of Merger Sub have become members of the Effective Time and Board of Directors of the termination of this Agreement Company in accordance with Article 8 Section 1.01(d) hereof, the Company (A) shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) conduct its business in the ordinary course in all material respects, substantially consistent with past practice, (2) to the extent consistent with the foregoing clause (1), maintain its business as a going concern and (3) keep available the services of its current officers and key employees and to preserve the goodwill of and maintain satisfactory relationships with those Persons having material business relationships with the Company and its Subsidiaries, and (B) shall not, and shall cause each of its Subsidiaries not to:
(a) amend the Company’s certificate Company will not adopt or approve any change or amendment in its articles of incorporation or bylaws, or amend any certificate of incorporation or bylaws, or other comparable charter or organizational documents, of the Company’s Subsidiaries;
(b) the Company will not, and will not permit any of its Subsidiaries to, merge, consolidate, or enter into a share exchange with any other than Person; acquire any material stock or any material amount of assets of any other Person; or sell, lease, license, mortgage, pledge, or otherwise dispose of any material assets except in the ordinary course of business consistent with respect to a direct reasonable past practice, or indirect transfers between the Company and/or its wholly owned Subsidiary of Subsidiaries;
(c) the Company, (i) establish a record date for, Company will not declare, set aside aside, or pay any dividends on, (other than dividends declared prior to the date hereof) or make any other distributions (whether in cash, stock, property or otherwise) in respect of, or enter into any agreement with respect to the voting of, any capital stock of shares of Company Stock;
(d) the Company or will not, and will not permit any of its Subsidiaries (or securities convertible or exchangeable therefor)to, (ii) split, reverse split, combine, subdivide or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) of the Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c), issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), or (iv) purchase, redeem or otherwise acquire or offer to purchase, redeem or acquire any Company Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPP;
(ci) issue, deliver, sell, grantencumber, announceor authorize or propose the issuance, pledgedelivery, transfersale, subject to or encumbrance of, any Lien, otherwise encumber capital stock or dispose of any equity interests other securities of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company Subsidiary Securities, other than (iA) pursuant to the Company Rights Agreement (as amended pursuant to Section 3.27) and (B) the issuance of shares of Company Common Stock pursuant upon the exercise of the Parent Stock Option or Company Options granted prior to (A) the terms of Company Equity Awards that are outstanding on the date hereof, in accordance with (ii) split, combine, or reclassify any shares of Company Stock or Company Subsidiary Securities, (iii) repurchase, redeem, or otherwise acquire any capital stock or other voting securities of the applicable terms of such Company Equity Awards as in effect on the date of this Agreement or any voting Company Subsidiary Securities, or (Biv) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to amend the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or any outstanding voting securities;
(iie) the issuance Company will not, without the prior written consent of shares of Company Common Stock under Parent, which consent shall not be unreasonably withheld or delayed, make any commitment or enter into any contract or agreement that, individually or in the ESPP and pursuant aggregate, is reasonably likely to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company be material to the Company or another wholly owned Subsidiary of the Company;
(d) merge, consolidate or, other than and its Subsidiaries taken as a whole except in the ordinary course of business substantially consistent with reasonable past practice, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries;
(e) (i) increase the salary, wages, benefits, bonuses or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereofpractices;
(f) hire, engage or terminate except to the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
(i) sell, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregate, except in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice;
(j) agree to any exclusivity, non-competition or similar provision or covenant limiting the ability of the Company or any of its Subsidiaries to compete or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are extent required by (i) GAAP (law or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, existing written agreements or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;
(o) institute, settle or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included plans disclosed in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that Reports, neither the Company nor any of its Subsidiaries shall settle will increase in any manner the compensation or agree to settle fringe benefits of any Proceeding which settlement involves a conduct remedy of its directors, officers or injunctive or similar relief or has a restrictive impact on the Company’s business or employees (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than increases in the ordinary course of business in the compensation or as contemplated by this Agreement (i) fringe benefits of any officers or employees who are not executive officers); pay any pension or retirement allowance to any such directors, officers or employees; become a party to, amend, modifyor commit itself to any pension, renew or terminateretirement, profit-sharing, welfare benefit plan, or employment agreement with or for the benefit of any such director, officer or employee; grant any release severance or waiver undertermination pay or stay-in-place bonus to any such director, officer or employee; or increase the benefits payable under any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) existing severance or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, termination pay or (ii) renew or enter into any Contract with an Affiliate of the Companystay-in-place bonus policies;
(sg) voluntarily terminate, amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;will not, and will not permit any of its Subsidiaries to, make any material Tax election or settle or compromise any material federal, state, local, or foreign Tax liability; and
(th) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Act; or
(u) authorize, commit or Company will not agree to take do any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentenceforegoing.
Appears in 2 contracts
Samples: Merger Agreement (Gamma Biologicals Inc), Merger Agreement (Immucor Inc)
Conduct of the Company. The Company covenants and agrees that, except for matters (i) Except as expressly permitted or expressly contemplated required by this Agreement, (ii) set forth on Part 6.01 of the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken Agreement or with the prior written consent of Parent (which shall not be unreasonably withheld, conditioned or delayed), (v) required by Applicable Law or the rules and regulations of NasdaqParent, from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereofTime, the Company (A) shall, and the Subsidiaries shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) conduct its their business in the ordinary course in all material respects, substantially consistent with past practice, (2) practice and shall use their best efforts to the extent consistent preserve intact their business organizations and relationships with the foregoing clause (1), maintain its business as a going concern third parties and (3) to keep available the services of its current their present officers and key employees and to preserve employees. Without limiting the goodwill generality of and maintain satisfactory relationships with those Persons having material business relationships with the foregoing, from the date hereof until the Effective Time, without the prior written consent of Parent, the Company and its Subsidiaries, and (B) shall will not, and shall will cause each of its the Subsidiaries not to:
(a) amend the Company’s certificate adopt or propose any change in its articles of incorporation or bylaws, or amend any certificate of incorporation or bylaws, or other comparable charter or organizational documents, of the Company’s Subsidiaries;
(b) other than with respect except pursuant to a direct existing agreements or indirect wholly owned Subsidiary of arrangements disclosed to Parent and Merger Sub in the Company, Schedules to this Agreement:
(i) establish acquire (by merger, consolidation or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof;
(ii) sell, lease or otherwise dispose of a record date forSubsidiary or assets or securities, in one transaction or a series of related transactions, with a book value in excess of $50,000 individually or $100,000 in the aggregate;
(iii) make any investment, whether by purchase of stock or securities, contributions to capital or any property transfer, other than investments which mature in less than 30 days and are rated no lower than A2/P2;
(iv) purchase for an amount in excess of $25,000 in the aggregate, any property or assets of any other individual or entity other than supplies or inventory purchased in the ordinary course consistent with past practice;
(v) waive, release, grant or transfer any rights of value material to the Company and the Subsidiaries taken as a whole;
(vi) modify or change in any material respect (A) any existing license, lease, contract or other document material to the Company and the Subsidiaries, taken as a whole or (B) any existing contract or other document with any laboratory, physician, physician group, hospital or other healthcare provider ;
(vii) incur, assume or prepay an amount of long-term or short-term debt, including obligations in respect of capital leases;
(viii) assume, guarantee, endorse (other than endorsements of negotiable instruments in the ordinary course of business) or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person (other than any Subsidiary);
(ix) make any loans or advances to any other Person or Persons (other than any Subsidiary) in excess of $25,000 in the aggregate; or
(x) excluding the capital expenditures associated with dialysis facilities under development (which facilities are set forth on Schedule 4.10(q)), make or commit to make any capital expenditures which, individually, is in excess of $10,000 or, in the aggregate (including any and all capital expenditures made from and after November 30, 1999), are in excess of $200,000; or
(c) (i) split, combine or reclassify any shares of its capital stock, (ii) declare, set aside or pay any dividends on, dividend or make any other distributions distribution (whether in cash, stock, stock or property or otherwiseany combination thereof) in respect of, or enter into any agreement with respect to the voting of, any capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), (ii) split, reverse split, combine, subdivide or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) of the Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c), issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), or (iv) purchase, redeem or otherwise acquire or offer to purchase, redeem or acquire any Company Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPP;
(c) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company Securitiesstock, other than (i) the issuance of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement or (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to cash dividends and distributions by a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly wholly-owned Subsidiary of the Company to the Company or to another wholly owned Subsidiary of the Company;
(d) merge, consolidate or, other than in the ordinary course of business substantially consistent with past practice, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries;
(e) (i) increase the salary, wages, benefits, bonuses or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
(i) sell, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregate, except in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice;
(j) agree to any exclusivity, non-competition or similar provision or covenant limiting the ability of the Company or any of its Subsidiaries to compete or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereofSubsidiary, (iii) assumeissue, guarantee sell, deliver, grant, pledge or endorse the obligations of encumber any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;
(o) institute, settle or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any shares of its Subsidiaries shall settle capital stock or agree to settle any Proceeding which settlement involves a conduct remedy securities convertible into or injunctive exchangeable or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than in the ordinary course of business or as contemplated by this Agreement (i) amend, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an Affiliate of the Company;
(s) voluntarily terminate, amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Act; or
(u) authorize, commit or agree to take any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentence.exercisable for,
Appears in 2 contracts
Samples: Merger Agreement (Renex Corp), Agreement and Plan of Merger (Renex Corp)
Conduct of the Company. The Company covenants and agrees that, except Except for matters (i) expressly permitted or expressly contemplated by this Agreement, (ii) set forth on Part 6.01 of the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken with the prior written consent of Parent (which shall not be unreasonably withheld, conditioned or delayed), (v) and required by Applicable Law the Transaction Documents or as otherwise consented to in advance by the rules and regulations of NasdaqInvestors, from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereofor the date of the Closing, the Company (A) shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) the other Group Companies to, conduct its business in the ordinary course in all material respects, substantially consistent with past practice, (2) of business and use its reasonable best efforts to the extent consistent with the foregoing clause (1), maintain its business as a going concern and (3) keep available the services of its current officers and key employees and to preserve the goodwill of and maintain satisfactory relationships with those Persons having material business relationships with the Company and its Subsidiaries, and (B) shall not, and shall cause each of its Subsidiaries not to:
(a) amend the Company’s certificate of incorporation or bylaws, or amend any certificate of incorporation or bylaws, or other comparable charter or organizational documents, of the Company’s Subsidiaries;
(b) other than with respect to a direct or indirect wholly owned Subsidiary of the Company, (i) establish a record date for, declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock, property or otherwise) in respect of, or enter into any agreement with respect to the voting of, any capital stock of the Company or any of preserve intact its Subsidiaries (or securities convertible or exchangeable therefor)present business organization, (ii) split, reverse split, combine, subdivide or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) of the Company or any maintain in effect all of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c), issue authorizations or authorize the issuance of any other securities in respect of, in lieu of permits from governmental or in substitution for, shares of capital stock of the Company or any of regulatory authorities necessary to conduct its Subsidiaries (or securities convertible or exchangeable therefor), or (iv) purchase, redeem or otherwise acquire or offer to purchase, redeem or acquire any Company Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPP;
(c) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company Securities, other than (i) the issuance of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement or (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company;
(d) merge, consolidate or, other than in the ordinary course of business substantially consistent with past practice, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries;
(e) (i) increase the salary, wages, benefits, bonuses or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
(i) sell, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregate, except in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice;
(j) agree to any exclusivity, non-competition or similar provision or covenant limiting the ability of the Company or any of its Subsidiaries to compete or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (viii) amendkeep available the services of its directors, modify officers and Key Employees, and (iv) maintain satisfactory relationships with its key material customers, material suppliers and others having material business relationships with it. Without limiting the generality of the foregoing, except for matters expressly contemplated by this Agreement or waive the Restructuring in accordance with the Restructuring Plan or as otherwise consented to in advance by the Investors (which consent will not unreasonably be withheld), the Company shall not, and shall not permit any of the other Group Companies to carry out any of the following actions:
(a) any amendment, alteration, or repeal of any provision of the Existing Credit Agreement (Restated Articles or other than to waive or otherwise cure constitutional documents of any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit AgreementGroup Company;
(mb) makeany increase or decrease in the authorized number of Preferred Shares or Ordinary Shares or any amendment or variation of any rights, change preferences, privilege or revoke any material Tax election, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 protection of the Code Series C Preferred Shares;
(c) any authorization, designation or similar provision of stateissuance, local whether by reclassification or non-U.S. law) in respect otherwise, of any material Taxnew class or series of shares or any other equity or debt securities convertible into equity securities of the Company ranking on a parity with or senior to the Series C Preferred Shares in right of redemption, settle liquidation preference, voting or dividends or any material Tax Proceeding, surrender increase in the authorized or designated number of any right such new class or series;
(d) any authorization or issuance of any Ordinary Shares or options or warrants therefore other than pursuant to claim a material Tax refund, offset an ESOP or other reduction in Tax liability, equity plan approved by the Board;
(e) any redemption or consent repurchase with respect to Ordinary Shares (excluding shares repurchased upon termination of an employee or consultant pursuant to any extension restricted share purchase agreement) or waiver of the limitations period applicable to Preferred Shares;
(f) any material Tax claim agreement by any Group Company or assessment its shareholders regarding an asset transfer outside the ordinary course of business, license of intellectual property out of the ordinary course of business, acquisition or a Liquidation Event (as defined in the Restated Articles attached hereto);
(g) any action that results in the payment or declaration of a dividend or other distribution on any Ordinary Shares or Preferred Shares;
(h) any voluntary dissolution or liquidation of any Group Company or any reclassification or recapitalization of the outstanding capital stock of any Group Company;
(i) any increase or decrease in the authorized number of or method of selecting members of the Board;
(j) any borrowings, loans or guarantees in excess of US$1,000,000 outside of the annual budget and operating plan attached hereto as Exhibit H, provided that such action shall be permitted if approved by at least one of the Investors;
(k) any interested party transaction other than commercial transactions with Series C Preferred Shareholders or their affiliates and other than transactions contemplated by the Restructuring unless approved by the Board (including a disinterested majority of directors);
(l) any action or transaction that would adversely impact the Restructuring or other material change in the offshore and onshore structure of the Group Companies;
(m) any capital commitment or expenditure in excess of US$1,000,000 outside of the annual budget and operating plan attached as Exhibit H, provided that such action shall be permitted if approved by at least one of the Investors;
(n) make hiring or terminating any commitment with respect to capital expenditures officers, or financial controller, or materially changing the terms of employment (including a change in the overall compensation package in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule20% over twelve months);
(o) institute, settle or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet material amendment of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; annual budget and operating plan attached as Exhibit H, provided that neither such amendment shall be permitted if approved by at least one of the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger SubInvestors;
(p) enter entering into any joint venture, material new line of businessalliance or exclusive license with respect to any material Company Owned IP;
(q) fail to maintain in all material respects any Insurance Policieschange of the size of the ESOP or other employee benefit plan;
(r) other than in the ordinary course of business or as contemplated by this Agreement (i) amend, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an Affiliate appointment and change of the Company;auditors and any material change in accounting policies, procedures or internal control over financial reporting; and
(s) voluntarily terminateauthorize, amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Act; or
(u) authorizeresolve, commit or agree to take do any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions things described in this sentenceSECTION 6.01.
Appears in 2 contracts
Samples: Series C Preferred Shares Purchase Agreement (InnoLight Technology Corp), Series C Preferred Shares Purchase Agreement (InnoLight Technology Corp)
Conduct of the Company. The Company covenants and agrees that, except for matters (ia) expressly permitted or Except as expressly contemplated by this Agreement, (ii) Agreement or as set forth on Part 6.01 of in the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken with the prior written consent of Parent (which shall not be unreasonably withheld, conditioned or delayed), (v) required by Applicable Law or the rules and regulations of Nasdaq, from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereofTime, the Company (A) shall, and each Subsidiary shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) conduct its their business in the ordinary course in all material respects, substantially consistent with past practicepractice and shall use their commercially reasonable best efforts to preserve intact their business organizations, (2) assets and good will, their relationships with suppliers, Governmental Authorities and Third Party Payors and to the extent consistent with the foregoing clause (1), maintain its business as a going concern and (3) keep available the services of its current their present officers and key employees and to preserve employees. Without limiting the goodwill of and maintain satisfactory relationships with those Persons having material business relationships with the Company and its Subsidiaries, and (B) shall not, and shall cause each of its Subsidiaries not to:
(a) amend the Company’s certificate of incorporation or bylaws, or amend any certificate of incorporation or bylaws, or other comparable charter or organizational documents, generality of the Company’s Subsidiaries;
(b) other than with respect to a direct or indirect wholly owned Subsidiary of the Companyforegoing, (i) establish a record date for, declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock, property or otherwise) in respect of, or enter into any agreement with respect except to the voting of, any capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), (ii) split, reverse split, combine, subdivide or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) of the Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c), issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), or (iv) purchase, redeem or otherwise acquire or offer to purchase, redeem or acquire any Company Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPP;
(c) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company Securities, other than (i) the issuance of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement or (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company;
(d) merge, consolidate or, other than in the ordinary course of business substantially consistent with past practice, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries;
(e) (i) increase the salary, wages, benefits, bonuses or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made extent in the ordinary course of business, consistent with past practice or except as otherwise approved in writing by Purchaser, or as expressly contemplated by this Agreement, from the date hereof until the Effective Time, the Company will not, and will not permit any Subsidiary (to the extent consistent with the Company's fiduciary obligations to holders of minority interests in any Subsidiary) to:
(i) sell, lease, license or otherwise dispose of any Subsidiaries, Facilities, Real Property, Ancillary Businesses, Licenses, Permits, CONs or other material assets or property except (A) pursuant to existing contracts, commitments or disposition plans set forth on the Company Disclosure Schedule, (B) sale of inventory and supplies or (C) transfers between the Company and/or its Subsidiaries;
(ii) other than enter into or amend any agreement with or affecting any director, officer or employee, which foregoing restriction includes, without limitation, (A) the increase in the compensation payable by the Company or any Subsidiary to, or to become payable by the Company or any Subsidiary to, any of their respective directors, officers or employees, except as required by pursuant to the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plancontract, agreement, arrangement, plan or policy that would be a Company Employee Plan if in effect arrangement set forth on the date hereof;
(f) hire, engage Company Disclosure Schedule or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets increases in the ordinary course of business and in amounts substantially consistent with past practice;
practices (i) sell, assign, lease, license, pledge, transfer, abandon, subject except that the Company may implement the changes in compensation and benefits set forth in the Company Disclosure Schedule with respect to any Lien, permit to lapse or otherwise dispose of any assets, propertiesthe Listed Executives), or Company Intellectual Property(B) enter into, in each case having a value in excess adopt, amend, modify, or terminate any material bonus, profit sharing, incentive, severance, or other material plan, collective bargaining agreement, contract, or commitment for the benefit of $500,000 individually or $5,000,000 in the aggregate, except in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice;
(j) agree to any exclusivity, non-competition or similar provision or covenant limiting the ability of the Company or any of its Subsidiaries to compete or engage in any line of businessdirectors, with any Person or in any geographic areaofficers, or pursuant to which any benefit employees (or right would be required to be given or lost as a result of so competing or engaging, or which would have take any such effect on Parent or action with respect to any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of other material Benefit Plan (except that the Company and its Subsidiaries or similar arrangements, that (x) are made in may implement the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereofRetention Plan), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(liii) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases other than renewals set forth in the ordinary course of business terms and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries conditions of the Companyexisting Leases and other than development and disposition plans currently in process set forth on a schedule thereof provided to Purchaser, (i) incuropen, issueacquire, purchase, lease or license any new Facility, or otherwise become liable for enter into or purchase any additional Indebtedness in excess of $5,000,000 in the aggregatelease or license therefor, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of renew, extend, amend or terminate any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), Lease;
(iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify assign or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;
(o) institute, settle or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than in the ordinary course of business or as contemplated by this Agreement (i) amend, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract contract that would have been constituted a Material Contract if in existence on the date of this Agreement;
(v) except as permitted under the existing credit lines of the Company or any relevant Subsidiary, incur, guarantee or assume any indebtedness for borrowed money, or any capitalized lease obligation;
(vi) other than in connection with PL/GL claims, pay, discharge or satisfy any claim, liability or obligation; provided, however, that it is expressly acknowledged and agreed that nothing in this Agreement will prevent the Company or any Subsidiary from satisfying claims or otherwise discharging its liabilities and obligations under the Company Plan of Reorganization;
(vii) subject to clause (v) in the following paragraph, incur or create or suffer any Encumbrance on any of the assets of the Company or any Subsidiary (other than Permitted Encumbrances);
(viii) other than with respect to Taxes, incur or assume any liability or obligation;
(ix) make any material change in any method of accounting or accounting practice or policy other than those required by GAAP;
(x) enter into any Governmental Agreements; or
(xi) make, change or rescind any express or deemed election relating to Taxes.
(b) Notwithstanding the foregoing, from the date hereof until the Effective Time, and whether or not in the ordinary course of business, the Company will not, and will not permit any Subsidiary (to the extent consistent with the Company's fiduciary obligations to holders of minority interests in any Subsidiary) to:
(i) adopt or propose any change in the Company's articles of incorporation or in the case of the Company's by laws, adopt or propose any change which would have a Company Material Adverse Effect (for purposes of this clause (i), even if such event resulting in a Company Material Adverse Effect occurs after November 21, 2004).
(ii) renew declare or enter into pay any Contract with an Affiliate of dividends or make any distributions on its Shares other than to the Company or any entity wholly-owned, directly or indirectly, by the Company;
(s1) voluntarily terminateissue, deliver or sell, or authorize or propose the issuance, delivery or sale of, any Company Securities or Company Subsidiary Securities, other than the issuance of Shares upon the exercise of Options and as permitted in Section 5.5, (2) split, combine or reclassify any Company Securities or Company Subsidiary Securities, (3) repurchase, redeem or otherwise acquire any Company Securities, or (4) grant, amend or fail modify the terms and conditions of any Options except as permitted in Section 5.5 or enter into any agreement to renew do any of the foregoing;
(iv) make, or preserve commit to make, any capital expenditure (or series of related capital expenditures), other than as contemplated in the Company's 2004 capital expenditure budget provided to the Purchaser including, for the avoidance of doubt, the contingency amount set forth in such budget which may be spent on capital expenditures in the reasonable discretion of the Company's Chief Executive Officer or Chief Financial Officer;
(v) incur or suffer any Encumbrances on any real property of the Company or any Company Communications License as Subsidiary, other than Permitted Encumbrances, or enter into any agreement to do so.
(vi) sell, transfer, lease, license or otherwise dispose of any skilled nursing facility or any Subsidiary which owns such a facility, or enter into any agreement, contract, option, rights of first offer or rights of first refusal, to do any of the foregoing except for the planned dispositions set forth on Part 6.01(s) of the Company Disclosure ScheduleStatement;
(tvii) conduct merge or consolidate any reductionSubsidiary with any other Person (other than a wholly-in-force owned Subsidiary or the Company) or acquire the capital stock or all or substantially all of employees the assets of any business or entity (other service providers than capital stock or otherwise implement any layoffs, in each case that could implicate the WARN Act; orassets of an existing wholly owned Subsidiary);
(uviii) authorize, commit take or agree to take any action that is intended to make, or has the purpose of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Companymaking, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules representation and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary warranty of the Company hereunder inaccurate in any material respect at, or as of any time prior to, the Effective Time; or
(including any COVID-19 Measuresix) terminate the engagement of Hxxxxxxx Lxxxx or modify the terms of such engagement in a manner as to eliminate the requirement that Hxxxxxxx Lxxxx be requested to render the Bring Down Opinion (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentenceas defined below).
Appears in 2 contracts
Samples: Merger Agreement (Mariner Health Care Inc), Merger Agreement (Mariner Health Care Inc)
Conduct of the Company. The Company covenants and agrees that, except for matters (i) expressly permitted or expressly contemplated by this Agreement, (ii) set forth on Part 6.01 of the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken with the prior written consent of Parent (which shall not be unreasonably withheld, conditioned or delayed), (v) required by Applicable Law or the rules and regulations of Nasdaq, from From the date hereof of this Agreement until the earlier of the Effective Time and the termination of this Agreement Agreement, except as contemplated by this Agreement, as set forth in accordance with Article 8 hereofSection 6.01 of the Company Disclosure Letter, as consented to in writing by Parent (such consent not to be unreasonably withheld, conditioned or delayed), or as required by applicable Law or Order, the Company (A) shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) to, conduct its business in the ordinary course in all material respectsand, substantially consistent with past practice, (2) to the extent consistent with the foregoing clause foregoing, use its commercially reasonable efforts to (1), maintain i) preserve intact its business as a going concern organization and (3ii) keep available the services of maintain generally its current officers and key employees and to preserve the goodwill of and maintain satisfactory relationships with those Persons having material business relationships with its customers, lenders, suppliers and others having business relationships with it; provided, that no action by the Company and or its SubsidiariesSubsidiaries with respect to matters specifically addressed in the subclauses of the next sentence shall be deemed a breach of this sentence unless such action would constitute a breach of such subclauses. Without limiting the generality of the foregoing, and from the date of this Agreement until the Effective Time, except as contemplated by this Agreement, as set forth in Section 6.01 of the Company Disclosure Letter, as consented to in writing by Parent (Bsuch consent not to be unreasonably withheld, conditioned or delayed) or as required by applicable Law or Order, the Company shall not, and nor shall cause each it permit any of its Subsidiaries not to:
(a) amend the Company’s certificate of incorporation or bylawsincorporation, or amend any certificate of incorporation or bylaws, bylaws or other comparable charter similar organizational documents (whether by merger, consolidation or organizational documents, otherwise) of the Company’s Subsidiaries;
(b) other than with respect to a direct or indirect wholly owned Subsidiary of the Company, (i) establish a record date for, declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock, property or otherwise) in respect of, or enter into any agreement with respect to the voting of, any capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), (ii) split, reverse split, combine, subdivide combine or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) of the Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c), issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of the capital stock of the Company or its Subsidiaries (or securities convertible or exchangeable therefor)Subsidiaries, or (iv) purchaseredeem, redeem repurchase or otherwise acquire or offer to purchaseredeem, redeem repurchase, or otherwise acquire any Company Securities or any Company Subsidiary Securities, except for (i) the declaration, setting aside or payment of any dividends or other distributions (or the redemption, repurchase or other acquisition of Company Subsidiary Securities, or offer thereto) by any of its Subsidiaries payable solely to the Company or any of its Subsidiaries and (ii) acquisitions, or deemed acquisitions, of Company Stock in connection with (A) the payment of the exercise price of Company Stock Options with Company Stock (including in connection with “net exercises”) and (B) required Tax withholding in connection with the exercise of Company Stock Options and the vesting or settlement of Company Equity Awards Restricted Shares, Company RSUs or acquisitions of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPPPSUs;
(c) issue, deliver, deliver or sell, grantor authorize the issuance, announcedelivery or sale of, pledge, transfer, subject to any Lien, otherwise encumber or dispose shares of any equity interests Company Securities or Company Subsidiary Securities, other than the issuance of any shares of the Company Stock in connection with the exercise of Company Stock Options or incur any obligation to make any payments to any Person based on the price vesting or value settlement of Company Restricted Shares, Company RSUs or Company PSUs in accordance with the applicable terms thereof and the issuance, delivery or sale of any shares of Company SecuritiesSubsidiary Securities to the Company or any of its Subsidiaries;
(d) acquire (by merger, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, any assets, securities, properties, interests or businesses, other than (i) supplies and materials in the issuance ordinary course of shares business of the Company Common Stock and its Subsidiaries in a manner that is consistent with past practice, (ii) pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as Contracts in effect on the date of this Agreement or (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or Agreement, (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to leases or subleases under which the Company or another wholly owned Subsidiary one of its Subsidiaries is the Company;
(d) merge, consolidate or, other than tenant entered into in the ordinary course of business substantially consistent with past practicebusiness, enter into strategic alliance and (iv) assets, securities, properties, interests or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization businesses of the Company or any of its Subsidiaries;
(e) (i) increase the salary, wages, benefits, bonuses or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
(i) sell, assign, lease, license, pledge, lease or otherwise transfer, abandonor abandon or create or incur any Lien on, subject to directly or indirectly, any Lien, permit to lapse or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregate, except in the ordinary course of the Company’s or its Subsidiaries’ assets, securities, properties, interests or businesses, other than (i) sales of inventory or obsolete equipment in the ordinary course of business substantially consistent with past practice, (ii) sales of assets, securities, properties, interests or business immaterial to the Company and its Subsidiaries, (iii) sales, leases or transfers that are pursuant to Contracts in effect on the date of this Agreement, (iv) Permitted Liens, or (v) sales, licenses, leases or other transfers to the Company or any of its Subsidiaries;
(f) other than those contemplated on Section 6.01 of the Company Disclosure Letter, make any loans, advances or capital contributions to, or investments in, any other Person, other than loans, advances or capital contributions to, or investments in, the Company or any of its Subsidiaries;
(g) create, incur or assume any indebtedness for borrowed money or guarantees thereof or issue or sell any debt securities, except for (i) indebtedness under the Company Credit Facility, (ii) guarantees by the Company of indebtedness of any wholly owned Subsidiary of the Company (which indebtedness exists as of the date of this Agreement), or (iii) indebtedness or guarantees between or among the Company and any of its Subsidiaries or the Company’s wholly owned Subsidiaries;
(h) other than in the ordinary course of business, enter into any agreement or arrangement that limits or otherwise restricts in any material respect the Company or any of its Subsidiaries from engaging or competing in any line of business, in any location or with any Person or (ii) enter into any agreement or arrangement that limits or otherwise restricts in any material respect any upstream Affiliates of the Company following consummation of the Mergers from engaging or competing in any line of business, in any location or with any Person;
(i) without prior consultation with Parent, (i) recognize any material new union, works council or other similar employee representative, except as required by Applicable Law, or (ii) enter into any material collective bargaining agreement, or renew or enter into any material mid-term modification (excluding resolutions of grievances relating to or interpretations of a collective bargaining agreement) of any existing collective bargaining agreement;
(j) agree without limiting Section 8.09, settle, or offer or propose to settle, (A) any litigation, investigation, arbitration, proceeding or other claim involving or against the Company or any of its Subsidiaries or (B) any stockholder litigation or dispute against the Company or any of its officers or directors, except, in each case, for settlements solely in respect of monetary damages not exceeding $500,000 (after giving effect to any exclusivityreasonably expected indemnification proceeds);
(k) [Reserved];
(l) other than (x) in the ordinary course of business (including renewals consistent with the terms thereof), non-competition (y) in a manner not materially adverse to the Company and its Subsidiaries, taken as a whole, or similar provision (z) as otherwise may be reasonably necessary to comply with the terms of this Agreement, (i) amend or covenant limiting modify in any material respect or terminate (excluding terminations or renewals upon expiration of the ability term thereof in accordance with the terms thereof) any Company Material Contract or (ii) enter into (or renew or otherwise extend the terms of) any Contract that would have been a Company Material Contract had it been entered into prior to the date of this Agreement;
(m) except (x) as required pursuant to a Company Plan or a Contract in effect on the date of this Agreement, or (y) as otherwise required by applicable Law, (i) grant or provide any severance or termination payments or benefits to any employee, officer, or director of the Company or any of its Subsidiaries to compete Subsidiaries, (ii) accelerate the time of payment or engage in any line of business, with any Person or in any geographic areavesting of, or pursuant to which any benefit or right would be required to be given or lost as a result the lapsing of so competing or engagingrestrictions with respect to, or which would have fund or otherwise secure the payment of, any such effect on Parent compensation or benefits to any employee, officer, or director of the Company or any of its Affiliates after Subsidiaries, (iii) increase the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners compensation payable to any officer or suppliers director of the Company and or any of its Subsidiaries or similar arrangementsSubsidiaries, that (xiv) are made except in the ordinary course of business substantially consistent with past practicepractice (including employee promotions), (yx) are on terms substantially similar increase the compensation payable to any salaried employee of the Company or any of its Subsidiaries, other than increases in base salary not in excess of 5% of any such restrictions existing individual’s base salary as in effect on the date of this Agreement and or (zy) would not have increase the compensation payable to any such effect (or otherwise restrict or bind) on Parent hourly employee of the Company or any of its Affiliates (Subsidiaries, other than increases in hourly base wage rates not in excess of 20% of any such individual’s hourly base wage as in effect on the date of this Agreement, or (vi) establish, adopt, terminate or materially amend any Company and its Subsidiaries) after Plan or any plan, program, arrangement, policy or agreement that would be a Company Plan if it were in existence on the Effective Timedate of this Agreement;
(kn) adopt change the Company’s methods of financial accounting, except as required by GAAP or change any Regulation S-X of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP Exchange Act (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure ScheduleLaw;
(o) institute, settle or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than in the ordinary course of business or as contemplated by this Agreement (i) amendmake or change any material election with respect to Taxes, modify, renew or terminate, or grant (ii) amend any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreementmaterial Tax Return, or (iiiii) renew agree to settle any material claim or enter into any Contract assessment in respect of Taxes for an amount materially in excess of the amount accrued or reserved with an Affiliate respect thereto on the Company Balance Sheet (or in a more recent Company consolidated balance sheet included in the Company SEC Documents);
(p) adopt or publicly propose a plan of complete or partial liquidation or resolutions providing for or authorizing such a liquidation or a dissolution, in each case, of the Company;
; or (sq) voluntarily terminateagree, amend resolve or fail commit to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Act; or
(u) authorize, commit or agree to take do any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentenceforegoing.
Appears in 2 contracts
Samples: Merger Agreement (Team Inc), Merger Agreement (Furmanite Corp)
Conduct of the Company. The Company covenants (a) From the date hereof and agrees thatprior to the earlier to occur of the Closing Date and the date that this Agreement is terminated in accordance with Article IX (the “Interim Period”), except for matters (i) expressly permitted or as otherwise expressly contemplated by this AgreementAgreement (including as described on Section 6.1 of the Seller Disclosure Schedule and the other matters contemplated by the other Schedules and Exhibits hereto) or any of the other Transaction Documents, (ii) set forth on Part 6.01 for the effect of the Company Disclosure Scheduleconsummation of the transactions contemplated hereby, (iii) reasonably undertaken with respect to (A), below, with respect to any actions taken in connection with any COVID-19 Measuresinternal restructuring of the Company and the Company Entities in connection with the transactions contemplated by this Agreement as contemplated by Section 6.1(a)(iii) of the Seller Disclosure Schedule and any effects resulting therefrom (a “Restructuring”), and (iv) undertaken with the prior written consent of Parent as otherwise approved in writing by Buyer (which approval shall not be unreasonably withheld, conditioned or delayed), (v) required by Applicable Law or the rules and regulations of Nasdaq, from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereof, the Company (A) shall, and Seller shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) conduct its business in the ordinary course in all material respects, substantially consistent with past practice, (2) to the extent consistent with the foregoing clause (1), maintain its business as a going concern and (3) keep available the services of its current officers and key employees and to preserve the goodwill of and maintain satisfactory relationships with those Persons having material business relationships with the Non-JV Company and its Subsidiaries, and (B) shall not, and shall cause each of its Subsidiaries not Entities to:
(a) amend the Company’s certificate of incorporation or bylaws, or amend any certificate of incorporation or bylaws, or other comparable charter or organizational documents, of the Company’s Subsidiaries;
(b) other than with respect to a direct or indirect wholly owned Subsidiary of the Company, (i) establish a record date for, declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock, property or otherwise) in respect of, or enter into any agreement with respect to the voting of, any capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), (ii) split, reverse split, combine, subdivide or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) of the Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c), issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), or (iv) purchase, redeem or otherwise acquire or offer to purchase, redeem or acquire any Company Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPP;
(c) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company Securities, other than (i) the issuance of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement or (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company;
(d) merge, consolidate or, other than conduct their respective businesses in the ordinary course of business substantially consistent with past practicepractice (including (x) ordinary course development activities and (y), enter into strategic alliance with respect to a PG&E Condition or similar legal partnership with any PersonBankruptcy Event, file taking such reasonable actions as would be appropriate for a voluntary petition for bankruptcy or liquidationcontractual counterparty to take under such circumstances); and
(B) use commercially reasonable efforts to preserve, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization maintain and protect the assets and properties of the Non-JV Company Entities ordinary wear and tear excepted.
(b) Without limiting the generality of the foregoing, during the Interim Period, except (1) with respect to items (vi), (xiii), (xvii) and (xviii), below, with respect to any PG&E Condition or Bankruptcy Event, (2) with respect to items (i) and (ii), below, with respect any actions taken in connection with a Restructuring and any effects resulting therefrom, (3) with respect to any payments or credit support paid or posted pursuant to any Material Contract, and (4) as otherwise expressly contemplated by this Agreement (including as described on Section 6.1 of the Seller Disclosure Schedule and the other matters contemplated by the other Schedules and Exhibits hereto) or any of its Subsidiaries;
(e) (i) increase the salary, wages, benefits, bonuses or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of businessTransaction Documents, and except as otherwise approved in writing by Buyer (ii) other than as required by the terms of the applicable Company Employee Plan which approval shall not be unreasonably withheld, conditioned or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits underdelayed), modify or terminate any Seller shall cause the Non-JV Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of Entities not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;to:
(i) amend the Governing Documents of any Non-JV Company Entity, except as requested by Buyer in order to comply with its obligations under Section 6.4(c);
(ii) authorize for issuance, issue, grant, sell, assigndeliver, leasedispose of, licensepledge or otherwise encumber any Interests of any Non-JV Company Entity, pledgeor issue any Rights to subscribe for or acquire any shares or Interests of any Non-JV Company Entity;
(iii) except as required by GAAP, transferchange any accounting methods, abandonprinciples or practices of any Non-JV Company Entity;
(iv) sell, subject to any Lien, permit to lapse transfer or otherwise dispose of any assets, properties, or of the assets of the Non-JV Company Intellectual Property, in each case Entities having a value in excess of $500,000 individually or $5,000,000 in the aggregate, aggregate to any Person (other than to any other Company Entity) except in the ordinary course of business (and in arm’s length transactions to the Company’s extent such sale, transfer or its Subsidiaries’ business substantially consistent disposition is to any Affiliate of Seller), or encumber any such assets other than with past practicea Permitted Lien;
(jv) agree to any exclusivity, non-competition or similar provision or covenant limiting the ability of the Company or any of its Subsidiaries to compete or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made except in the ordinary course of business substantially consistent (and in arm’s length transactions to the extent such transactions are with past practiceany Affiliate of Seller), permit any Non-JV Company Entity to (x) create, incur or assume any long-term debt (other than to any other Company Entity), (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assetsassume, liabilities or businessguarantee, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, endorse or otherwise become liable or responsible (whether directly or indirectly) for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), any Company Entity) or (ivz) make any loanloans, advance advances or capital contribution contributions to or investments in any Person (other than any Company Entity, in each case, in excess of $500,000 in the aggregate, other than capital contributions and loans ;
(vi) cancel any material third party indebtedness owed to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, Non-JV Company Entity;
(vvii) amend, modify enter into or materially amend or waive any material provision of the Existing Credit Agreement (any Affiliate Contract other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(nviii) except as contemplated by the capital expenditures budget set forth on Exhibit F, make any commitment with respect to acquisitions, investments or capital expenditures in excess of $1,000,000 individually, or $3,000,000 in the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Scheduleaggregate;
(oix) instituteliquidate, settle dissolve, recapitalize or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of otherwise wind up its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(qx) merge or consolidate with, or purchase substantially all of the assets or businesses of, or equity interests in, or make an investment in, any Person;
(xi) issue or sell any equity interests, notes, bonds or other securities of such Company Entity, or any option, warrant or right to acquire the same;
(xii) declare, set aside, make or pay any dividends or distributions, except (a) to a Company Entity or (b) cash dividends or cash distributions (excluding dividends or distributions of proceeds of insurance claims from casualty events occurring after the date hereof);
(xiii) outside the ordinary course of business (and in arm’s length transactions to the extent such Contract is with any Affiliate of Seller), enter into any Contract that if in effect on the date hereof would be a Material Contract or terminate or materially amend, or settle or compromise any material claim under any Material Contract or Real Property Agreement;
(xiv) amend or modify any material Permit;
(xv) fail to maintain in all full force and effect insurance policies covering the Company Entities material respects any Insurance Policiesassets in form and amount consistent with past practice;
(rxvi) enter into any joint venture, partnership, or other contract involving a sharing of profits, losses, costs, or liabilities with any other Person (other than any Company Entity) or relating to the ownership of a partnership, membership or other equity interest in any Person (other than another Company Entity);
(xvii) initiate any material litigation or settle or compromise any material claim or litigation, whether now pending or hereafter made or brought or waive, release or assign any material rights or claims in each case except as may be necessary appropriate for the ordinary course of business or as contemplated by this Agreement respective Non-JV Company Entity (i) amend, modify, renew to preserve or terminate, or grant not prejudice any release or waiver under, rights of such Non-JV Company Entity with respect to any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, such claim or (ii) renew to enforce its rights under any Contract;
(xviii) request or require the acceleration of the payment of any amount owed, defer the payment of any material accounts payable, enter into any Contract sale-leaseback contract with an Affiliate of the Company;respect to any asset, revalue any material assets, including writing off notes or accounts receivable, accelerate, settle, discount or compromise any accounts receivable or reverse any reserves with respect thereto; and
(sxix) voluntarily terminateagree, amend whether in writing or fail otherwise, to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Act; or
(u) authorize, commit or agree to take do any of the foregoing.
(c) Notwithstanding the foregoing actions. Notwithstanding or anything set forth in this Agreement to the contrary, Seller and the Company Entities may take (or not take, as the case may be) any of the actions described in Section 6.1 if reasonably necessary under emergency circumstances (or as required pursuant to applicable Law). Nothing contained in this Agreement shall be construed to give Buyer or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shallof its Affiliates, directly or indirectly, exercise any form of right to control over or direct the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary businesses of the Company (including Entities prior to the Closing or any COVID-19 Measures) other businesses or (y) respond operations of Seller or its Affiliates. Prior to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that Closing, Seller shall exercise such control and supervision of the Company shall, to Entities and of their respective businesses and operations as is consistent with the extent legally permissible terms and only if time permits, consult with Parent prior to taking the actions described in conditions of this sentenceAgreement and their respective Governing Documents.
Appears in 2 contracts
Samples: Purchase and Sale Agreement (Consolidated Edison Co of New York Inc), Purchase and Sale Agreement (Sempra Energy)
Conduct of the Company. The Company covenants and agrees that, except for matters Except as (i) expressly permitted or is expressly contemplated by this Agreement, (ii) set forth on Part 6.01 of the Company Disclosure Schedulemay be required by applicable law, or (iii) reasonably undertaken may be agreed in connection with any COVID-19 Measuresadvance and in writing, (iv) undertaken with between Buyer and the prior written consent Representative of Parent (which shall not be unreasonably withheldthe Globisens Shareholders, conditioned or delayed)or, (v) required if under applicable law the decision is taken solely at the Board level, the approval of the directors appointed by Applicable Law or the rules and regulations of NasdaqBruker, from the date hereof until the earlier expiration of the Effective Time and the termination of this Agreement in accordance with Article 8 hereofPut Option, the Company (A) shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) conduct its business in the ordinary course and, to the extent consistent therewith, shall use commercially reasonable efforts to preserve intact its business organizations and relationships with customers, suppliers, legal counsel, distributors, creditors, lessors, unions, employees and business associates in all material respects. Without limiting the generality of the foregoing, substantially consistent with past practice, (2) subject to the extent consistent with exceptions set forth in clauses (i) through (iii) above, from the foregoing clause Closing Date until the earlier of (1a) the payment according to the Put Option or (b) the expiration of the Put Option (the “Interim Period”), maintain its business as a going concern and (3) keep available without the services prior written approval of its current officers and key employees and to preserve the goodwill of and maintain satisfactory relationships with those Persons having material business relationships with Representative, the Company and its Subsidiaries, and (B) shall not, and shall cause each of its Subsidiaries not to:
(a) amend the Company’s certificate of incorporation or bylaws, or amend any certificate of incorporation or bylaws, or other comparable charter or organizational documents, of the Company’s Subsidiariesotherwise modify its Amended Articles;
(b) other than with respect to a direct or indirect wholly owned Subsidiary of the Company, (i) establish a record date forredeem, declare, set aside repurchase or pay any dividends on, or make any other distributions (whether in cash, stock, property or otherwise) in respect of, or enter into any agreement with respect to the voting of, any capital stock of the Company or otherwise acquire any of its Subsidiaries (share capital or securities convertible or exchangeable therefor)other securities, (ii) issue, sell, pledge, dispose of or encumber any share capital, or securities convertible into or exchangeable for any share capital, or (iii) split, reverse split, combine, subdivide combine or reclassify any of its share capital (iii) register any transfer of the Subject Globisens Shares or otherwise amend new Encumbrance of such Shares (other than to the benefit of Globisens Shareholders according to the terms of any capital stock (or securities convertible or exchangeable therefor) of the Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(cthis Agreement), issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), or (iv) purchase, redeem or otherwise acquire or offer to purchase, redeem or acquire any Company Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPP;
(c) issuemerge or consolidate with, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber or dispose acquire all or substantially all of the assets of any equity interests of the Company business or incur any obligation to make any payments to any Person based on the price corporation, partnership, joint venture, association or value of any Company Securities, other than (i) the issuance business organization or division thereof; or effect an acquisition of shares or assets (including by way of Company Common Stock pursuant to (Amerger) the terms of Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement or (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Companycompany;
(d) mergesell, consolidate orlease, other than license or otherwise distribute or dispose of any material assets or property, except the sale of inventory in the ordinary course of business substantially consistent with past practice, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiariesbusiness;
(e) (i) increase the salaryincur, wagesassume, benefits, bonuses guarantee or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except modify any indebtedness for increases (A) required to be made pursuant to the terms borrowed money in excess of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that100,000, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions (ii) create, incur or suffer to exist any Encumbrance upon any of inventory, supplies, intellectual property assets, raw materials, equipment its assets or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
(i) sell, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value properties in excess of $500,000 100,000, individually or $5,000,000 in the aggregate, except in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice;
(jf) agree transfer or license to any exclusivitythird party or otherwise extend, non-competition amend or similar provision or covenant limiting the ability of the Company or modify any of its Subsidiaries to compete or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar rights to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregateIP, other than capital contributions and loans non-exclusive licenses to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision extent such licenses are an integral part of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event sale of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;
(o) institute, settle or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than inventory in the ordinary course of business or as contemplated by this Agreement (i) amend, modify, renew or terminate, or grant pursuant to any release or waiver under, any Material Company Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have has been a Material Contract if in existence on made available to Buyer prior to the date of this Agreement, or hereof);
(iig) renew or enter into any Contract with an Affiliate change the manufacturer/production facility of the Company;
(sh) voluntarily terminateincrease the size of the Board or change the composition of the Board;
(i) effect any dissolution, amend liquidation or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) other winding up of the Company Disclosure Scheduleor the cessation of all or a substantial part of the business of the Company;
(tj) conduct any reduction-in-force except for a material breach by Bruker of employees his obligations and agreement under the Bruker Employment Agreement, appoint or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Act; or
(u) authorize, commit or agree to take any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of remove the Company’s CEO;
(k) change or and/or effect any Subsidiary’s employees, suppliers, customers deviation therefrom from the 2 year annual operating plan and other individuals having business dealings with budget previously furnished by the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior Buyer.
(l) declare or pay any cash dividends or make any cash distributions to taking the actions described in this sentenceits shareholders .
Appears in 2 contracts
Samples: Stock Purchase Agreement (Boxlight Corp), Stock Purchase Agreement (Boxlight Corp)
Conduct of the Company. The Company covenants and agrees that, except for matters (i) expressly permitted or expressly contemplated by this Agreement, (ii) set forth on Part 6.01 of the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken with the prior written consent of Parent (which shall not be unreasonably withheld, conditioned or delayed), (v) required by Applicable Law or the rules and regulations of Nasdaq, from From the date hereof until the earlier of the Exchange Effective Time and the termination of this Agreement in accordance with Article 8 hereofTime, the Company (A) shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) to, conduct its business in the ordinary course in all material respects, substantially consistent with past practicepractice and use its reasonable best efforts to (i) preserve intact its present business organization, (2ii) to the extent consistent with the foregoing clause maintain in effect all Permits, (1), maintain its business as a going concern and (3iii) keep available the services of its current officers and key directors, officers, employees and to preserve the goodwill of and (iv) maintain satisfactory relationships with those Persons its customers, lenders, suppliers and others having material significant business relationships with it. Without limiting the generality of the foregoing, except as expressly contemplated by this Agreement or as set forth in Section 8.01 of the Company and its SubsidiariesDisclosure Schedule, and (B) the Company shall not, and nor shall cause each it permit any of its Subsidiaries not to:
(a) amend the Company’s certificate its articles of incorporation or bylawsincorporation, or amend any certificate of incorporation or bylaws, bylaws or other comparable charter similar organizational documents (whether by merger, consolidation or organizational documents, of the Company’s Subsidiariesotherwise);
(b) other than with respect to a direct or indirect wholly owned Subsidiary of the Company, (i) establish a record date forsplit, combine or reclassify any shares of capital stock, (ii) declare, set aside or pay any dividends on, dividend or make any other distributions distribution (whether in cash, stock, stock or property or otherwiseany combination thereof) in respect of, or enter into any agreement with respect to the voting of, any of capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), (ii) split, reverse split, combine, subdivide or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) of the Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c)redeem, issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), or (iv) purchase, redeem repurchase or otherwise acquire or offer to purchaseredeem, redeem repurchase, or otherwise acquire any Company Securities or any Company Subsidiary Securities;
(c) (i) issue, deliver or sell, or authorize the issuance, delivery or sale of, any shares of any Company Securities or Company Subsidiary Securities, except for other than the net settlement issuance of (A) any shares of the Company Stock upon the exercise of Company Equity Awards or acquisitions Stock Options that are outstanding on the date of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or this Agreement in accordance with the terms of the ESPP;
(c) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber or dispose of any equity interests of the those Company or incur any obligation to make any payments to any Person based on the price or value of any Company Securities, other than (i) the issuance of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect Options on the date of this Agreement or and (B) grants or awards of any Company Subsidiary Securities or Company Equity Awards required to be made pursuant to the terms of existing employment Company or any other compensation agreements or arrangements in effect as Subsidiary of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent Company or (ii) the issuance amend any term of shares of any Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement Security or any Company Subsidiary Security (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company in each case, whether by merger, consolidation or another wholly owned Subsidiary of the Companyotherwise);
(d) mergeincur any capital expenditures or any obligations or liabilities in respect thereof, consolidate orexcept for (i) capital expenditures commitments outstanding on the date of this Agreement and (ii) individual capital expenditure items inferior to $250,000;
(e) acquire (by merger, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, any assets, securities, properties, interests or businesses, other than assets acquired in order to maintain and operate the business of the Company and its Subsidiaries in the ordinary course of business of the Company and its Subsidiaries in a manner that is consistent with past practice;
(f) (i) sell, lease or otherwise transfer, or create or incur any Lien on, the Company’s or its Subsidiaries’ assets, securities, properties, interests or businesses, other than in the ordinary course of business substantially consistent with past practice or (ii) permit to lapse any material Intellectual Property owned by the Company or any of its Subsidiaries;
(g) make any loans or advances other than in the ordinary course of business consistent with past practice;
(h) make any investments other than in (i) United States Treasury bonds, (ii) debt securities issued or guaranteed by an agency of the United States Government, and (iii) debt securities issued by the Federal National Mortgage Association (FNMA) or the Federal Home Loan Mortgage Corporation (FHLMC), in each case with a final maturity of less than 2 years from the date of any such investment, ;
(i) create, incur, assume, or otherwise be liable with respect to any indebtedness for borrowed money or guarantees thereof, other than in the ordinary course of business and in amounts and on terms consistent with past practices;
(i) enter into strategic alliance any contract, agreement, arrangement or similar legal partnership with understanding that would constitute a Material Contract if it had been entered into as of the date hereof or (ii) terminate, amend or modify in any Personmaterial respect, file a voluntary petition for bankruptcy any Material Contract or liquidationotherwise waive, dissolverelease or assign any material rights, liquidate, restructure claims or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization benefits of the Company or any of its Subsidiaries;
(ek) (i) increase with respect to any current or former director, officer, employee or independent contractor of the salaryCompany or any of its Subsidiaries, wages, benefits, bonuses or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required grant or increase any severance or termination pay to be made pursuant to the terms of (or amend any existing employment severance or other compensation agreements or arrangements in effect as of the date hereoftermination arrangement with), (B) required under enter into any Company Employee Plan pursuant to the terms employment, consultancy, deferred compensation, severance, change in effect as of the date hereof control, retention, transaction bonus or Collective Bargaining Agreement incentive, retirement or under Applicable Law, other similar agreement or arrangement (or amend any such existing agreement or arrangement) or (C) made except for increases in the ordinary course of business and substantially consistent with past practice, or (D) in connection practice with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution respect to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
(i) sell, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregate, except in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice;
(j) agree to any exclusivity, non-competition or similar provision or covenant limiting the ability employee of the Company or any of its Subsidiaries whose annual base salary does not exceed $150,000, increase compensation, bonus or other benefits payable to compete or engage in any line of business, with any Person or in any geographic areasuch employee, or pursuant to which (ii) establish, adopt or amend (except as required by Applicable Law) any collective bargaining, bonus, profit-sharing, thrift, pension, retirement, deferred compensation, equity-based compensation or other benefit plan or right would be required to be given arrangement covering any director, officer, employee or lost as a result independent contractor of so competing or engaging, or which would have any such effect on Parent the Company or any of its Affiliates after Subsidiaries; provided that, the Company shall be permitted, prior to the Exchange Effective Time, exceptto pay short-term incentive bonuses to employees on the same basis as provided in Section 9.02(d) hereof.
(l) change the Company’s methods of accounting, except as required by concurrent changes in each case, GAAP or in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers Regulation S-X of the Company and 1934 Act, as agreed to by its Subsidiaries independent public accountants;
(i) settle, or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practiceoffer or propose to settle, (yA) are on terms substantially similar to any such restrictions existing on material litigation, investigation, arbitration, proceeding or other claim involving or against the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent Company or any of its Affiliates Subsidiaries, (other than B) any shareholder litigation or dispute against the Company and or any of its Subsidiariesofficers or directors or (C) after any litigation, arbitration, proceeding or dispute that relates to the Effective Timetransactions contemplated hereby or (ii) enter into any consent order or decree;
(kn) adopt make or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file adopt or change any method of material amended Tax Return accounting, materially amend any Tax Returns or file any claims for material Tax Return in a manner inconsistent with past practicerefunds, enter into any “material closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceedingclaim, audit or assessment, or surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;
(o) institute, settle materially restructure or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities materially change its investment securities portfolio or obligations (A) reserved against on the most recent balance sheet of the Company included its gap position except in the Company SEC Documents ordinary course of business consistent with past practice (and in consultation with Parent), through purchases, sales or (B) involving payments of less than $500,000 individually otherwise, or $1,000,000 the manner in which the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle portfolio is classified or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Subreported;
(p) enter into any material new line of business, exit any existing line of business, or materially change its lending, investment, underwriting, risk and asset liability management and other banking and operating policies, except as required by Applicable Law;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than participate in the ordinary course Troubled Asset Relief Program administered by the United States Department of business the Treasury pursuant to the Emergency Economic Stabilization Act of 2008 or as contemplated by this Agreement (i) amendin any plan, modify, renew order or terminateproposal of, or grant any release or waiver underoffer by, any Material Contract (excluding Governmental Authority that would result in the expiration issuance by the Company or any of its Subsidiaries of any Material Contract in accordance with its terms) capital stock, voting or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreementnon-voting securities (including warrants and debt securities), or (ii) renew or enter into any Contract with an Affiliate of the Company;
(s) voluntarily terminate, amend or fail Company Securities to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Act; or
(u) authorize, commit or agree to take any of the foregoing actions. Notwithstanding anything set forth in this Agreement a Governmental Authority or any other documents related to party or that would otherwise interfere with the Merger, prior to the Closing, neither ability of Parent nor Merger Sub shallto, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any one hundred percent of the Governmental Permits, within the meaning voting power of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety one hundred percent of the Company’s outstanding shares of Company Virginia Sub Common Stock following the Closing Date; or (r) agree, resolve or commit to do any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentenceforegoing.
Appears in 2 contracts
Samples: Transaction Agreement (Banco Santander, S.A.), Transaction Agreement (Sovereign Bancorp Inc)
Conduct of the Company. The Company covenants (a) During the period commencing on the date of this Agreement and agrees thatending on the earlier of the termination of this Agreement in accordance with ARTICLE 8 and the Effective Time (the “Pre-Closing Period”), except for matters (i) expressly permitted or expressly contemplated by this Agreement, (iiw) set forth on Part in Section 6.01 of the Company Disclosure ScheduleSchedules, (iiix) reasonably undertaken in connection with any COVID-19 Measuresrequired by Applicable Law, (ivy) expressly required by this Agreement or (z) undertaken with the prior written consent of Parent (which shall not be unreasonably withheld, conditioned or delayed), (v) required by Applicable Law or the rules and regulations of Nasdaq, from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereofParent, the Company (A) shall, and shall cause each conduct the business of its Subsidiaries to use commercially reasonable efforts to (1) conduct its business the Company in the ordinary course in all material respectscourse, substantially consistent with past practice, and use its reasonable efforts to (2i) to preserve intact the extent consistent with the foregoing clause material aspects of their business organizations, assets, leases and Technology, (1), maintain its business as a going concern and (3ii) keep available the services of its current officers and key employees of the Company, (iii) maintain in effect all of its material Permits and to insurance policies and (iv) maintain and preserve the goodwill of and maintain satisfactory its material relationships with those Persons material customers, lenders, vendors, service providers, suppliers, licensors, licensees, distributors and others having material business relationships with the Company and its Subsidiaries, and (B) shall not, and shall cause each of its Subsidiaries not to:
(a) amend the Company’s certificate of incorporation or bylaws, or amend any certificate of incorporation or bylaws, or other comparable charter or organizational documents, of the Company’s Subsidiaries;.
(b) other than Without limiting the generality of the foregoing in Section 6.01(a) and except for matters (w) set forth in Section 6.01 of the Company Disclosure Schedules, (x) required by Applicable Law, (y) expressly required by this Agreement or (z) undertaken with the prior written consent of Parent, the Company shall not:
(i) amend the Organizational Documents of the Company (whether by merger, consolidation or otherwise);
(ii) issue, sell, grant, pledge or otherwise dispose of or grant or suffer to exist any Lien with respect to the Company Securities or any other capital stock of the Company, or grant any options, warrants or other rights to acquire or any such capital stock or other interest in or any instrument convertible into or exchangeable or exercisable for any such capital stock or other interest, other than the issuance of shares of Company Common Stock (A) upon the exercise of Company Stock Options outstanding as of the date of this Agreement pursuant to existing Company Stock Plans or pursuant to the terms of the Company Restricted Stock Units that are outstanding on the date of this Agreement, in each case in accordance with the applicable Company Stock Plan’s and Company Equity Award’s terms as in effect on the date of this Agreement, (B) pursuant to the Company’s ESPP in accordance with the terms thereof and this Agreement, or (C) upon the exercise of Company Stock Options or settlement of Company Restricted Stock Units granted in accordance with Section 6.01(b)(xix) below;
(iii) amend any term of any Company Security (whether by merger, consolidation or otherwise);
(iv) except in connection with actions permitted by Section 6.02 hereof, take any action to exempt any Person from, or make any acquisition of securities of the Company by any Person not subject to, any state takeover statute or similar statute or regulation that applies to the Company with respect to an Acquisition Proposal or otherwise, including the restrictions on “business combinations” set forth in Section 203 of the DGCL, except for Parent, Merger Sub, or any of their respective Subsidiaries or Affiliates, or the Transactions;
(v) except in connection with actions permitted by Section 6.02 hereof, adopt any plan of merger, consolidation, reorganization, liquidation or dissolution of the Company, file a direct petition in bankruptcy under any provisions of federal or indirect wholly owned state bankruptcy Applicable Law on behalf of the Company or consent to the filing of any bankruptcy petition against the Company under any similar Applicable Law;
(vi) create any Subsidiary of the Company, ;
(ivii) (A) establish a record date for, declare, accrue, set aside or pay any dividends on, dividend or make any other distributions distribution on or in respect of (whether in cash, stock, property or otherwise) in respect of, the Company’s capital stock or enter into any agreement with respect other securities (other than dividends to the voting ofCompany) or (B) redeem, repurchase or otherwise reacquire (or offer to redeem, repurchase or otherwise reacquire), split, combine or reclassify any Company Securities or capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor)Company, (ii) split, reverse split, combine, subdivide or reclassify or otherwise amend change the terms of any capital stock (or securities convertible or exchangeable therefor) structure of the Company Company;
(viii) make any material changes in any accounting methods, principles or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c), issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), or (iv) purchase, redeem or otherwise acquire or offer to purchase, redeem or acquire any Company Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Companypractices, in each case, except as required by a change in satisfaction GAAP or required by holders of Company Equity Awards of Applicable Law;
(ix) change in any material respect the applicable withholding taxes policies or practices regarding accounts receivable or accounts payable or fail to manage working capital in all material respects in accordance with the terms of the ESPPpast practices;
(cx) issueaccelerate, deliverterminate or consent to the termination of, sellcancel, grantexercise or fail to exercise an expiring renewal option, announcematerially amend, pledge, transfer, subject to any Lien, otherwise encumber or dispose grant a waiver of any equity interests of the Company material right under or incur otherwise (x) materially modify any obligation to make Material Contract or any payments to any Person based on the price or value of any Company Securities, other than (i) the issuance of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards Contract that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as would constitute a Material Contract if in effect on as of the date of this Agreement or (By) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements enter into Contract that would constitute a Material Contract if in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement (provided, however, that if the Company requests to take any action prohibited by this Section 6.01(b)(x), Parent will not unreasonably withhold, consent or delay providing written consent to such action);
(iiixi) make, or agree or commit to make any capital expenditure in excess of $100,000 in the issuance aggregate, other than such capital expenditures that are described (with dollar values attributed) in the Company’s capital plan for fiscal 2019 (a copy of equity interests of a wholly owned Subsidiary which was previously provided to Parent on October 8, 2018);
(xii) repurchase, prepay, incur, assume or guarantee any Indebtedness to any Person, issue or sell any debt securities of the Company or guarantee any debt securities of any other Person or enter into any arrangement having the economic effect of any of the foregoing;
(xiii) grant or suffer to exist any Liens on any properties or assets of the Company that are material to the Company Company, other than Permitted Liens;
(xiv) make any capital investment in or another wholly owned Subsidiary loan or advance to, or forgive any loan to, any other Person;
(xv) other than in the ordinary course of business, acquire, sell, lease, sublease, license, sublicense, abandon, waive, relinquish, transfer, pledge, abandon, assign, swap, mortgage, hypothecate or otherwise dispose of or subject to any Lien any of the material assets, properties or rights of the Company;
(dxvi) mergepurchase or acquire, consolidate ordirectly or indirectly (including by merger, consolidation, or acquisition of stock or assets or any other business combination), any corporation, partnership, other business organization or division thereof or any other business or all or substantially all of the assets of any Person;
(xvii) enter into a new line of business or abandon or discontinue any existing line of business;
(xviii) settle, pay, discharge or satisfy any Proceeding (or agree to do any of the foregoing), other than any settlement, payment, discharge or satisfaction of Proceedings arising after the date hereof (which the Company shall keep Parent reasonably apprised of the status of each such Proceeding) that (A) relates to any Stockholder/Transaction Litigation (with respect to which any settlements, releases, waivers or compromises shall be subject to Section 6.11) or (B) (1) results solely in a monetary obligation involving only the payment of monies by the Company of not more than $250,000, individually or in the aggregate for all such Proceedings (excluding any settlements or settlement amounts funded by an indemnity obligation to, or an insurance policy of, the Company and the payment of monies by the Company) and (2) would not involve any admission of guilt or impose any material restrictions or limitations upon the operations or business of or other conduct remedy or injunctive relief applicable to the Company, whether before, on or after the Effective Time;
(xix) except as required by Applicable Law or agreements, plans or arrangements existing on the date hereof, (A) increase the compensation payable or that could become payable by the Company to directors, officers or employees, other than increases with respect to Company Employees who are not directors or executive officers in the ordinary course of business in connection with the Company’s annual merit-based compensation review process, (B) enter into any new, or amend in any material respect, any existing employment, indemnification, severance, retention, change in control or similar agreement with any of its past or present directors or employees, (C) establish, adopt, enter into, materially amend, terminate, or take any action to accelerate rights under any Company Employee Plans or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this Agreement, (D) enter into any third-party Contract with respect to a Company Employee Plan (including Contracts for the provision of services to such Company Employee Plan, including benefits administration) having a term of greater than one (1) year, other than ordinary course renewals of existing Company Employee Plans pursuant to their terms, (E) fund any rabbi trust or similar arrangement, (F) grant or amend any equity or equity-based awards except as required by existing Company Stock Plans or (G) hire any employee or independent contractor, other than in the ordinary course of business substantially consistent with past practice, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries;
(e) (i) increase the salary, wages, benefits, bonuses or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of service (other than for cause, as determined by the Company) of any employee, officer, director, employee or Independent Contractor whose annual base cash compensation exceeds $250,000independent contractor;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
(i) sell, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregate, except in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice;
(j) agree to any exclusivity, non-competition or similar provision or covenant limiting the ability of the Company or any of its Subsidiaries to compete or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;
(o) institute, settle or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(rxx) other than in the ordinary course of business consistent with past practice, sell, license, sublicense, covenant not to xxx under, abandon, allow to lapse, assign, transfer, disclose, create any Lien on (other than Permitted Liens), or as contemplated by this Agreement (i) otherwise grant any rights under any Company Owned IP, or amend, modifyrenew, renew or terminate, sublicense, assign or grant otherwise modify any release license or other agreement by the Company with respect to any Company Licensed IP;
(xxi) settle or compromise any claim relating to a material amount of Taxes, agree with a Taxing Authority as to any material adjustment of any Tax attribute or Tax Incentive, consent to any extension or waiver underof the statute of limitations period that will remain in effect after the Closing Date applicable to a material amount of Taxes, enter into any Material closing agreement with respect to Taxes, amend any Tax Return, make any material change in any of the methods, principles or practices used by it for Tax accounting except as required by Applicable Law, or file any material Tax election or any election pursuant to Section 7701 of the Code and the Treasury Regulations thereunder;
(xxii) enter into any material transaction or Contract with any Affiliate, holder of five percent (excluding 5%) or more of the expiration Shares, director or executive officer of any Material Contract in accordance with its terms) the Company or enter into any new other material transaction or Contract with any other Person that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an Affiliate of the Company;
(s) voluntarily terminate, amend or fail be required to renew or preserve any Company Communications License as set forth on Part 6.01(s) of be reported by the Company Disclosure Schedule;
(t) conduct any reductionpursuant to Item 404 of Regulation S-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate K under the WARN Exchange Act; or
(uxxiii) authorizeauthorize any of, commit or agree or commit to take take, any of the actions described in the foregoing actions. clauses (i) through (xxii) of this Section 6.01(b).
(c) Notwithstanding anything set forth to the contrary in this Section 6.01, the parties hereto acknowledge and agree that nothing contained in this Agreement shall give Parent or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shallSub, directly or indirectly, exercise any form of the right to control over or direct the Company, any of its subsidiaries, or any ’s operations (including for purposes of the Governmental Permits, within HSR Act and any other applicable Antitrust Laws) prior to the meaning of Offer Acceptance Time. Prior to the FCC Rules and the FCC’s orders and other published rulings thereunder. In additionEffective Time, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employeesshall exercise, suppliers, customers and other individuals having business dealings consistent with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shallterms and conditions hereof, to the extent legally permissible complete control and only if time permits, consult with Parent prior to taking the actions described in this sentencesupervision over its operations.
Appears in 2 contracts
Samples: Merger Agreement (Gurnet Holding Co), Merger Agreement (Corium International, Inc.)
Conduct of the Company. The From the date of this Agreement until the Effective Time, the Company covenants shall, and agrees thatshall cause each of its Subsidiaries to, conduct its business in the ordinary course consistent with past practice (including capital expenditures in the ordinary course pursuant to the Company’s 2014 budget) and in compliance with all material Applicable Laws and all material governmental authorizations, and use its reasonable best efforts to preserve intact its present business organization, material assets and properties, maintain in effect all Company Permits, keep available the services of its directors, officers and employees and maintain satisfactory relationships with its customers, lenders, suppliers, distributors and others having material business relationships with it. Without limiting the generality of the foregoing and to the fullest extent permitted by Applicable Law, from the date of this Agreement until the Effective Time, except for matters (i) expressly permitted or expressly contemplated by this Agreement, (ii) as set forth on Part in Section 6.01 of the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken with the without Parent’s prior written consent of Parent (which shall such consent not to be unreasonably withheld, conditioned or delayed), (v) or to the extent permitted or required by Applicable Law or the rules and regulations of Nasdaq, from the date hereof until the earlier of the Effective Time and the termination another Section of this Agreement in accordance with Article 8 hereofAgreement, the Company (A) shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) conduct its business in the ordinary course in all material respects, substantially consistent with past practice, (2) to the extent consistent with the foregoing clause (1), maintain its business as a going concern and (3) keep available the services of its current officers and key employees and to preserve the goodwill of and maintain satisfactory relationships with those Persons having material business relationships with the Company and its Subsidiaries, and (B) shall not, and shall cause each not permit any of its Subsidiaries not to:
(a) amend the Company’s certificate of incorporation or bylaws, or amend any certificate of incorporation or bylaws, or other comparable charter or organizational documents, Organizational Documents of the Company’s SubsidiariesCompany or its Subsidiaries (whether by merger, consolidation or otherwise);
(b) other than with respect to a direct or indirect wholly owned Subsidiary of the Company, (i) establish a record date for, declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock, property or otherwise) in respect of, or enter into any agreement with respect to the voting of, any capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), (ii) split, reverse split, combine, subdivide redenominate or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) of the Company or any shares of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c), issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor)stock, or (ivii) purchaseissue, redeem deliver, redeem, repurchase, cancel or otherwise acquire or offer to purchaseissue, redeem deliver, redeem, repurchase or acquire otherwise acquire, directly or indirectly, any Company SecuritiesSecurity or any Company Subsidiary Security, except for or (iii) amend or propose to amend any term of any Company Security or any Company Subsidiary Security, except, in the net settlement case of each of the foregoing clauses (i) and (ii), by the Company Equity Awards or acquisitions its Subsidiaries (x) in connection with the exercise of Options in accordance with their terms, (y) in connection with the acceleration of vesting of Options in accordance with their terms, or (z) with respect to repurchases of shares of Company Common Stock by and Options from Securityholders under the CompanyStockholders’ Agreement, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes Incentive Plan or in accordance with the terms of the ESPPany Option Agreement;
(c) issuedeclare, deliverset aside, sell, grant, announce, pledge, transfer, subject to make or pay any Lien, otherwise encumber or dispose dividend in respect of any equity interests shares of its capital stock or other securities (except dividends of cash and cash equivalents of the Company or incur any obligation to make any payments to any Person based on and its Subsidiaries and the price or value of any Company Securities, other than (i) the issuance of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement or (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the CompanyNon-Core Real Estate);
(d) mergesell, consolidate orlease (as lessor), other than license, assign, transfer, convey, abandon, terminate or otherwise dispose of, or modify, amend, extend or renew any agreement with respect to, any Subsidiary or any amount of assets, securities or property, except (i) pursuant to existing Contracts as of the date hereof (including terminations or renewals of such existing Contracts), (ii) inventory (including, raw materials, work in process and finished goods) in arms-length transactions in the ordinary course of business substantially consistent with past practiceor for the purpose of disposing of obsolete or worthless assets, enter into strategic alliance (iii) in arms-length transactions in the ordinary course of business in each case involving the receipt of consideration of $250,000 or similar legal partnership with any Personless individually (or receipt of consideration of less than $500,000 for all such sales, file a voluntary petition for bankruptcy or liquidationleases, dissolveencumbrances and other dispositions in the aggregate), liquidateprovided that such sales, restructure or recapitalize or adopt a plan or agreement ofleases, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization encumbrances or other reorganization dispositions referred to in this clause (iii) do not materially impact the ability of the Company and its Subsidiaries to conduct their business in the ordinary course, or any (iv) with respect to capital equipment to the extent replaced with new capital equipment of like purpose and which such new capital equipment constitutes an asset of the business of the Company and its Subsidiaries;
(e) (i) increase the salaryform any subsidiary, wages, benefits, bonuses or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend acquire (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwiseacquisition of stock or all or substantially all of the assets) thatany equity interest or all or substantially all of the assets or any real property of any corporation, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregatepartnership, other than one business organization or more acquisitions any division thereof from any other Person, (iii) merge or consolidate with any other Person or (iv) adopt a plan of inventorycomplete or partial liquidation, suppliesdissolution, intellectual property assetsrecapitalization, raw materials, equipment reorganization or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
restructuring (ior resolutions providing for or authorizing such action) sell, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregate, except in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice;
(j) agree to any exclusivity, non-competition or similar provision or covenant limiting the ability of the Company or any of its Subsidiaries to compete (other than the Merger);
(f) voluntarily create or engage in incur any line of businessLien on any material asset, with except Permitted Liens, Liens securing any Person indebtedness or in any geographic areaguaranties incurred without violating this Section 6.01, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made immaterial Lien incurred in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar practice and which is reasonably necessary to any such restrictions existing on conduct the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective TimeCompany’s business as presently conducted;
(kg) adopt make any loan, advance or change investment either by purchase of stock or securities, contributions to capital, property transfers, or purchase of any property or assets of the accounting methods used by the Company materially affecting its assets, liabilities or businessany Person, except for such changes that are required by (i) GAAP (loans or any interpretation thereof)advances to, or investments in, its wholly-owned Subsidiaries, (ii) by any Applicable Law, including Regulation S-X under the Securities Act, loans or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases advances to employees in the ordinary course of business and except for intercompany loansconsistent with past practices, guaranteeswith outstanding amounts, advance or capital contribution between the Company and at any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Companytime, (i) incur, issue, or otherwise become liable for any additional Indebtedness not in excess of $5,000,000 100,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, aggregate and (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit provided in the ordinary course of business;
(h) create, incur, assume, suffer to exist or otherwise be liable with respect to any indebtedness for borrowed money or guarantees thereof except (i) any draw downs on the Company’s revolving credit facility under the Credit Agreement (or a replacement facility thereof), (ii) such indebtedness or guarantees that exist on the date hereof, or (iii) other indebtedness (and any guarantees thereof) not exceeding an outstanding amount at any time in excess of $2,000,000; provided that all amounts incurred and outstanding under this Section 6.01(h) at the Closing Date shall be included in “Funded Indebtedness”;
(i) enter into any Contract that would have been a Company Material Contract described in clauses (i) through (viii) of Section 4.14(a) were the Company or any of its Subsidiaries a party or subject thereto on the date of this Agreement in each case other than (A) sales representative or distributor contracts in the ordinary course consistent with past practice, that do not impose exclusivity restrictions on the Company or its Affiliates, (B) customer contracts in the ordinary course consistent with past practice, and (C) Contracts for actions which are specifically permitted by any exception set forth in this Section 6.01;
(j) terminate, amend, renew, or extend in any material respect any Company Material Contract described in clauses (i) through (viii) of Section 4.14(a) or waive any material right thereunder, other than in the ordinary course of business on terms consistent with past practice (including in terms both of timing and amounts);
(k) except (x) as required by Applicable Law, (y) pursuant to the terms of any existing Contract or Employee Plans or (z) under any under any collective bargaining agreements that are disclosed in Section 4.16(h) of the Company Disclosure Schedule, (i) materially increase the bonus (including any long-term cash incentive award), salary, wages or other compensation payable or benefits provided to any employee or individual consultant or independent contractor of the Company or any of its Subsidiaries, except for increases in the ordinary course of business consistent with past practice for individuals whose base salary is less than $175,000, (ii) enter into or amend any employment, change of control, retention, severance or similar agreement, or establish, amend or terminate any Employee Plan, (iii) grant any severance or termination pay, modifications thereto or increases thereof to any employee or individual consultant or independent contractor of the Company or any of its Subsidiaries other than pursuant to the Company’s practices in effect on the date hereof that are described in Section 4.16(a) of the Company Disclosure Schedule, (iv) loan or advance any money to any employee or individual consultant or independent contractor of the Company or any of its Subsidiaries, other than in the ordinary course of business and consistent with past practice with outstanding amounts, at any time, not in excess of $100,000 in the aggregate, (v) amendexcept as may be required to implement the actions contemplated by this Agreement, modify including Section 2.03, accelerate the vesting or waive payment of any provision of the Existing Credit Agreement compensation or benefit under any Employee Plan, (vi) hire or terminate (other than for cause) any Person who (x) will be (after the date of hire) or is (in case of termination) an employee or individual consultant or independent contractor of the Company or any of its Subsidiaries and (y) is reasonably expected to waive receive a base salary, in case of hire, or otherwise cure any “Default” or “Event receives a base salary, in case of Default” thereunder termination, in excess of $175,000 (provided that Parent has been the Company or its Subsidiaries shall be permitted to hire any Person to replace a departed employee or individual consultant or independent contractor); (vii) increase the funding obligation or contribution rate of any Employee Plan, other than in the ordinary course of business and consistent with past practice; or (viii) award any equity or equity-based awards, except the Company may grant equity or equity-based awards, so long as (A) any equity award is an Option and will be treated in accordance with Section 2.03, or is a share of Company Common Stock and will be treated in accordance with Section 2.02, and payment with respect to which shall be subject to Section 6.06, to the extent applicable, and (B) the value of any equity-based awards shall be considered, to the extent not paid prior to Closing, an Unpaid Company Transaction Expense (provided prior written notice thereof and consented to that such amendment, modification or waiveramount shall not be paid in accordance with Section 2.05(e), or (vibut shall be paid in cash in accordance with the terms of the applicable incentive plans and award agreements) other than and payment with respect to which shall be subject to Section 6.06, to the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreementextent applicable;
(mi) make, change or revoke any material Tax electionelection (except for elections made in the ordinary course of business or consistent with the Company’s past practices); (ii) settle or compromise any claim, change notice, audit report or assessment in respect of a material amount of Taxes; (iii) amend any annual previously filed income or other material Tax accounting periodReturn; (iv) enter into any Tax allocation agreement, file any material amended Tax Return sharing agreement, Tax indemnity agreement or file closing agreement relating to any material Tax Return (other than commercial agreements entered into in a manner inconsistent with past practicethe ordinary course of business, enter into any “closing agreement” within the meaning principal purpose of Section 7121 of the Code which is not related to indemnification for Taxes); (v) file or similar provision of state, local surrender or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender forfeit any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or extension, (vi) consent to any waiver of the statute of limitations period applicable to any income or other material Tax claim or assessment outside Tax Return (other than in the ordinary course of business), (vii) fail to pay any material Tax when due, or (viii) file any Tax Return to carryback any item relating to any payment or expense described in the definition of Transaction Tax Deductions, and (ix) take any action that is reasonably likely to result in a reduction of the Company’s or its Subsidiaries’ Tax Attributes (other than the use of such Tax attributes in the ordinary course of business or in connection with the sale of the Non-Core Real Estate);
(m) make any payments with respect to any intercompany loan balance between Xxxxxx Equipment Company (as the lender) and Xxxxxx Equipment de Mexico, S.A. de C.V. (as the borrower), except in connection with the sale or distribution of the Non-Core Real Estate under Section 2.10;
(n) make any commitment with material change in any method of accounting or accounting principles or practice used by the Company or any of the working capital policies applicable to the Company and its Subsidiaries, except for any such change required by reason of a concurrent change in GAAP or Regulation S-X under the 1934 Act;
(o) compromise, waive, release, assign, settle, or offer or propose to waive, release, assign or settle, any litigation, investigation, arbitration, suit, action, proceeding or other claim, other than compromises, settlements or agreements that involve only the payment of monetary damages, in any case without the imposition of equitable relief on, or the admission of wrongdoing by, the Company or any of Subsidiary of the Company, and which are not in respect to capital expenditures in excess of the amounts matter set forth in Part 6.01(n)(ion Section 6.01(o) of the Company Disclosure Schedule;
(oi) institute, settle or agree fail to settle any Proceedingsuse reasonable efforts maintain and keep in full force and effect all material existing material insurance policies for the benefit of the Company and its Subsidiaries, other than such policies that expire by their terms (iin which event the Company and its Subsidiaries shall use reasonable efforts to renew or replace such policies) or changes to such policies made in the settlement ordinary course of claimsbusiness;
(p) with respect to material Company Intellectual Property, liabilities or obligations (A) reserved against on the most recent balance sheet sell, assign, license, sublicense, encumber, impair, abandon, fail to diligently maintain, transfer or otherwise dispose of any right, title or interest of the Company included or any of its Subsidiaries in any of the material Company SEC Documents or Intellectual Property, (B) involving payments extend, amend, waive, cancel or modify any rights in or to material Company Intellectual Property, (C) fail to diligently prosecute the material patent applications owned by the Company or any of less its Subsidiaries, or (D) divulge, furnish or make accessible any Trade Secrets within the material Company Intellectual Property to any third party who is not subject to a written agreement to maintain the confidentiality of such Trade Secrets;
(q) enter into, amend, waive or terminate (other than terminations in accordance with their terms) any Contract with any Affiliate of the Company;
(r) except as required by Applicable Law, enter into, modify, renew or extend any collective bargaining agreement or other labor agreement with any union, works council or labor organization, or recognize any union, works council or labor organization as the bargaining representative for any employees of the Company or its Subsidiaries;
(s) except for capital expenditures in the ordinary course pursuant to the Company’s 2014 budget, authorize any capital expenditures in excess of $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than in the ordinary course of business or as contemplated by this Agreement (i) amend, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an Affiliate of the Company;
(s) voluntarily terminate, amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;or
(t) conduct any reduction-in-force of employees agree, resolve or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Act; or
(u) authorize, commit or agree to take do any of the foregoing actionsforegoing. Notwithstanding anything set forth Nothing contained in this Agreement shall give Parent or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shallSubsidiary, directly or indirectly, exercise any form of the right to control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of direct the Company’s or any Subsidiary’s employeesof its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, suppliersthe Company and all of its Subsidiaries shall exercise, customers and other individuals having business dealings consistent with the Company or terms of this Agreement, complete control and supervision over its and any Subsidiary of its Subsidiaries’ operations. Notwithstanding the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, foregoing and anything to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described contrary in this sentenceAgreement, this Section 6.01 shall not apply with respect to the sale or distribution of Non-Core Real Estate under Section 2.10.
Appears in 2 contracts
Samples: Agreement and Plan of Merger (Victor Technologies Group, Inc.), Merger Agreement (Colfax CORP)
Conduct of the Company. The Company covenants and agrees that, except for matters (i) expressly permitted or expressly contemplated by this Agreement, (ii) set forth on Part 6.01 of the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken with the prior written consent of Parent (which shall not be unreasonably withheld, conditioned or delayed), (v) required by Applicable Law or the rules and regulations of Nasdaq, from From the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereofTime, the Company (A) shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) to, conduct its business in the ordinary course in all material respects, substantially consistent with past practicepractice and in material compliance with Applicable Law, and use its commercially reasonable efforts to (i) preserve intact its present business organization, (2ii) to maintain in effect all of the extent consistent with the foregoing clause Company Permits, (1), maintain its business as a going concern and (3iii) keep available the services of its current directors, officers and key employees and to preserve the goodwill of and (iv) maintain satisfactory relationships with those Persons its customers, suppliers and others having material business relationships with it. Without limiting the generality of the foregoing, except as expressly contemplated by this Agreement, without the prior written consent of Parent (not to be unreasonably withheld, conditioned or delayed) as required by Applicable Law, or as set forth in Section 6.1 of the Company and its SubsidiariesDisclosure Schedule, and (B) the Company shall not, and shall cause each not permit any of its Subsidiaries not to:
(a) amend the Company’s certificate its Certificate of incorporation or bylawsIncorporation, or amend any certificate of incorporation or bylaws, Bylaws or other comparable charter similar organizational documents (whether by merger, consolidation or organizational documents, of the Company’s Subsidiariesotherwise);
(b) other than with respect to a direct or indirect wholly owned Subsidiary of the Company, (i) establish a record date for, declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock, property or otherwise) in respect of, or enter into any agreement with respect to the voting of, any capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), (ii) split, reverse split, combine, subdivide combine or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) of the Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c), issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries or declare, set aside or pay any dividend or other distribution (whether in cash, stock or securities convertible property or exchangeable thereforany combination thereof) in respect of the capital stock of the Company or its Subsidiaries (other than any dividends payable to the Company or another Company Subsidiary), or (iv) purchaseredeem, redeem repurchase or otherwise acquire or offer to purchaseredeem, redeem repurchase, or acquire otherwise acquire, directly or indirectly, any Company Securities or any Company Subsidiary Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPP;
(c) (i) issue, deliver, deliver or sell, grantor authorize the issuance, announcedelivery or sale of, pledge, transfer, subject to any Lien, otherwise encumber or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock pursuant to (A) in connection with the terms Company ESPP in the ordinary course and (B) upon the vesting or exercise of any Company Equity Awards RSUs and Company Options, respectively, that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement or (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to that are issued after the date hereof in compliance with the terms of existing employment or other compensation agreements or arrangements this Agreement, in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent each case in accordance with their respective terms or (ii) the issuance amend any term of shares any Company Security or any Company Subsidiary Security (in each case, whether by merger, consolidation or otherwise), including, without limitation, any discretionary acceleration of Company Common Stock under the ESPP and vesting of any stock options, restricted stock awards, restricted stock units or other equity awards issued pursuant to the terms thereof and Section 2.06 of this Agreement Company Equity Plans or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Companyotherwise;
(d) mergegrant any stock options, consolidate orrestricted stock awards, restricted stock units or other equity awards pursuant to the Company Equity Plans or otherwise, except for the issuance of up to an aggregate of 50,000 stock options to new employees (i) hired pursuant to requisitions open as of the date hereof and disclosed to Parent and (ii) in the ordinary course of business, with exercise prices not less than the then-current market price of Company Stock; provided, however, that the Company must notify Parent of any such awards and provide Parent with the report after such awards have been approved by the Company’s Compensation Committee with respect to the granting of such awards;
(e) (i) acquire (including by merger, consolidation, or acquisition of stock or assets) or make any loans, advances or capital contributions to, or investments in, any Equity Interests or equity securities in any Person or any assets, loans or debt securities thereof, other than in wholly-owned Subsidiaries of the Company or in the ordinary course of business substantially consistent with past practice, enter into strategic alliance (ii) sell, lease or similar legal partnership otherwise dispose of (whether by merger, consolidation, or acquisition of stock or assets or otherwise), or create or incur any Lien (other than Permitted Liens) on, any business organization or division thereof or any assets or securities, other than sales or dispositions of inventory and other assets in the ordinary course of business consistent with past practice or pursuant to existing Contracts, (iii) abandon, fail to maintain or allow to expire (except in each case, where the Company has in its reasonable business discretion determined that such Intellectual Property has no substantive value to the Company), or sell or exclusively license to any Person, file a voluntary petition any Intellectual Property of the Company or any of its Subsidiaries or (iv) authorize any new capital expenditures, except (X) as contemplated by the capital expenditure budget last delivered or made available to Parent by the Company or (Y) not in excess of $100,000 in the aggregate; provided, however, that for bankruptcy purposes of clarity, notwithstanding anything to the contrary set forth in this Agreement, neither the Company entering into that certain License Agreement attached hereto as Exhibit D, nor the Company performing thereunder, shall constitute any breach of this Agreement or liquidationany representation, dissolvewarranty or covenant contained herein; provided, liquidatefurther, restructure that nothing herein shall be deemed to affect the Company’s obligation to execute the License Agreement in connection with the Closing.
(f) adopt or recapitalize or adopt enter into a plan or agreement of, or resolutions providing for or authorizing, of complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than the Merger or among wholly-owned Subsidiaries);
(eg) create, incur, assume or otherwise become liable with respect to any Indebtedness exceeding $150,000, or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the Indebtedness of any other Person;
(i) increase the salary, wages, benefits, bonuses renew or enter into any Contract or other cash compensation payable arrangement that limits or to become payable to otherwise restricts the Company, any of its Subsidiaries or any of their respective Affiliates or any successor thereto or that could, after the Effective Time, limit or restrict the Final Surviving Entity, any of its Subsidiaries, Parent or any of their respective Affiliates, from engaging or competing in any line of business, in any location or with any Person, (ii) enter into any new line of business outside of its existing business segments, (iii) enter into purchase orders other than purchase orders for the manufacturing, assembly, purchase or sale of inventory in the ordinary course of business (provided that (X) this exception shall not apply to purchase orders for wafers in excess of $100,000 in the aggregate, which shall require Parent’s employeesconsent (provided Parent shall approve or decline such wafer purchase orders within 24 hours of notice, officers, directors or Independent Contractors, except for increases (A) required such approval not to be made pursuant unreasonably withheld, conditioned or delayed) and (Y) any other purchase orders in an amount exceeding $100,000 individually shall not require consent, but shall be disclosed in a weekly report to be delivered by the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereofCompany to Parent), (Biv) required under amend, modify or terminate (other than material amendments to purchase orders not related to any Company Employee Plan pursuant to the financial terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Lawtherein) any Material Contract, (Cv) made other than sales of products and nonexclusive licenses granted to customers and purchases of product from suppliers in the ordinary course of business and substantially consistent with past practice, enter into any Material Contract or (Dvi) in connection with changes to otherwise waive, release or assign any material rights, claims or benefits as part of annual enrollment; provided that such changes made as part the Company or any of annual enrollment are made in the ordinary course of businessits Subsidiaries;
(i) (i) enter into any out-bound exclusive license, and distribution, marketing or sales Contracts, (ii) sell, transfer or otherwise dispose of any Company Intellectual Property other than as required by the terms sales of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy its products and other non-exclusive licenses that would be a Company Employee Plan if in effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets are in the ordinary course of business and in amounts substantially consistent with past practicepractices or (iii) grant “most favored nation” or similar pricing to any Person;
(j) pay, discharge, settle or satisfy any claims, liabilities or obligations (absolute, accrued, contingent or otherwise) to Third Parties, other than (i) sellperformance of contractual obligations in accordance with their terms, assign(ii) payment, leasedischarge, license, pledge, transfer, abandon, subject to any Lien, permit to lapse settlement or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregate, except satisfaction in the ordinary course of business consistent with past practice or (iii) payment, discharge, settlement or satisfaction in accordance with their terms, of claims, liabilities or obligations that have been (A) disclosed in the most recent Company Financial Statements if required by GAAP or (B) incurred since the date of the most recent Company Financial Statements in the ordinary course of business consistent with past practice or in connection with the transactions contemplated by this Agreement;
(k) settle, or offer or propose to settle, (i) any litigation, investigation, arbitration, proceeding or other similar action involving or against the Company or any of its Subsidiaries, (ii) any stockholder litigation or dispute against the Company or any of its officers or directors or (iii) any litigation, arbitration, proceeding or dispute that relates to the transactions contemplated hereby, or commence any litigation, investigation, arbitration or proceeding against any Person, other than pursuing litigation or settling litigation necessary to pursue the Company’s or its Subsidiaries’ business substantially consistent with past practicerights under this Agreement;
(jl) agree abandon or dedicate to the public domain any exclusivityof the Company Registered IP;
(m) fail to keep in force insurance policies or replacement or revised provisions regarding insurance coverage with respect to the assets, non-competition products, operations and activities of the Company and its Subsidiaries substantially equal to those currently in effect;
(n) (i) grant or increase any severance or termination pay to (or amend any existing arrangement with) any director or officer of the Company or any of its Subsidiaries, (ii) increase benefits payable under any existing severance or termination pay policies or employment agreements, (iii) enter into any employment, deferred compensation or other similar provision agreement (or covenant limiting the ability amend any such existing agreement) with any director, officer or employee of the Company or any of its Subsidiaries to compete or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company Company’s standard employment agreements and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Companyform offer letters), (iv) make terminate, establish, adopt or amend (except as reasonably necessary to comply with Applicable Law) any loanCompany Benefit Plan covering any director, advance officer or capital contribution to employee of the Company or any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, its Subsidiaries or (v) amendexcept as provided for by any existing Company Benefit Plan, modify or waive any provision of the Existing Credit Agreement increase compensation, bonus (other than discretionary bonuses up to waive an aggregate amount of $50,000) or otherwise cure other benefits payable to any “Default” director, officer or “Event employee of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification the Company or waiver)any of its Subsidiaries, or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance pay any Indebtedness arising under the Existing Credit Agreementsimilar benefits;
(mo) makechange the Company’s methods of accounting, except as required by concurrent changes in GAAP;
(p) make or change or revoke rescind any material Tax election, change any annual Tax accounting period, adopt or change any accounting method for material Taxes, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practiceReturn, enter into any “closing agreement” within the meaning agreement related to a material amount of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material TaxTaxes, settle any a material Tax Proceedingclaim or assessment relating to the Company or any of its Subsidiaries, surrender any right to claim a refund of a material Tax refund, offset or other reduction in Tax liability, amount of Taxes or consent to any extension or waiver of the limitations limitation period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect relating to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;
(o) institute, settle or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of businessSubsidiaries;
(q) fail to maintain in all material respects terminate the employment of any Insurance Policiesof the individuals, or amend or rescind or otherwise materially alter, the employment arrangements of the individuals, set forth on Schedule A attached hereto;
(r) other than in the ordinary course of business or as contemplated by this Agreement (i) amend, modify, renew or terminate, or grant take any release or waiver under, action which would reasonably be expected to cause any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an Affiliate conditions of the CompanyMerger to not be satisfied;
(s) voluntarily terminatemake any representations or issue any communications to current or former employees, amend independent contractors or fail to renew directors that are inconsistent in any material respect with this Agreement or preserve the transactions contemplated thereby, including any Company Communications License as set forth on Part 6.01(s) representations regarding offers of employment from Parent, any Subsidiary of Parent, or the Company Disclosure Schedule;
Final Surviving Entity; or (t) conduct any reduction-in-force of employees agree, resolve or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Act; or
(u) authorize, commit or agree to take do any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentenceforegoing.
Appears in 2 contracts
Samples: Merger Agreement (Atheros Communications Inc), Merger Agreement (Intellon Corp)
Conduct of the Company. (a) The Company covenants and agrees that, during the period from the date hereof through the earlier of the Effective Time or the date of termination of this Agreement in accordance with the terms hereof, except for matters (i) expressly permitted or expressly contemplated by this Agreement, (ii) set forth on Part 6.01 of the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken with the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed), (vii) set forth in Section 6.1 of the Company Disclosure Schedule, (iii) as expressly required by Applicable this Agreement, or (iv) as may be required to facilitate compliance with any Law or the rules and regulations of Nasdaq, from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereofOrder, the Company (A) shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) to, conduct its business in the ordinary course in all material respectsrespects and, substantially consistent with past practice, (2) to the extent consistent with the foregoing clause (1)therewith, maintain its business as a going concern and (3) keep available the services of its current officers and key employees and to preserve the goodwill of and maintain satisfactory relationships with those Persons having material business relationships with the Company and its Subsidiaries, and (B) shall notshall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to preserve substantially intact its and its Subsidiaries’ business organization, to keep available the services of its and its Subsidiaries’ current officers and employees, to preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees, and other Persons having business relationships with it. The Company shall prepare and file, or cause to be prepared and filed, any Tax Return required to be filed by or with respect to the Acquired Companies on or before the Closing Date (“Company Tax Returns”), and pay any liability for Taxes reflected thereon. The Company shall prepare all Company Tax Returns, in accordance with applicable Law and, unless otherwise required by applicable Law, consistent with past practice.
(b) Between the date of this Agreement and the earlier of the Acceptance Time and the date of termination of this Agreement, except for matters (i) undertaken with the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed), (ii) as set forth in Section 6.1 of the Company Disclosure Schedule, (iii) as expressly required by this Agreement, (iv) as may be necessary to carry out the Transactions, or (v) as may be required to facilitate compliance with any Law or Order, the Company shall not, nor shall it permit any of its Subsidiaries to, do any of the following:
(ai) amend the Company’s certificate Company Certificate of incorporation Incorporation or bylawsthe Company By-laws, or amend any certificate of incorporation or bylaws, or other comparable charter or organizational documents, Organizational Documents of the Company’s Subsidiaries;
(bii) other than with respect to a direct or indirect wholly owned Subsidiary of the Company, (iA) establish a record date for, declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock, property property, or otherwise) in respect of, or enter into any agreement with respect to the voting of, any capital stock of any Acquired Company, other than dividends and distributions by a direct or indirect wholly owned Subsidiary of the Company or any of to its Subsidiaries (or securities convertible or exchangeable therefor)parent, (iiB) split, reverse split, combine, subdivide combine or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) of the Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c), issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor)Acquired Companies, or (ivC) purchase, redeem redeem, or otherwise acquire acquire, or offer to purchase, redeem redeem, or acquire otherwise acquire, any Company Securitiessecurities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Company, in each case, Company in satisfaction by holders of Company Equity Compensatory Awards of the applicable exercise price or withholding taxes or in accordance Taxes with the terms of the ESPPrespect to such Company Compensatory Award;
(ciii) (A) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber Encumbrance (other than transfer restrictions arising under applicable Law) or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company Securitiessecurities, other than (ix) the issuance of shares of Company Common Stock pursuant to (A) upon the terms exercise, conversion or settlement of the Company Equity Compensatory Awards that are outstanding on the date hereofhereof or issued in compliance with the terms of this Agreement, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement or Compensatory Awards, and (By) grants or awards of Company Securities or securities (including Company Equity Awards required to be Compensatory Awards) made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company;
(d) merge, consolidate or, other than in the ordinary course of business substantially consistent with past practice, enter into strategic alliance including in connection with new hires, performance recognition and promotions, in aggregate amount of up to $50,000, or similar legal partnership with (B) amend any Personterm of any security of the Acquired Companies (in each case, file a voluntary petition for bankruptcy whether by merger, consolidation, or liquidation, dissolve, liquidate, restructure or recapitalize or otherwise);
(iv) adopt a plan or agreement of, or resolutions providing for or authorizing, of complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization recapitalization, or other reorganization reorganization, both with respect to the Acquired Companies;
(v) except as set forth on Section 6.1(b)(v) of the Company Disclosure Schedule, (i) establish, adopt, enter into, terminate or materially amend any Company Benefit Plan (or any plan, program, arrangement or agreement that would be a Company Benefit Plan if it were in existence on the date hereof), (ii) amend or waive any of its Subsidiaries;
rights under, or accelerate the vesting under, any provision of any Company Benefit Plan (eor any plan, program, arrangement or agreement that would be a Company Benefit Plan if it were in existence on the date hereof), (iii) grant or increase any severance, retention or termination pay to any current or former employee, officer, director or independent contractor of any Acquired Company, (iiv) unless required to be made pursuant to the terms of Company Benefit Plans in effect as of the date hereof, grant or increase the salary, wages, benefits, bonuses bonuses, or other cash compensation payable or to become payable to the Company’s current or former directors, officers or employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements Company Benefit Plans in effect as of the date hereof, (Bv) required under grant any Company Employee Plan pursuant to equity, equity-based, or other incentive awards to, or discretionarily accelerate the terms in effect as vesting or payment of any such awards held by, any current or former employee, officer, director or independent contractor of any of the date hereof or Collective Bargaining Agreement or under Applicable LawAcquired Companies, (Cvi) made in hire any employees (at the ordinary course level of business and substantially consistent with past practiceVice President or higher), (vii) terminate the employment of any employees at the level of Vice President or higher other than for cause, or (Dviii) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan employment, consulting, change in control, severance or plan, agreement, arrangement, similar agreement with the Company’s officers (at the level of Vice President or policy that would be a Company Employee Plan if in effect on the date hereofhigher);
(fvi) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property assets or capital stock of, or make any loans, advances or capital contribution to of any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate), other than one (A) the purchase of materials from suppliers or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets vendors in the ordinary course of business and in amounts substantially consistent with past practicepractice or (B) one or more acquisitions in the ordinary course of business that, individually or in the aggregate, involve a purchase price of not more than $100,000;
(ivii) sell, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse Encumbrance or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value in excess material assets or material properties except (A) pursuant to Contracts or commitments existing as of $500,000 individually the date hereof, (B) non-exclusive licenses of Intellectual Property assets to its customers, contractors, partners or $5,000,000 in the aggregate, except suppliers in the ordinary course of the Company’s business, or its Subsidiaries’ business substantially consistent with past practice(C) Permitted Encumbrances;
(jviii) agree to any exclusivity, non-competition or similar provision or covenant limiting the ability of the Company or any of its Subsidiaries to compete or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X promulgated under the Securities Exchange Act;
(ix) (A) incur or assume any indebtedness for borrowed money, or (iiiB) by assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for indebtedness for borrowed money of any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization)other Person;
(lx) incur any capital expenditures other than (i) consistent with the Company’s capital expenditure budget previously made available to Parent, or (ii) in excess of $100,000 in the aggregate;
(xi) institute or settle any Legal Proceeding involving monetary damages in excess of $100,000 individually or $250,000 in the aggregate; provided that the settlement, release, waiver or compromise of any Legal Proceeding or claim brought by the stockholders of the Company against the Company and/or its directors or officers relating to the Transactions or a breach of this Agreement or any other agreements contemplated hereby shall be subject to Section 3.8 or Section 6.16, as applicable;
(xii) commence any preclinical or clinical development, study, trial or test with respect to any products or product candidates;
(xiii) fail to file, report, complete or otherwise make any submission required under Healthcare Laws;
(xiv) adopt, modify, or terminate any collective bargaining or other agreement of any type with a Union, in each case whether written or oral;
(xv) enter into or amend or modify in any material respect, or consent to the termination of (other than at its stated expiry date), any Company Material Contract, any Contract with respect to any joint venture, strategic partnership or alliance, or any agreement concerning Leased Real Property or any other Contract that, if in effect as of the date hereof would constitute a Material Contract hereunder, in each case, except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and consistent with past practice;
(xvi) except for intercompany loansas otherwise required by Law, guarantees, advance (A) fail to file any income or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries other material Tax Return of the CompanyAcquired Companies when due (after giving effect to any properly obtained extensions of time in which to make such filings), (iB) incur, issue, make or otherwise become liable for change any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify material Tax election in a manner which is materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practice, enter into or change any “closing agreement” within the meaning Tax accounting period or method of Section 7121 Tax accounting of the Code Acquired Companies; (C) amend any income or similar provision of stateother material Tax Return, local (D) settle or non-U.S. law) in respect of any material Tax, settle compromise any material Tax Proceeding, surrender any right audit or Tax proceeding relating to claim a material Tax refund, offset the Acquired Companies; (E) change the U.S. federal income tax classification; or other reduction in Tax liability, or consent (F) agree to any an extension or waiver of the statute of limitations period applicable to in respect of any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;
Acquired Companies (o) institute, settle or agree to settle any Proceedings, other than pursuant to (ix) the settlement extensions of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree time to settle any Proceeding which settlement involves file a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than Tax Return obtained in the ordinary course of business or as contemplated by this Agreement (iy) amendan audit of Taxes to defend the Acquired Company against the assessment or collection of a Tax);
(xvii) adopt or implement any stockholder rights plan or similar arrangement;
(xviii) engage in any transaction with, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreementagreement, arrangement or (ii) renew or enter into understanding with, any Contract with an Affiliate of the Company;
(s) voluntarily terminate, amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case Person covered by Item 404 of Regulation S-K promulgated by the SEC that could implicate would be required to be disclosed pursuant to Item 404 of Regulation S-K promulgated by the WARN ActSEC; or
(uxix) authorize, commit or agree to take any of the foregoing actions. Notwithstanding anything set forth the foregoing, nothing contained in this Agreement shall give to Parent or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shallSub, directly or indirectly, exercise any form of rights to control over or direct the Company, any of its subsidiaries, or any operations of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, Acquired Companies prior to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentenceEffective Time.
Appears in 2 contracts
Samples: Merger Agreement (Harmony Biosciences Holdings, Inc.), Merger Agreement (Zynerba Pharmaceuticals, Inc.)
Conduct of the Company. The Company covenants and agrees that, except for matters Except as (i) expressly permitted or is expressly contemplated by this Agreement, (ii) may be required by Applicable Law, (iii) may be agreed in advance in writing with Parent (which consent may not be unreasonably delayed), or (iv) set forth on Part in Section 6.01 of the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken with the prior written consent of Parent (which shall not be unreasonably withheld, conditioned or delayed), (v) required by Applicable Law or the rules and regulations of Nasdaq, from the date hereof until the earlier Effective Time, each of the Effective Time Company and the termination of this Agreement in accordance with Article 8 hereof, the Company (A) shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) shall conduct its business in the ordinary course and, to the extent consistent therewith, shall use commercially reasonable efforts to preserve intact its business organizations and relationships with customers, suppliers, distributors, creditors, lessors, unions, employees and business associates in all material respects; provided that, substantially consistent with past practice, (2) to the extent consistent with the foregoing clause (1), maintain its business as a going concern and (3) keep available the services of its current officers and key employees and to preserve the goodwill of and maintain satisfactory relationships with those Persons having material business relationships with the Company and its Subsidiaries, and (B) shall not, and shall cause each of its Subsidiaries not to:
(a) amend the Company’s certificate of incorporation or bylaws, or amend any certificate of incorporation or bylaws, or other comparable charter or organizational documents, of the Company’s Subsidiaries;
(b) other than with respect to a direct or indirect wholly owned Subsidiary of the Company, (i) establish a record date for, declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock, property or otherwise) in respect of, or enter into any agreement with respect to the voting of, any capital stock no action of the Company or any of its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 6.01 shall be deemed a breach of this sentence unless such action would constitute a breach of such other provision. Without limiting the generality of the foregoing, subject to the exceptions set forth in clauses (i) through (iv) above, from the date hereof until the Effective Time, the Company shall not, and shall not permit any of its Subsidiaries to:
(a) amend its Memorandum of Association or Articles of Association or comparable organizational documents;
(b) (i) (A) declare, set aside or pay any dividend or other distribution payable in cash, stock or property in respect of the share capital of the Company, except that a wholly owned Subsidiary may declare and pay a dividend or make advances to the Company, or (B) redeem, repurchase or otherwise acquire any of its share capital or other securities, except (x) by a wholly owned Subsidiary from the Company, or (y) from former employees, directors and consultants in accordance with currently effective agreements providing for the repurchase of shares in connection with any termination of service to the Company or any of its Subsidiaries, in accordance with the Companies Law, (ii) except for transactions among the Company and/or its Subsidiaries, issue, sell, pledge, dispose of or encumber any share capital, or securities convertible into or exchangeable thereforfor any share capital, other than Company Ordinary Shares issued upon the exercise of Company Options outstanding on the date hereof or granted in accordance with the Company Option Plans in the ordinary course of business, or (iii) split, combine or reclassify any of its share capital;
(c) merge or consolidate with, or acquire all or substantially all of the assets of any business or any corporation, partnership, joint venture, association or other business organization or division thereof;
(d) sell, lease, license or otherwise dispose of any material assets or property, except (i) pursuant to any Company Material Contract (that has been made available to Parent prior to the date hereof), or (ii) the sale of inventory in the ordinary course of business consistent with past practice;
(e) (i) incur, assume, guarantee or modify any indebtedness for borrowed money, or (ii) create, incur or suffer to exist any Lien upon any of its assets or properties (other than Permitted Liens), except (x) in the ordinary course of business consistent with past practice, (y) pursuant to any Company Material Contract (that has been made available to Parent prior to the date hereof), or (z) in respect of indebtedness existing solely between the Company and/or any of its Subsidiaries;
(f) transfer or license to any Third Party or otherwise extend, amend or modify any rights to any Company Owned IP, other than non-exclusive licenses to the extent such licenses are an integral part of the sale of inventory in the ordinary course of business or pursuant to any Company Material Contract (that has been made available to Parent prior to the date hereof);
(g) except as required to comply with the provisions of any Employee Plan of the Company (that has been made available to Parent prior to the date hereof), (i) increase the amount of compensation, bonus or other benefits payable to any director, officer or employee of the Company or its Subsidiaries, other than in the ordinary course of business consistent with past practice with respect to employees that do not hold a Vice President or more senior position at the Company or any Subsidiary (including, for this purpose, the Company’s annual salary, bonus and equity compensation review process) or as required to comply with the provisions of any Employee Plan of the Company (that has been disclosed on Section 4.17 of the Company Disclosure Schedule and made available to Parent prior to the date hereof), (ii) split, reverse split, combine, subdivide grant any severance or reclassify termination pay or otherwise amend the terms of any capital stock benefits (or securities convertible increase the amount of such pay or exchangeable thereforbenefits, or extend the notice periods for termination) to any director, officer or employee of the Company or any of its Subsidiaries, (iii) except other than as expressly provided in Section 6.01(c), issue or authorize required to comply with the issuance provisions of any other securities in respect of, in lieu of or in substitution for, shares of capital stock Employee Plan of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), or (iv) purchase, redeem or otherwise acquire or offer to purchase, redeem or acquire any Company Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPP;
(c) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber or dispose of any equity interests that has been disclosed on Section 4.17 of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company Securities, other than (i) the issuance of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement or (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been Disclosure Schedule and made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant prior to the terms thereof and Section 2.06 of this Agreement or date hereof), (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company enter into any new employment agreement (or another wholly owned Subsidiary of the Company;
amend any such existing agreement) (dx) mergewith any executive officer, consolidate oror (y) with any other employee, other than in the ordinary course of business substantially consistent with past practice, (iv) enter into strategic alliance or similar legal partnership amend in any material respect any collective bargaining agreement or other contract or understanding with any Person, file a voluntary petition for bankruptcy labor union or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement oforganization, or resolutions providing (v) make any loan or advance to any director, officer or employee of the Company or any of its Subsidiaries, except for or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization travel advances in the ordinary course of business consistent with past practice to employees of the Company or any of its Subsidiaries;
(eh) (i) increase the salary, wages, benefits, bonuses change any method of accounting or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractorsaccounting practices, except for increases (A) required to be made pursuant to the terms of existing employment any such change which is not material or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as which is required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practiceGAAP;
(i) sellmake or change any material Tax election, assignannual tax accounting period or method of tax accounting, leasefile any amended Tax Returns with respect to a material amount of Taxes, license, pledge, transfer, abandon, subject to make any Lien, permit to lapse or otherwise dispose claim for refunds of any assets, propertiesa material amount of Taxes, or Company Intellectual Propertysettle or compromise any material Tax claim, in each case having a value in excess of $500,000 individually audit or $5,000,000 in the aggregate, except in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice;
(j) agree to any exclusivity, non-competition or similar provision or covenant limiting the ability of the Company or any of its Subsidiaries to compete or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, exceptassessment, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;
(o) institute, settle or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than in the ordinary course of business or as contemplated by this Agreement (i) amend, modify, renew or terminateconsistent with past practice, or grant make any release application for, negotiate or waiver underreceive a Tax ruling or arrangement (other than routine correspondence with the Taxing Authorities) with the National Office of the Israeli Taxing Authority, or make any Material Contract application for, negotiate or receive a material Tax ruling or material arrangement (excluding other than routine correspondence with the expiration Taxing Authorities) with any local office of the Israeli Taxing Authority, whether or not in connection with the Merger or Arrangement, on the Company’s own behalf or on behalf of any Material Contract of its shareholders in accordance connection with its terms) the Merger or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an Affiliate of the Company;
(s) voluntarily terminate, amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffsArrangement, in each case that could implicate the WARN Actcase, except as explicitly contemplated in this Agreement; or
(uj) authorize, agree or commit or agree to take do any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentenceforegoing.
Appears in 2 contracts
Samples: Merger Agreement (Microsemi Corp), Merger Agreement (Powerdsine LTD)
Conduct of the Company. The Company covenants and agrees that, except for matters (i) expressly permitted or expressly contemplated by this Agreement, (ii) set forth on Part 6.01 of the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken with the prior written consent of Parent (which shall not be unreasonably withheld, conditioned or delayed), (v) required by Applicable Law or the rules and regulations of Nasdaq, from From the date hereof until the earlier of to the Effective Time and the termination of this Agreement in accordance with Article 8 hereofTime, the Company (A) shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) conduct carry on its business in the ordinary course in all material respects, substantially consistent with past practicepractice and use reasonable efforts to preserve intact its current business organization, (2) to the extent consistent with the foregoing clause (1), maintain its business as a going concern and (3) keep available the services of its current officers and key employees and to preserve the goodwill of and maintain satisfactory its relationships with those Persons customers, suppliers, licensors, licensees and others having material significant business relationships dealings with it. Without limiting the generality of the foregoing, from the date hereof to the Effective Time, the Company and its Subsidiaries, and (B) shall not, and shall cause each not without the prior written consent of its Subsidiaries not toPurchaser:
(a) amend the Company’s certificate of incorporation or bylaws, or amend any certificate of incorporation or bylaws, or other comparable charter or organizational documents, of the Company’s Subsidiaries;
(b) other than with respect to a direct or indirect wholly owned Subsidiary of the Company, (i) establish a record date for, declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock, property or otherwise) in respect of, or enter into any agreement with respect to the voting of, any capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor)capital stock, (ii) split, reverse split, combine, subdivide combine or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) of the Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c), capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution forfor Shares of its capital stock, shares of or (iii) except as expressly provided in Section 7.3(i) hereof, purchase, redeem or otherwise acquire any Shares or any capital stock of the Company or any of its Subsidiaries (Subsidiary or any other securities convertible thereof or exchangeable therefor)any rights, warrants or (iv) purchase, redeem or otherwise acquire or offer options to purchase, redeem or acquire any Company Securitiessuch shares or other securities;
(b) change its practices, except for policies or procedures with respect to the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards timing of the applicable withholding taxes payment of accounts payable or in accordance with the terms collection of the ESPPaccounts receivable;
(c) except as provided in Section 7.3(i) hereof issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, pledge or otherwise encumber or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company Securities, other than (i) the issuance of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereofits capital stock, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement or (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or any other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company;
(d) merge, consolidate or, other than in the ordinary course of business substantially consistent with past practice, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company voting securities or any of its Subsidiaries;
(e) (i) increase the salary, wages, benefits, bonuses or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter securities convertible into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
(i) sell, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregate, except in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice;
(j) agree to any exclusivity, non-competition or similar provision or covenant limiting the ability of the Company or any of its Subsidiaries to compete or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;
(o) institute, settle or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than in the ordinary course of business or as contemplated by this Agreement (i) amend, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an Affiliate of the Company;
(s) voluntarily terminate, amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Act; or
(u) authorize, commit or agree to take any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permitsrights, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In additionwarrants or options to acquire, the Company and its Subsidiaries may take any such further commercially reasonable actions necessary to (x) respond to emergencies shares, voting securities or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentence.convertible securities;
Appears in 2 contracts
Samples: Merger Agreement (MTL Inc), Merger Agreement (MTL Inc)
Conduct of the Company. The From the date of this Agreement until the Effective Time, the Company covenants shall, and agrees thatshall cause its Subsidiaries to, conduct their business in the ordinary course substantially consistent with past practice and in a manner not representing a new strategic direction for the Company and its Subsidiaries and shall, and shall cause its Subsidiaries to, use their commercially reasonable best efforts to preserve intact their business organizations and relationships with third parties. Without limiting the generality of the foregoing, except for matters (i) expressly permitted or expressly contemplated by this Agreement, (ii) set forth on Part 6.01 of the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken with the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned withheld or delayed), (v) required or as contemplated by Applicable Law this Agreement or as set forth in the rules and regulations of NasdaqCompany Disclosure Letter, from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereof, the Company (A) shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) conduct its business in the ordinary course in all material respects, substantially consistent with past practice, (2) to the extent consistent with the foregoing clause (1), maintain its business as a going concern and (3) keep available the services of its current officers and key employees and to preserve the goodwill of and maintain satisfactory relationships with those Persons having material business relationships with the Company and its Subsidiaries, and (B) shall not, and shall cause each of its Subsidiaries not toTime:
(a) amend the Company’s Company will not, and will not permit any of its Subsidiaries to, adopt or propose any change in its certificate of incorporation or bylawsby-laws, or amend any certificate amend, modify or terminate the Company Rights Agreement, except that the Company shall be permitted to adopt and propose the amendment to its Certificate of incorporation or bylawsIncorporation increasing the number of its authorized shares of Common Stock as set forth in the preliminary Proxy Statement, or other comparable charter or organizational documentsfiled with the SEC on April 9, of 2002, for the Company’s Subsidiaries's 2002 annual meeting of stockholders and except to the extent required by Section 6.15(a) and shall be permitted to make any amendments to the Rights Agreement that may be necessary in order to ensure that is representations in Section 5.1(p) are true and correct and to provide that the Rights issued under such Rights Agreement terminate immediately prior to the Effective Time;
(b) other than with respect to a direct or indirect wholly owned Subsidiary of the Company, (i) establish a record date for, declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock, property or otherwise) in respect of, or enter into any agreement with respect to the voting of, any capital stock of the Company or will not, and will not permit any of its Subsidiaries (or securities convertible or exchangeable therefor), (ii) split, reverse split, combine, subdivide or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) of the Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c), issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), or (iv) purchase, redeem or otherwise acquire or offer to purchase, redeem or acquire any Company Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPP;
(c) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company Securities, other than (i) the issuance of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement or (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company;
(d) mergeto, consolidate or, other than in the ordinary course of business substantially consistent with past practice, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, of complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other material reorganization of the Company or any of its Subsidiaries (other than a merger or consolidation between its wholly owned Subsidiaries, and immaterial recapitalizations of Subsidiaries);
(ec) the Company will not, and will not permit any Subsidiary of the Company to, issue, sell, transfer, pledge, dispose of or encumber any shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any class or series of the Company or its Subsidiaries or any Company Voting Debt other than (i) increase issuances pursuant to the salaryexercise of convertible securities or warrants outstanding on the date hereof or issuances pursuant to stock based awards or options that are outstanding on the date hereof and are reflected in Section 5.1(b)(i) or are granted after the date hereof in accordance with clause 6.1(c)(ii); (ii) additional options to acquire Shares granted under the terms of any Company Stock Option Plan as in effect on the date hereof (x) in amounts and in accordance with the terms described in the Company's stock option grant guidelines currently in effect (a copy of which has been provided to Parent) to the extent such guidelines are applicable to such grant, wagesincluding without limitation the vesting schedule set forth therein and the requirement that such stock options have an exercise or purchase price at least equal to the fair market value of the Shares of the date of grant and shall not accelerate, benefitsor become subject to acceleration, bonuses directly or other cash compensation payable indirectly, as a result of the approval or consummation of the Merger and/or termination of employment after the Merger or (y) to become payable the extent such guidelines are not so applicable or are not made in accordance with such guidelines, as may be unanimously approved by the Compensation Committee of the Board of Directors of the Company, provided that such stock options shall have an exercise or purchase price at least equal to the fair market value of the Shares on the date of grant, provided that the aggregate number of Shares issued (which shall include the number of Shares issuable upon the exercise of such options) pursuant to this clause 6.1(c)(ii) following the date of this Agreement shall in no event exceed 3.5% of the total number of Shares outstanding on the date hereof (such 3.5% to be computed by disregarding any such options to the extent that they expire unexercised); (iii) issuance of Shares or rights to purchase Shares pursuant to the Company’s employees's 1995 Employee Stock Purchase Plan, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as amended as of the date hereof, and as it may be further amended as contemplated by Section 6.12(c); (Biv) transfers or issuances of shares of any Subsidiary of the Company to the Company or any of its wholly-owned Subsidiaries; and (v) where required by applicable law, issuances of director qualifying shares in jurisdictions other than the United States;
(d) the Company will not, and will not permit any Subsidiary of the Company to, (i) split, combine, subdivide or reclassify its outstanding shares of capital stock, or (ii) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock other than dividends paid by any wholly-owned Subsidiary of the Company to the Company or any wholly-owned Subsidiary of the Company;
(e) the Company will not, and will not permit any Subsidiary of the Company to, redeem, purchase or otherwise acquire directly or indirectly any of the Company's or any Subsidiary's capital stock except purchases or redemptions of capital stock of any wholly-owned Subsidiary of the Company;
(f) the Company will not amend the terms (including the terms relating to acceleration or vesting) of any outstanding options to purchase Shares, including, but not limited to, amendments to accelerate or otherwise change the vesting or period of exercisability of options or restricted stock, or reprice options or authorize cash payments in exchange for any options granted under any of such plans;
(g) the Company Employee Plan pursuant to the terms in effect as will not, and will not permit any Subsidiary of the date hereof or Collective Bargaining Agreement or under Applicable LawCompany to, (Ci) made make or commit to make any capital expenditure except within the aggregate amount of the capital expenditure budget for 2002 heretofore furnished to Parent (the "Company 2002 Capital Expenditure Budget"), or (ii) make or commit to make any capital expenditure in 2003 or any later period in an amount that would exceed 120% of the aggregate amount of capital expenditures provided for in the Company 2002 Capital Expenditure Budget;
(h) the Company will not, and will not permit any Subsidiary of the Company to, (i) increase the compensation or benefits of any director, officer or employee, except for normal increases in the ordinary course of business and substantially consistent with past practicepractice or as required under applicable law or any existing agreement or commitment, or (Dii) enter into (or adopt) any new, or amend any existing, Compensation and Benefit Plan except for grants of stock options permitted by Section 6.1(c);
(i) the Company will not, and will not permit any of its Subsidiaries to, acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any equity interest in connection or a portion of the assets of, or by any other manner acquire any business or any Person or division thereof;
(j) the Company will not, and will not permit any of its Subsidiaries to, sell, lease, encumber (including by the grant of any option thereon) or otherwise dispose of any material assets or property (as measured with changes respect to benefits the consolidated assets of the Company and its Subsidiaries taken as part of annual enrollment; provided that such changes made as part of annual enrollment are made a whole) except pursuant to existing contracts or commitments or except in the ordinary course of businessbusiness consistent with past practice and except pursuant to non-exclusive licenses entered into in the ordinary course of business consistent with past practices;
(k) the Company will not, and will not permit any of its Subsidiaries to, (i) incur or assume any long-term or short-term debt or issue any debt securities, except for borrowings under existing lines of credit or existing financing facilities in the ordinary course of business consistent with past practice and in amounts not material to the Company and its Subsidiaries, taken as a whole; (ii) other than as required by assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding obligations of any benefits under)other person, modify except in the ordinary course of business consistent with past practice and in amounts not material to the Company and its Subsidiaries, taken as a whole and except pursuant to the Company's existing employee loan guaranty program used in connection with the relocation of key employees; (iii) make or terminate any Company Employee Plan or plan, agreement, arrangementcancel, or policy that would be a Company Employee Plan if in effect on the date hereof;
(f) hirewaive any rights with respect to, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution contributions to, or investments in, any other person (other than to wholly-owned Subsidiaries of the Company); (iv) pledge or otherwise encumber shares of capital stock of the Company or its Subsidiaries; or (v) mortgage or pledge any Person of its tangible or division thereofintangible assets or properties;
(l) the Company will not, whether in whole and will not permit any of its Subsidiaries to, pay, discharge or in part satisfy any material claims, liabilities or obligations (and whether by purchase of stockabsolute, purchase of assetsaccrued, mergerasserted or unasserted, consolidation, entrance into a joint venture contingent or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate), other than one the payment, discharge or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets satisfaction in the ordinary course of business and consistent with past practice of liabilities reflected or reserved against in amounts substantially the Company's balance sheet at March 31, 2002, or incurred subsequent to such date in the ordinary course of business consistent with past practice;
(m) the Company will not, and will not permit any of its Subsidiaries to, (i) sellenter into any license or other agreement with respect to the Intellectual Property Rights owned by the Company or (ii) enter into any consulting arrangement; provided that clauses (i) and (ii) shall not include, assignnor prevent the Company or any of its Subsidiaries from entering into, lease, any non-exclusive license, pledge, transfer, abandon, subject to any Lien, permit to lapse agreement or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregate, except consulting arrangement that is granted in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice;
(jn) agree the Company will not, and will not permit any of its Subsidiaries to, directly or indirectly, engage in any transaction (except pursuant to an already existing, and legally enforceable written agreement disclosed in the Company's Reports filed prior to the date hereof or the Company Disclosure Letter) with, or enter into any exclusivityagreement with, nonany director, officer or affiliate of the Company or any individual known to the Company to be a family member of any such person except for transactions solely between the Company or any wholly-competition owned Subsidiary of the Company and one or more wholly-owned Subsidiaries of the Company and except for payment of compensation and grants of stock options permitted by the other clauses of this Section 6.1;
(o) except for any such change which is not material or which is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any Subsidiary of the Company to, change any method of accounting or accounting practice (other than any change for tax purposes) used by it;
(p) the Company will not, and will not permit any Subsidiary of the Company to, amend, modify or otherwise change the terms of any existing customer contract to accelerate the payments due to the Company or its Subsidiaries thereunder;
(q) the Company will not, and will not permit any Subsidiary of the Company to, enter into any material joint venture, partnership or other similar arrangement;
(r) the Company will not amend or waive any provisions of any standstill or similar provision agreement;
(s) the Company will not (i) make or covenant limiting change any Tax election, (ii) settle any audit or (iii) file any amended Tax Return, in each case, that is reasonably likely to result in a Tax liability that is material to the Company and its Subsidiaries, taken as a whole;
(t) the Company will not, and will not permit any of its Subsidiaries to, enter into any agreement that limits the ability of the Company or any Subsidiary of its Subsidiaries to compete or engage in any line of business, with any Person or in any geographic areathe Company, or pursuant to which any benefit or right would be required to be given or lost as a result limit the ability of so competing or engaging, or which would have any such effect on Parent or any Subsidiary of its Affiliates Parent after the Effective Time, except, to compete in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course conduct any line of business substantially consistent or compete with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have Person in any such effect (geographic area or otherwise restrict or bind) on Parent or during any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Timeperiod;
(ku) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiarywill not, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;
(o) institute, settle or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor will not permit any of its Subsidiaries shall settle to, take any action that would reasonably be expected to prevent, materially delay or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on materially impede the Company’s business or (ii) Proceedings brought against Parent or consummation of the Merger Sub arising out of a breach or alleged breach of this Agreement except as permitted by Parent or Merger Sub;Section 6.5; and
(pv) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than in the ordinary course of business or as contemplated by this Agreement (i) amend, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an Affiliate of the Company;
(s) voluntarily terminate, amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct will not, and will not permit any reduction-in-force of employees its Subsidiaries to, agree or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Act; or
(u) authorize, commit or agree to take do any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentenceforegoing.
Appears in 2 contracts
Samples: Merger Agreement (Fair Isaac & Company Inc), Merger Agreement (HNC Software Inc/De)
Conduct of the Company. The Company covenants and agrees that(a) From the date hereof until the Effective Time, except for matters (i) expressly permitted pursuant to existing obligations disclosed in the Schedules to this Agreement or expressly in the Company SEC Reports, or except as contemplated by this Agreement, (iiA) set forth on Part 6.01 of the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken with the prior written consent of Parent (which shall not be unreasonably withheld, conditioned or delayed), (v) required by Applicable Law or the rules and regulations of Nasdaq, from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereof, the Company (A) shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) shall conduct its their business in the ordinary course in all material respects, substantially consistent with past practicepractice and shall use their best efforts to preserve intact their business organizations and relationships with third parties, (2) to the extent consistent with the foregoing clause (1)maintain their rights and franchises, maintain its business as a going concern and (3) to keep available the services of its current their present officers and key employees and to preserve the goodwill of maintain and maintain satisfactory relationships with those Persons having material business relationships with the Company keep their properties and its Subsidiariesassets in as good repair and condition as at present, ordinary wear and tear excepted and (B) shall notwithout limiting the generality of the foregoing, and shall cause each without the written consent of its Subsidiaries Buyer (which consent will not to:be unreasonably withheld or delayed):
(ai) amend the Company’s Company will not adopt or propose any change in its certificate of incorporation or bylaws, or amend any certificate of incorporation or bylaws, or other comparable charter or organizational documents, of the Company’s Subsidiaries;
(b) other than with respect to a direct or indirect wholly owned Subsidiary of the Company, (i) establish a record date for, declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock, property or otherwise) in respect of, or enter into any agreement with respect to the voting of, any capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), (ii) split, reverse split, combine, subdivide or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) of the Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c), issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), or (iv) purchase, redeem or otherwise acquire or offer to purchase, redeem or acquire any Company Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPP;
(c) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company Securities, other than (i) the issuance of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement or (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance Company will not, and will not permit any Subsidiary of shares the Company to, merge or consolidate with any other Person or acquire a material amount of Company Common Stock under assets or business of any other Person or make any capital expenditures other than as contemplated by the ESPP and pursuant Company's 1998 Budget previously delivered to the terms thereof and Section 2.06 of this Agreement or Buyer;
(iii) the issuance of equity interests of a wholly owned Company will not, and will not permit any Subsidiary of the Company to, sell, lease, license or otherwise dispose of any assets or property except (x) pursuant to the Company existing contracts or another wholly owned Subsidiary of the Company;
commitments and (dy) merge, consolidate or, other than in the ordinary course of business substantially consistent with past practice, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries;
(e) (i) increase the salary, wages, benefits, bonuses or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
(iiv) sell, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregate, except in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice;
(j) agree to any exclusivity, non-competition or similar provision or covenant limiting the ability of the Company or any of its Subsidiaries to compete or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiarywill not, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;
(o) institute, settle or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than in the ordinary course of business or as contemplated by this Agreement (i) amend, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an Affiliate of the Company;
(s) voluntarily terminate, amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Act; or
(u) authorize, commit or agree to take any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or will not permit any Subsidiary of the Company to (including x) take or agree or commit to take any COVID-19 Measures) action that would make any representation and warranty of the Company hereunder inaccurate in any respect at, or as of any time prior to, the Effective Time or (y) respond omit or agree or commit to third-party supply omit to take any action necessary to prevent any such representation or service disruptions caused by the coronavirus warranty from being inaccurate in any respect at any such time; or
(COVID-19v) pandemic; provided that the Company shallwill not, and will not permit any Subsidiary of the Company to, agree or commit to do any of the extent legally permissible foregoing.
(b) Between the date hereof and only if time permitsthe Effective Time, consult with Parent prior the Company will allocate and make available four million dollars in cash ($4,000,000) (the "Employee Funds") from its cash reserves for distribution to taking officers and employees of the actions described Company (excluding the President of the Company). The Employee Funds will be distributed at the Effective Time to such officers and employees of the Company (excluding the President of the Company) and in this sentencesuch amounts and at such times as shall be determined in the sole discretion of the President of the Company.
Appears in 2 contracts
Samples: Merger Agreement (Pricellular Corp), Merger Agreement (Pricellular Wireless Corp)
Conduct of the Company. The Company covenants and agrees that, except for matters (i) expressly as permitted by Section 5.3, between the date of this Agreement and the Effective Time, it shall not, and shall not permit the Company Subsidiaries to, take or expressly fail to take any action, which actions or failures to take action, individually or in the aggregate, are intended to, or would reasonably be expected to, prevent, materially delay or materially impede the ability of the Company to consummate the Merger and the other transactions contemplated by this Agreement. The Company further covenants and agrees that, between the date of this Agreement and the Effective Time, except (iii) set forth on Part 6.01 of the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken with the prior written consent of Parent (Parent, which shall may not be unreasonably withheld, conditioned delayed or delayedconditioned, (ii) as contemplated by this Agreement or as set forth in Section 4.1 of the Company Schedule or (iii) for transactions between or among the Company and the Company Subsidiaries:
(a) the respective businesses of the Company and the Company Subsidiaries shall be conducted in the ordinary course and in a manner consistent with past practices, in each case in all material respects, and the Company and the Company Subsidiaries shall use reasonable best efforts to preserve intact their respective business organizations, to maintain significant beneficial business relationships with suppliers, distributors, customers and others having business relationships with them, in each case in the ordinary course of business, and to keep available the services of their current key officers and employees. It is understood and agreed that notwithstanding the limitations set forth in Section 4.1(b), (v) required by Applicable Law “in the ordinary course and in a manner consistent with past practices” shall include the Company’s or the rules and regulations of Nasdaq, from the date hereof until the earlier any of the Effective Time Company Subsidiary’s (i) participation in competitive bidding processes, and entry into transactions, with respect to any Xxxxxxx 000 xxxxxxxx, (xx) renewal of existing ground handling agreements as they expire, and participation in competitive bidding processes with respect to, and entry into, new ground handling agreements, and (iii) renewal of existing, or entry into new, aircraft charter or ACMI agreements so long as the termination Company’s total charter fleet is limited to an average of this Agreement six aircraft on a calendar-year basis. The Company shall consult with Parent prior to entering into or renewing any agreement that will result in accordance with Article 8 hereof, the more than $500,000 in expenses per year. The Company (A) shall, and shall cause each the Company Subsidiaries to, (A) maintain their books, accounts and records in a manner materially consistent with prior practice, (B) comply in all material respects with all laws, ordinances and regulations of governmental authorities applicable to the Company and the Company Subsidiaries, (C) maintain and keep in all material respects its Subsidiaries properties and equipment in good repair, working order and condition, ordinary wear and tear excepted, (D) perform in all material respects its obligations under all material contracts and commitments to use commercially reasonable efforts which it is a party or by which it is bound; (E) maintain or cause to (1) conduct its business be maintained the Company Aircraft and Company Engines in the ordinary course accordance, in all material respects, substantially consistent with past practice, (2) to the extent consistent with the foregoing clause (1)requirements of all applicable airworthiness directives and applicable laws, maintain its business as a going concern rules and (3) keep available regulations and in accordance, in all material respects, with the services of its current officers and key employees and to preserve the goodwill of and maintain satisfactory relationships with those Persons having material business relationships with FAA-approved maintenance program for the Company and its the Company Subsidiaries, ; and (BF) maintain those certain 26 Embraer 135s (which the Company is maintaining for Continental) according to the terms and provisions of the Continental CPA; provided, however, that no action by the Company or the Company Subsidiaries with respect to matters specifically addressed in Section 4.1(b) below shall be deemed to be a breach of this paragraph (a) unless such action would constitute a breach of such other provision; and
(b) without limiting the generality of the foregoing Section 4.1(a), the Company shall not, and shall cause each not permit any of its the Company Subsidiaries not to, do any of the following prior to Closing:
(ai) amend the Company’s or otherwise change its certificate of incorporation or bylawsbylaws or, or amend any certificate in the case of incorporation or bylawsthe Company Subsidiaries, or other comparable charter or their respective organizational documents, except (A) to the extent required to comply with applicable law or (B) for any amendment to the Company Rights Plan or to the terms of the Company’s SubsidiariesSeries A Junior Participating Preferred Stock made in connection with actions permitted or properly taken pursuant to Section 5.3;
(bii) other than with respect to a direct issue, sell, pledge, dispose of, grant or indirect wholly owned Subsidiary encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, any shares of capital stock of any class of the CompanyCompany or any Company Subsidiary, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of capital stock of any class of the Company or any Company Subsidiary, except in accordance with the terms of Options or other securities outstanding on the date hereof or the Company Rights Plan;
(iiii) establish a record date for, (A) declare, set aside aside, make or pay any dividends ondividend or other distribution, or make any other distributions (whether payable in cash, stock, property or otherwise, with respect to any of its capital stock or (B) in respect ofreclassify, combine, split or subdivide, or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock;
(iv) enter into any agreement with respect to the voting ofnew line of business or acquire (by merger, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, any capital stock material amount of the Company assets, securities, properties, interests or any of its Subsidiaries (or securities convertible or exchangeable therefor), (ii) split, reverse split, combine, subdivide or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) of the Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c), issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), or (iv) purchase, redeem or otherwise acquire or offer to purchase, redeem or acquire any Company Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPP;
(c) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company Securitiesbusinesses, other than (iA) the issuance of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereofexisting contracts or commitments, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement or (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company;
(d) merge, consolidate or, other than in the ordinary course of business substantially or (C) pursuant to any capital budget for 2010 provided to Parent prior to the date hereof;
(v) sell, lease, assign, pledge, encumber, dispose of or otherwise transfer any of its material assets, securities, properties, interests or businesses, other than (A) pursuant to existing contracts or commitments or (B) in the ordinary course of business;
(vi) make any material loans, advances or capital contributions to, or investments in, any other person, other than (A) in connection with actions permitted by the foregoing clause (iv) or (B) in the ordinary course of business;
(vii) incur any indebtedness for borrowed money or guarantees thereof, other than any indebtedness or guarantee incurred in the ordinary course of business;
(viii) except as required by law, required under existing contractual commitments or pursuant to Section 1.7, and except for actions involving non-executive employees in the ordinary course of business consistent with past practicepractices, take any action to (A) adopt, enter into strategic alliance into, or amend any employment agreement (whether at will or otherwise), severance, change in control, bonus, retirement, retention, welfare, incentive or similar legal partnership with agreement, arrangement or other Company Benefit Plan for the benefit or welfare of any Personcurrent, file a voluntary petition for bankruptcy prospective or liquidationformer director, dissolveofficer, liquidateemployee or consultant or any collective bargaining agreement, restructure (B) increase in any material respect the compensation or recapitalize or adopt a plan or agreement fringe benefits of, or resolutions providing pay any bonus to, any director, officer, employee or consultant, (C) amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding Options or Restricted Share awards, (D) grant any equity-based awards under any Company Benefit Plan or arrangement, including the grant of Options, stock appreciation rights, stock-based or stock-related awards, performance units or Restricted Shares, or remove existing restrictions in any Company Benefit Plans or agreements or awards made thereunder, or (E) create any bonus plan or grant any bonuses in connection with the transactions contemplated by this Agreement;
(ix) waive, release, assign, settle or compromise any claim, action or proceeding, or otherwise pay, discharge or satisfy any claims, liabilities or obligations, other than waivers, releases, assignments, settlements, compromises, payments, discharges or satisfactions (A) involving an amount equal to or less than the amount reserved for such claim, action, proceeding, liability or authorizingobligation in the financial statements contained in the Company SEC Reports, (B) made in the ordinary course of business and consistent with past practices or (C) involving only the payment of monetary damages not in excess of $1,000,000 in the aggregate (excluding amounts to be paid under existing insurance policies);
(x) enter into any “non-compete,” “non-solicit” or similar agreement that would materially restrict the businesses of the Surviving Company or any of its affiliates or their ability to solicit customers or employees following the Effective Time;
(xi) except as otherwise permitted by Section 5.3, adopt, effect, agree or approve any complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization recapitalization, bankruptcy, assignment for the benefit of creditors or other reorganization of the Company or any of its Subsidiariessuch entity;
(exii) change its methods of accounting (iother than Tax accounting, which shall be governed by clause (xiii) increase the salarybelow), wages, benefits, bonuses or other cash compensation payable or except in accordance with changes in GAAP as agreed to become payable to by the Company’s employees, officers, directors or Independent Contractors, except for increases independent auditors;
(xiii) (A) required enter into any closing agreement with respect to be made pursuant material Taxes, (B) settle or compromise any material liability for Taxes, (C) make, revoke or change any material Tax election, (D) agree to any adjustment of any material Tax attribute, (E) file or surrender any claim for a material refund of Taxes, (F) execute or consent to any waivers extending the statutory period of limitations with respect to the terms collection or assessment of material Taxes, (G) file any material amended Return or (H) request or obtain any material Tax ruling;
(xiv) enter into (A) any aircraft purchase agreement or (B) any amendment to an existing employment or other compensation agreements or arrangements aircraft purchase agreement, in effect either case, for the placement of an order for any aircraft that, as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof is not either a firm order aircraft or Collective Bargaining Agreement an option or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
(i) sell, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregate, except in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice;
(j) agree to any exclusivity, non-competition or similar provision or covenant limiting the ability of the Company or any of its Subsidiaries to compete or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect to capital expenditures in excess of the amounts aircraft set forth in Part 6.01(n)(ion Section 2.13(a)(ii) of the Company Disclosure Schedule;
(o) institute, settle or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(rxv) other than in the ordinary course of business business, enter into or amend any capacity purchase or similar agreement, as a result of which the aggregate number of aircraft subject to all of the Company’s capacity purchase or similar agreements would exceed 25 aircraft, to the extent such agreement or amendment would be effective following the Effective Time (it being acknowledged and agreed that entering into, amending or terminating any capacity purchase or similar agreement in any respect, so long as the numerical limits set forth in this Section 4.1(b)(xv) are not thereby exceeded, shall be deemed to be in the ordinary course);
(xvi) adopt or implement any stockholder rights plan, “poison pill” or other anti-takeover or other similar plan, device or arrangement that, in each case, is applicable to the Merger or any other transaction contemplated by this Agreement Agreement, nor shall it (i) amendexempt any persons (other than Parent, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding Merger Sub and their respective affiliates) from the expiration provisions of any Material Contract in accordance with its terms) takeover statute or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreementotherwise cause such restrictions not to apply, or (ii) renew or enter into any Contract with an Affiliate of the Company;
(s) voluntarily terminate, amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) of waive the Company Disclosure Schedule;
(t) conduct Rights Agreement or redeem the Rights or take any reduction-in-force of employees action to render the Company Rights Plan or the Rights inapplicable to any party other service providers than Parent or otherwise implement any layoffsMerger Sub, in each case that could implicate the WARN Act; or
(u) authorize, commit or agree to take do any of the foregoing actions. Notwithstanding anything set forth in this Agreement (except as permitted by Section 5.3);
(xvii) renew, modify, amend or terminate, or waive, delay the exercise of, release or assign any other documents related to the Mergermaterial rights or claims under, prior to the Closingany Company Material Contract, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over unless the Company, after consultation with outside legal counsel, determines in good faith that the failure to take any of its subsidiariessuch action would conflict with applicable U.S. antitrust laws, rules and regulations (including the HSR Act);
(xviii) make any written or any oral communications to the employees of the Governmental PermitsCompany or the Company Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, within unless the meaning Company provides Parent with a copy of the FCC Rules intended communication, Parent has a reasonable period of time to review and comment on the communication, and Parent and the FCC’s orders and other published rulings thereunder. In additionCompany shall cooperate in providing any such mutually agreeable communication;
(xix) terminate, the Company and its Subsidiaries may take such further commercially reasonable actions necessary cancel, modify or amend any material insurance policies covering aircraft hull or liability that are provided to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Company Subsidiary by Continental;
(xx) fail to maintain and possess the FAA-issued Air Carrier Certificate or the DOT-issued Certificate of Public Convenience and Necessity; and
(xxi) agree or formally commit to do any of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentenceforegoing.
Appears in 2 contracts
Samples: Merger Agreement (Expressjet Holdings Inc), Merger Agreement (Skywest Inc)
Conduct of the Company. The Company covenants (a) During the period commencing on the date of this Agreement and agrees thatending on the earlier of the termination of this Agreement in accordance with Article 8 and the Effective Time (the “Pre-Closing Period”), except for matters as (i) expressly permitted or expressly contemplated required by this Agreement, (ii) set forth on Part 6.01 of the Company Disclosure Schedule, required by Applicable Law or (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken with the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed), (v) required by Applicable Law or the rules and regulations of Nasdaq, from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereof, the Company (A) shall, and shall cause each of its the Company Subsidiaries to use commercially reasonable efforts to (1) to, conduct its business in the ordinary course in all material respectscourse, substantially consistent with past practice, and use its commercially reasonable efforts to (2A) to the extent consistent with the foregoing clause (1), maintain preserve intact its business as a going concern organization, assets and technology, (3B) keep available the services of its current officers and key employees of the Company and to the Company Subsidiaries, (C) maintain in effect all of its material Governmental Authorizations and (D) maintain and preserve the goodwill of and maintain satisfactory relationships with those Persons customers, lenders, suppliers, licensors, licensees, distributors and others having material business relationships with the Company or any of the Company Subsidiaries.
(b) Without limiting the generality of the foregoing in Section 6.01(a) and its Subsidiariesexcept as (x) set forth in Section 6.01(b) of the Company Disclosure Schedules, and (By) expressly required by this Agreement or (z) required by Applicable Law, during the Pre-Closing Period, the Company shall not, and nor shall cause each it permit any of its the Company Subsidiaries to, do any of the following without the prior written consent of Parent (which consent shall not to:be unreasonably withheld, conditioned or delayed):
(ai) amend the Company’s certificate Organizational Documents of incorporation the Company or bylawsany of the Company Subsidiaries (whether by merger, consolidation or amend otherwise);
(ii) issue, sell, grant, pledge or otherwise dispose of or grant any certificate of incorporation or bylaws, or other comparable charter or organizational documents, of the Company’s or any of the Company Subsidiaries’ capital stock, or grant any options, warrants or other rights to acquire any such capital stock or other interest or any instrument convertible into or exchangeable or exercisable for any such capital stock or other interest, other than the issuance of shares of Company Common Stock upon the exercise of Company Stock Options or issued after the date of this Agreement pursuant to existing Company Stock Plans or pursuant to the terms of the Company Restricted Stock Units in each case that are outstanding on the date of this Agreement, and in each case in accordance with the applicable Company Stock Plan’s and Company Equity Award’s terms as in effect on the date of this Agreement;
(iii) amend any term of any Company Security or any security of any of the Company Subsidiaries (in each case, whether by merger, consolidation or otherwise);
(iv) purchase, redeem or otherwise acquire any Company Securities, except for acquisitions of Company Common Stock by the Company in satisfaction by holders of Company Equity Awards in existence as of the date of this Agreement for the applicable exercise price and/or withholding taxes;
(v) adopt any plan of merger, consolidation, reorganization, liquidation or dissolution of the Company or any of the Company Subsidiaries, file a petition in bankruptcy under any provisions of federal or state bankruptcy Applicable Law on behalf of the Company or any of the Company Subsidiaries or consent to the filing of any bankruptcy petition against any the Company or any of the Company Subsidiaries under any similar Applicable Law;
(vi) create any Subsidiary of the Company or any of the Company Subsidiaries;
(bvii) other than with respect to a direct or indirect wholly owned Subsidiary of the Company(A) declare, (i) establish a record date for, declareaccrue, set aside or pay any dividends on, dividend or make any other distributions distribution on or in respect of (whether in cash, stock, property or otherwise) in respect of, the Company’s or enter into any agreement with respect of the Company Subsidiaries’ capital stock or other securities (other than to the voting ofCompany or one of the Company Subsidiaries) or (B) redeem, repurchase or otherwise reacquire, split, combine or reclassify any capital stock of the Company or any of its the Company Subsidiaries (or securities convertible or exchangeable therefor), (ii) split, reverse split, combine, subdivide or reclassify or otherwise amend change the terms of any capital stock (or securities convertible or exchangeable therefor) structure of the Company or any of its the Company Subsidiaries;
(viii) make any material changes in any accounting methods, (iii) principles or practices except as expressly provided required by a change in Section 6.01(c), issue GAAP or authorize required by Regulation S-X promulgated under the issuance of Exchange Act;
(ix) change in any other securities in material respect of, in lieu of the policies or in substitution for, shares of practices regarding accounts receivable or accounts payable or fail to manage working capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), or (iv) purchase, redeem or otherwise acquire or offer to purchase, redeem or acquire any Company Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPPpast practices;
(cx) issueexcept in the ordinary course of business in accordance with past practice, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company Securities, other than (i) the issuance of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards accelerate, terminate, cancel, fail to exercise an expiring renewal option, materially amend, grant a material waiver under or otherwise materially modify any Material Contract or Material Lease Agreement or any Contract or Lease Agreement that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as would constitute a Material Contract or a Material Lease Agreement if in effect on as of the date of this Agreement or (B) grants enter into any Contract or awards of Company Securities Lease Agreement that would constitute a Material Contract or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements a Material Lease Agreement if in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement Agreement;
(xi) make any capital expenditures in excess of $50,000 in the aggregate;
(xii) incur, assume or guarantee any Indebtedness (iiiother than for any intercompany indebtedness) for borrowed money incurred in the issuance ordinary course of equity interests of a wholly business consistent with past practice between the Company and any wholly-owned Company Subsidiary or between any wholly-owned Company Subsidiaries.
(xiii) grant or suffer to exist any material Liens on any properties or assets, tangible or intangible, of the Company or any of the Company Subsidiaries other than Permitted Liens;
(xiv) make any capital investment in or loan to, or make or forgive any loan to, any other Person (other than (A) advancement of expenses to Company Employees in connection with the performance of their duties in the ordinary course of business consistent with past practice or (B) to any wholly-owned Company Subsidiary in the ordinary course of business consistent with past practice);
(xv) sell, lease, pledge, abandon, assign or otherwise dispose of any of the material tangible assets, properties or rights of the Company or another wholly owned Subsidiary any of the CompanyCompany Subsidiaries except sales of assets (A) pursuant to existing Contracts or (B) in the ordinary course of business consistent with past practice;
(dxvi) mergepurchase or acquire, consolidate directly or indirectly (including by merger, consolidation, or acquisition of stock or assets or any other business combination), any corporation, partnership, other business organization or division thereof or any other business or any equity interest in or all or substantially all of the assets of any Person;
(xvii) enter into a new line of business or abandon or discontinue any existing line of business;
(xviii) settle, pay, discharge or satisfy any Proceeding (other than Stockholder Litigation, which is addressed exclusively in Section 6.13) where such settlement, payment, discharge or satisfaction would (A) require the payment by the Company and/or any of the Company Subsidiaries of an amount in excess of $25,000 or (B) impose any material restrictions or limitations upon the operations or business of Company or any of the Company Subsidiaries, whether before, on or after the Effective Time;
(xix) commence any Proceeding other than for the routine collection of invoices or enforcement of this Agreement;
(xx) except as required by Applicable Law or agreements existing as of the date of this Agreement, (A) pay bonuses or increase the compensation payable or that could become payable by the Company or any of the Company Subsidiaries to directors, officers or employees, (B) enter into any new or amend in any material respect, any existing employment, indemnification, severance, retention, change in control or similar agreement with any of its past or present directors, officers or employees, (C) establish, adopt, enter into, amend, terminate, exercise any discretion under, or take any action to accelerate rights under any Company Employee Plans or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this Agreement, (D) enter into any third-party Contract with respect to a Company Employee Plan (including contracts for the provision of services to such Company Employee Plan, including benefits administration) having a term of greater than one (1) year, (E) accelerate any rights or benefits, or, other than in the ordinary course of business substantially and consistent with past practice, enter into strategic alliance make any determinations or interpretations with respect to any Company Employee Plan, (F) fund any rabbi trust or similar legal partnership with arrangement, (G) grant or amend any Personequity or equity-based awards except as required by existing Company Stock Plans or (H) without the prior written consent of Parent, file a voluntary petition for bankruptcy or liquidationhire, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement ofreplace, or resolutions providing terminate (other than for cause) the employment or authorizingservices of any officer, complete employee, independent contractor or partial bankruptcyconsultant; provided, liquidation, dissolution, merger, consolidation, restructuring, recapitalization that no such prior written consent shall be required to hire or other reorganization of replace a Person who is not an officer so long as (x) hiring or replacing such Person is within the Company or any of its SubsidiariesCompany’s long range forecast as set forth in the document entitled “4 LRF NOV 25 2014UPDATE.xls” Made Available to Parent and (y) the compensation to be paid to such Person shall not exceed $150,000 per annum;
(exxi) assign, xxxxx x Xxxx on, xxxxx a license, release, immunity or a covenant not to xxx under or in respect of any material Company Owned IP (i) increase other than the salary, wages, benefits, bonuses or other cash compensation payable or to become payable grant of non-exclusive licenses to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made customers in the ordinary course of business, and (ii) other than as required by to the terms extent such licenses are necessary for the respective customer’s use or receipt of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend Company’s products and services and subject to terms and conditions (including by accelerating the vesting, payment or funding of any benefits underas to confidentiality) that are consistent with past practice), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
(fxxii) hirecancel, engage fail to renew, fail to continue to prosecute, fail to protect or terminate the employment defend, abandon or engagement of (other than for cause, as determined by the Company) allow to lapse any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregateCompany Owned IP, other than one or more acquisitions abandonment of inventorysuch Company Owned IP that the Company determines in its reasonable judgment, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice, is no longer material to the Company;
(ixxiii) sellsettle or compromise any material claim relating to Taxes, assignamend any material Tax Return, leasemake any change in any of the methods, licenseprinciples or practices used by it for Tax accounting except as required by Applicable Law, pledge, transfer, abandon, subject or file any material Tax election or any election pursuant to Section 7701 of the Code and the Treasury Regulations thereunder with respect to any Lien, permit to lapse or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregate, except in the ordinary course of the Company’s or its Company Subsidiaries’ business substantially consistent with past practice;
(jxxiv) agree to enter into any exclusivitytransaction with any stockholder, non-competition director or similar provision or covenant limiting the ability executive officer of the Company or any of its Subsidiaries to compete or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;
(o) institute, settle or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than in the ordinary course of business or as contemplated by this Agreement (i) amend, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an Affiliate of the Company;
(s) voluntarily terminate, amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Act; or
(uxxv) authorize, commit resolve, commit, agree (by Contract or agree otherwise) or otherwise become obligated to take any of the actions in the foregoing actions. Notwithstanding anything clauses (i) through (xxiv).
(c) The parties hereto acknowledge and agree that (i) nothing contained in this Agreement shall be deemed to give Parent or Merger Sub, directly or indirectly, the right to control or direct the Company’s operations (including for purposes of the HSR Act) prior to the consummation of the Offer and (ii) no consent of Parent shall be required with respect to any matter set forth in this Agreement or any other documents related to the Merger, prior extent that the requirement of such consent would violate any Applicable Law. Prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In additionEffective Time, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employeesshall exercise, suppliers, customers and other individuals having business dealings consistent with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shallterms and conditions hereof, to the extent legally permissible complete control and only if time permits, consult with Parent prior to taking the actions described in this sentencesupervision over its operations.
Appears in 2 contracts
Samples: Merger Agreement (Actuate Corp), Merger Agreement (Open Text Corp)
Conduct of the Company. The Company covenants From the date of this Agreement until the earlier of termination of this Agreement and agrees thatthe Effective Time, except for matters (ix) expressly permitted as prohibited or required by Applicable Law, (y) as set forth in Section 6.01 of the Company Disclosure Schedule or (z) as otherwise required or expressly contemplated by this Agreement, (ii) set forth on Part 6.01 of the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken with the prior written unless Parent shall otherwise consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed), (v) required by Applicable Law or the rules and regulations of Nasdaq, from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereof, the Company (A) shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) to, conduct its business in the ordinary course of business consistent with past practice and in compliance in all material respects, substantially consistent respects with past practice, (2) all Applicable Laws and all Company Permits and use its commercially reasonable efforts to the extent consistent with the foregoing clause (1), maintain preserve intact its business as a going concern organization and (3) relationships with customers, suppliers, licensors, licensees, distributors and other Third Parties and keep available the services of its current present officers and key employees employees; provided, however, that no action or failure to take action by the Company or any of its Subsidiaries with respect to matters specifically addressed by any provision of Section 6.01(a) through (p) shall constitute a breach under this paragraph unless such action or failure to take action would constitute a breach of such provision of Section 6.01(a) through (p), as applicable. Without limiting the generality of the foregoing and to preserve the goodwill fullest extent permitted by Applicable Law, from the date of this Agreement until the earlier of termination of this Agreement and maintain satisfactory relationships with those Persons having material business relationships with the Effective Time, except as set forth in Section 6.01 of the Company and its SubsidiariesDisclosure Schedule or with Parent’s prior written consent (which consent shall not be unreasonably withheld, and conditioned or delayed (Bother than with respect to Section 6.01(a), Section 6.01(c) or Section 6.01(d))), the Company shall not, and shall cause each not permit any of its Subsidiaries not to:
(a) amend the Company’s adopt or propose any change to its certificate of incorporation or bylaws, or amend any certificate of incorporation or bylaws, bylaws or other comparable charter organizational documents (whether by merger, consolidation or organizational documents, of the Company’s Subsidiariesotherwise);
(b) other than with respect to a direct or indirect wholly owned Subsidiary of the Company, (i) establish merge or consolidate with any other Person, (ii) acquire (including 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, securities or property, other than (A) acquisitions of assets or property (other than, for the avoidance of doubt, interests in any corporation, partnership, other business organization or any division thereof or securities) in the ordinary course of business consistent with past practice in an amount not to exceed $20,000,000 in the aggregate for all such acquisitions, (B) acquisitions of, securities under the Company’s investment portfolio consistent with the Company’s historical investment policy and (C) transactions (1) solely among the Company and one or more of its Subsidiaries where the Company is the acquiring party or (2) solely among the Company’s Subsidiaries, or (iii) adopt a record date forplan of complete or partial liquidation, dissolution, recapitalization or restructuring;
(c) (i) split, combine or reclassify any shares of its capital stock, (ii) amend any term or alter any rights of any of its outstanding equity securities, (iii) in the case of the Company only, declare, set aside or pay any dividends on, dividend or make any other distributions distribution (whether in cash, stock, property or otherwiseany combination thereof) in respect of, or enter into of any agreement with respect to the voting of, any shares of its capital stock or other securities, other than regular cash dividends in the ordinary course of business consistent with past practice in an amount not to exceed $0.125 per share of Company Common Stock per quarter (appropriately adjusted to reflect any stock dividends, subdivisions, splits, combinations or other similar events relating to Company Common Stock), (iv) in the case of Subsidiaries of the Company only, fail to declare, set aside or pay any dividend or make any other distribution (whether in cash, stock, property or any combination thereof) in respect of any shares of its Subsidiaries (or securities convertible or exchangeable therefor), (ii) split, reverse split, combine, subdivide or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) of the Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c), issue or authorize the issuance of any other securities in respect of, in lieu the ordinary course of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), business consistent with past practice or (ivv) purchaseredeem, redeem repurchase, cancel or otherwise acquire or offer to purchaseredeem, redeem repurchase, or otherwise acquire any Company Securitiesof its securities or any securities of any Subsidiary of the Company, except for the net settlement of Company Equity Awards or acquisitions other than repurchases of shares of Company Common Stock by in connection with the Companyexercise of Company Stock Options or in connection with the vesting or settlement of shares of Company Restricted Shares or other equity and equity-linked awards (including in satisfaction of any amounts required to be deducted or withheld under Applicable Law), in each case, in satisfaction by holders of Company Equity Awards case outstanding as of the applicable withholding taxes date of this Agreement or awarded after the date of this Agreement to the extent permitted by this Agreement in accordance the ordinary course of business consistent with the terms of the ESPPpast practice;
(cd) issue, deliver, deliver or sell, grantor authorize the issuance, announcedelivery or sale of, pledgeany shares of its capital stock or any securities convertible into or exercisable for, transferor any rights, subject warrants or options to acquire, any Lien, otherwise encumber such capital stock or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company Securitiessuch convertible securities, other than (i) the issuance of any shares of Company Common Stock pursuant to (A) upon the terms exercise of Company Equity Awards that Stock Options or the vesting of Company Stock Units, that, in each case, are outstanding on the date hereof, of this Agreement in accordance with the applicable present terms of such options and units or are issued after the date of this Agreement as permitted by the following clauses (iii) or (iv), (ii) with respect to capital stock or securities of any Subsidiary of the Company, in connection with contribution-in-kind transactions solely among the Company and one or more of its wholly owned Subsidiaries or solely among the Company’s wholly owned Subsidiaries, (iii) Company Stock Units (each an “Interim Period Stock Unit”) with an aggregate fair market value equal to (A) $51,000,000 for annual Interim Period Stock Unit grants to be made in the ordinary course of business consistent with past practice, including with respect to timing of such annual Interim Period Stock Unit grants (and including, for the avoidance of doubt, the fair market value of any Company Stock Unit or other equity-based award required to be granted by the Company pursuant to any Employee Plan) and (B) $7,000,000 for Interim Period Stock Unit grants to be made to new hires in the ordinary course of business consistent with past practice (including, for the avoidance of doubt, the fair market value of any Company Stock Unit or other equity-based award required to be granted by the Company pursuant to any Employee Plan), each of which shall, by its terms, become vested and be administered in accordance with the terms and conditions of such Interim Period Stock Unit, provided that the terms and conditions of each Interim Period Stock Unit shall include the following provisions: (x) such Interim Period Stock Unit shall vest in 25% increments per year, (y) the vesting of such Interim Period Stock Unit shall not accelerate in connection with the approval or consummation of the transactions contemplated by this Agreement and (z) in the event that the Merger is consummated, as of the Effective Time, such Interim Period Stock Unit shall convert into a cash-settled restricted stock unit, with the number of shares of Parent Common Stock underlying such restricted stock unit equal to the product of (A) the number of shares of Company Common Stock represented by such Interim Period Stock Unit multiplied by (B) the Equity Awards Award Cash Consideration divided by the Parent Stock Price, shall not be credited with dividend equivalents and shall vest and settle on the earlier to occur of (1) the vesting date of such Interim Period Stock Unit, subject to the applicable holder’s continued employment through such vesting date, and (2) the date the holder experiences an involuntary termination of employment without cause or such other termination of employment that would give rise to the payment of severance benefits under an arrangement applicable to the holder and (iv) grants to directors in the ordinary course of business consistent with past practice, provided that the Company shall not permit directors to elect to be granted Company Stock Options;
(e) incur any capital expenditures or any obligations or liabilities in connection therewith in excess of (i) for fiscal year 2012, $20,000,000 individually or $100,000,000 in the aggregate (including all capital expenditures or obligations or liabilities in connection therewith made prior to the date of this Agreement for fiscal year 2012), (ii) for fiscal year 2013, $20,000,000 individually or $110,000,000 in the aggregate or (iii) for fiscal year 2014, $20,000,000 individually or $110,000,000 in the aggregate; provided that the Company and its Subsidiaries shall not, during any consecutive six-month period falling completely in fiscal year 2012, 2013 or 2014, incur any capital expenditures or any obligations or liabilities in connection therewith, in excess of 75% of the aggregate limit for such fiscal year as set forth in the foregoing clauses (i) through (iii);
(f) sell, lease, license or otherwise dispose of any Subsidiary or any division thereof or of the Company or any assets, securities or property, other than (i) pursuant to existing contracts or commitments disclosed on Section 6.01(f) of the Company Disclosure Schedule, (ii) in the ordinary course of business consistent with past practice for fair market value in an amount not to exceed $20,000,000 in the aggregate, (iii) dispositions of securities under the Company’s investment portfolio consistent with the Company’s historical investment policy or (iv) transactions (A) where the Company is the disposing party, among the Company and one or more of its wholly owned Subsidiaries in the ordinary course of business consistent with past practice or (B) where a Subsidiary of the Company is the disposing party, among the Company and one or more of its Subsidiaries or among the Company’s Subsidiaries;
(g) (i) make any material loans, advances or capital contributions to any other Person, other than loans, advances or capital contributions (A) by the Company to any wholly owned Subsidiary in the ordinary course of business consistent with past practice or (B) by any Subsidiary of the Company to the Company or to any other Subsidiary of the Company, or (ii) incur, assume, guarantee or repurchase any indebtedness for borrowed money, other than (A) in the ordinary course of business consistent with past practice in an amount not to exceed $25,000,000 in the aggregate (provided that all such indebtedness for borrowed money must be prepayable at any time by the Company without penalty) or (B) transactions permitted by the foregoing clause (i);
(h) create or incur any Lien (except for a Permitted Lien) on any material asset;
(i) (i) enter into any Company Material Contract (including by amendment of any Contract that is not a Company Material Contract such that such Contract becomes a Company Material Contract), other than in the ordinary course of business consistent with past practices (except that no Company Material Contract pursuant to clause (v) of Section 4.18(a) shall be entered into), or (ii) terminate, renew, extend or amend in any material respect any Company Material Contract or waive any material right thereunder, other than in the ordinary course of business consistent with past practices;
(j) terminate, suspend, abrogate, amend or modify in any material respect any material Company Permit;
(k) except as required by Applicable Law or Employee Plans or other contracts as in effect on the date hereof, (i) grant any severance or termination pay to (or amend any existing arrangement with) any of their respective directors, officers or employees (including former directors, officers or employees) other than (A) as required pursuant to Employee Plans existing as of the date of this Agreement or (B) grants or awards in the ordinary course of Company Securities or Company Equity Awards required to be made pursuant to the terms business consistent with past practice for terminated employees in exchange for a general release of existing employment claims or other compensation customary covenants, (ii) increase benefits payable under any severance or termination pay policies or employment agreements or arrangements in effect existing as of the date hereofof this Agreement, (iii) enter into any employment, deferred compensation or other similar agreement (or any amendment to any such existing agreement) with any of their respective directors, officers or employees (including former directors, officers or employees); provided that the Company may provide new hires with offer letters in the ordinary course of business consistent with past practice, (iv) establish, adopt or amend any Employee Plan or labor agreement, other than (A) as required by Applicable Law or (B) in the ordinary course of business consistent with past practice, or (v) increase the compensation, bonus or other benefits payable to any of their respective directors, officers or employees (including former directors, officers or employees), other than increases in base compensation and bonus to directors and employees who are not considered to be executive officers (as defined in the 0000 Xxx) in the ordinary course of business consistent with past practice (it being understood that the amount of bonus actually paid may be higher or lower than prior years based on actual performance and such grants payment shall not be considered an increase) and increases in employee welfare benefits in the ordinary course of business consistent with past practice for employees generally);
(l) make any material change in any method of financial or awards are statutory accounting or financial or statutory accounting principles or practice, except for any such change required by reason of (or, in the reasonable good-faith judgment of the Company, advisable under) a concurrent change in GAAP, SAP or Regulation S-X under the 1934 Act, as approved by its independent public accountants;
(m) make any material change in investment, hedging, underwriting or claims administration principles or practices or in methodologies for estimating and providing for medical costs and other liabilities, in each case with respect to the Company or any of its “significant subsidiaries” (as defined in Rule 102(w) of Regulation S-X promulgated pursuant to the 1934 Act), except, to the extent applicable, for any such changes required by reason of a form concurrent change in GAAP, SAP or Regulation S-X under the 1934 Act, as approved by its independent public accountants (as to accounting matters);
(n) settle or compromise, or propose to settle or compromise, any claim, action, suit, investigation or proceeding (including any litigation, arbitration or dispute, including disputes with Providers) involving or against the Company or any of award agreement that has been made available its Subsidiaries, other than settlements or compromises (i) involving only monetary payment by the Company or any of its Subsidiaries in an amount not to Parent exceed $2,000,000 individually or $15,000,000 in the aggregate or (ii) for the issuance avoidance of shares of Company Common Stock under the ESPP and pursuant doubt, relating to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the CompanyTaxes;
(do) mergesell, consolidate orassign, license, sublicense, abandon, allow to lapse, transfer or otherwise dispose of, or create or incur any Lien (other than a Permitted Lien) on, any Company Intellectual Property, other than in the ordinary course of business substantially consistent with past practice, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries;
(e) (i) increase the salary, wages, benefits, bonuses or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
(i) sell, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregate, except in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice;
(j) agree to any exclusivity, non-competition or similar provision or covenant limiting the ability of the Company or any of its Subsidiaries to compete or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;
(o) institute, settle or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business exclusive licenses or (ii) Proceedings brought against Parent for the purpose of disposing of obsolete or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;worthless assets; or
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than in the ordinary course of business or as contemplated by this Agreement (i) amend, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an Affiliate of the Company;
(s) voluntarily terminate, amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Act; or
(u) authorizeagree, commit or agree propose to take do any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentenceforegoing.
Appears in 2 contracts
Samples: Merger Agreement (Aetna Inc /Pa/), Merger Agreement (Coventry Health Care Inc)
Conduct of the Company. The (a) Except as set forth in the corresponding section of the Company Disclosure Schedule or otherwise as expressly contemplated hereby, subject to Applicable Law, the Company covenants and agrees as to itself and its Subsidiaries that, except for matters (i) expressly permitted or expressly contemplated by this Agreement, (ii) set forth on Part 6.01 of the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken with the prior written consent of Parent (which shall not be unreasonably withheld, conditioned or delayed), (v) required by Applicable Law or the rules and regulations of Nasdaq, from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereofuntil the Effective Time, the Company (A) shall, business of it and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) conduct its business shall be conducted only in the ordinary course in all material respects, substantially consistent with past practicepractice and, (2) to the extent consistent with the foregoing clause (1)therewith, it and its Subsidiaries shall use their respective reasonable best efforts to preserve its business organization intact and maintain its existing relations and goodwill with Governmental Authorities, customers, suppliers, distributors, creditors, lessors, employees and business as a going concern associates and (3) keep available the services of its current officers and key the present employees and to preserve the goodwill agents of and maintain satisfactory relationships with those Persons having material business relationships with the Company and its Subsidiaries. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the Effective Time, the Company will not and (B) shall not, and shall cause each of will not permit its Subsidiaries to (unless Parent shall otherwise approve in writing, which approval shall not to:be unreasonably withheld or delayed):
(ai) amend the Company’s certificate adopt or propose any change in its articles of incorporation or bylaws, bylaws (or amend any certificate of incorporation or bylaws, or other comparable charter or organizational similar governing documents, of the Company’s Subsidiaries);
(bii) other than with respect to a direct merge or indirect wholly owned Subsidiary of the Company, (i) establish a record date for, declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock, property or otherwise) in respect of, or enter into any agreement with respect to the voting of, any capital stock of consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly-owned Subsidiaries of the Company that are not obligors or guarantors of third party indebtedness;
(iii) acquire assets outside of the ordinary course of business from any other Person with a value or securities convertible or exchangeable therefor), (ii) split, reverse split, combine, subdivide or reclassify or otherwise amend purchase price in the terms aggregate in excess of any capital stock (or securities convertible or exchangeable therefor$250,000 other than acquisitions pursuant to Contracts to the extent in effect immediately prior to the execution of this Agreement and set forth in Section 6.01(a)(iii) of the Company Disclosure Schedule or any of its Subsidiaries, (iii) except as expressly provided otherwise set forth in Section 6.01(c)6.01(a)(iii) of the Company Disclosure Schedule;
(iv) other than pursuant to Contracts to the extent in effect as of immediately prior to the execution of this Agreement and set forth in Section 6.01(a)(iv) of the Company Disclosure Schedule, issue and other than the issuance of shares of Company Stock upon the exercise of outstanding Company Stock Options or Company Warrants, in each case, in accordance with their terms, issue, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, encumber, or authorize the issuance of any other securities in respect issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, in lieu of or in substitution for, any shares of capital stock of the Company or any of its Subsidiaries or any other voting securities (or securities convertible or exchangeable therefor), or (iv) purchase, redeem or otherwise acquire or offer to purchase, redeem or acquire any Company Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPP;
(c) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company Securities, other than (i) the issuance of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement or (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to by a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly wholly-owned Subsidiary of the Company to the Company or another wholly wholly-owned Subsidiary Subsidiary), or securities convertible or exchangeable or exercisable for any shares of the Companysuch capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or other voting securities or such convertible or exchangeable securities or any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock-based performance units;
(dv) merge, consolidate or, other than in the ordinary course of business substantially consistent with past practice, enter into strategic alliance create or similar legal partnership with incur any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries;
(e) (i) increase the salary, wages, benefits, bonuses or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect Lien on the date hereof;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
(i) sell, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregate, except in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice;
(j) agree to any exclusivity, non-competition or similar provision or covenant limiting the ability of the Company or any of its Subsidiaries to compete or engage in any line of businessthat is material, with any Person individually or in any geographic areathe aggregate, or to the Company;
(vi) other than pursuant to which any benefit or right would be required Contracts to be given or lost the extent in effect as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after immediately prior to the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date execution of this Agreement and (zset forth in Section 6.01(a)(vi) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change Disclosure Schedule, make any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guaranteesloan, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries to or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness investment in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $50,000 in the aggregate;
(vii) 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 for dividends or other distributions by any direct or indirect wholly-owned Subsidiary of the Company to the Company or to any other direct or indirect wholly-owned Subsidiary of the Company) or enter into any agreement with respect to the voting of its capital stock;
(viii) reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock except the acceptance of shares of Company Stock as payment of the exercise price of stock options or for withholding taxes incurred in connection with the exercise of Company Stock Options or the vesting of restricted stock, in each case in accordance with past practice and the terms of the applicable award;
(ix) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any securities or warrants or other rights to acquire any security of the Company or any of its Subsidiaries, except for indebtedness for borrowed money incurred in the ordinary course of business not to exceed $500,000 in the aggregate;
(x) except as set forth in Section 6.01(a)(x) of the Company Disclosure Schedule, make or authorize any capital expenditure;
(xi) enter into (A) any Contract that would have been a Company Material Contract had it been entered into prior to the execution of this Agreement (provided that for purposes of this clause (A), the dollar amount in clause (viii) of the definition of Company Material Contract shall be $100,000, (B) any Contract that would be of a type referred to in the last sentence of Section 4.12, (C) any Contract that is a lease of real property, other than capital contributions renewals of leases in effect as of the date of this Agreement, (D) any Contract that provides for the supply to the Company or any Subsidiary of any materials or components used in the conduct of its business, and loans which may not be cancelled without material liability to the Company or its Subsidiaries upon notice of sixty (60) days or less or (E) any material Contract to the extent consummation of the transactions contemplated by this Agreement or compliance by the Company with the terms hereof could reasonably be expected to conflict with, or result in a violation or breach of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to the loss of a benefit under, or result in the creation of any Lien in or upon any of the properties or other assets of the Company or any of its Subsidiaries under, or require Parent or any of its Affiliates to transfer any of its material assets under, or give rise to any wholly owned Subsidiaryincreased, and extensions additional, accelerated, or guaranteed right or entitlements of trade credit any third party under, or result in any material alteration of, any provision of such Contract;
(xii) other than in the ordinary course of business, (v) amendamend or modify in any material respect, modify or terminate or waive any provision of the Existing Credit Agreement (other than to waive material right or otherwise cure benefit under, any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit AgreementCompany Material Contract;
(mxiii) makemake any changes with respect to financial accounting policies or procedures, change except as required by changes in GAAP or revoke by Applicable Law;
(xiv) (A) pay, discharge, settle or satisfy any single claim, liability, obligation or litigation or other proceeding (absolute, accrued, asserted or unasserted, contingent or otherwise) for an amount in excess of $250,000 or multiple such claims, liabilities, obligations or litigation or other proceedings (absolute, accrued, asserted or unasserted, contingent or otherwise) for an aggregate amount in excess of $500,000, or which would be reasonably likely to have any adverse impact on the operations of the Company or any of its Subsidiaries or on any current or future litigation or other proceeding of the Company or any of its Subsidiaries, (B) cancel any material Tax electionindebtedness in excess of $50,000, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return other than (i) in a manner inconsistent the ordinary course of business consistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 of the Code practice or (or similar provision of state, local or non-U.S. lawii) in respect accordance with Section 6.08, (C) waive or assign any claims or rights of material value or (D) waive any material Taxbenefits of, settle or agree to modify in any material Tax Proceedingrespect, surrender any right or, subject to claim a material Tax refundthe terms hereof, offset or other reduction in Tax liabilityknowingly fail to enforce, or consent to any extension matter with respect to which consent is required under any confidentiality, standstill or waiver similar agreement to which the Company or any of its Subsidiaries is a party;
(xv) sell, lease, license, or otherwise dispose of any assets of the limitations period applicable to any material Tax claim Company or assessment outside its Subsidiaries except for ordinary course sales of products or services provided in the ordinary course of business;
(n) make any commitment business or obsolete assets, and except for sales, leases, licenses or other dispositions of assets with respect to capital expenditures a fair market value not in excess of $250,000 in the amounts aggregate, other than pursuant to Contracts in effect prior to the execution of this Agreement and set forth in Part 6.01(n)(iSection 6.01(a)(xv) of the Company Disclosure Schedule or as otherwise set forth in Section 6.01(a)(xv) of the Company Disclosure Schedule;
(oxvi) instituteexcept as required to ensure that any Benefit Plan or Benefit Agreement (in each case, settle as in effect as of the date hereof and to the extent true, complete and accurate copies of which have been heretofore delivered to Parent as of the date of this Agreement) is not then out of compliance with Applicable Law or agree to settle comply with any ProceedingsBenefit Plan, Benefit Agreement or other than Contract entered into prior to the date hereof (i) in each case, as in effect as of the settlement date hereof and to the extent true, complete and accurate copies of claimswhich have been heretofore delivered to Parent as of the date of this Agreement), liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents adopt, enter into, terminate or amend (1) any collective bargaining agreement, (2) Benefit Plan or (3) any Benefit Agreement, (B) involving payments increase in any manner the compensation, bonus or fringe or other benefits of, or pay any discretionary bonus of less than $500,000 individually any kind or $1,000,000 in the aggregate; provided that neither the Company nor amount whatsoever to, any of its Subsidiaries shall settle current or agree to settle any Proceeding which settlement involves a conduct remedy former director, officer, employee or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than consultant, except in the ordinary course of business consistent with past practice of the Company or as contemplated by this Agreement its Subsidiaries, (iC) amendgrant or pay any severance or termination pay (except for severance or termination pay granted or paid in the ordinary course of business consistent with past practice to employees other than Key Personnel), modify, renew or terminateto, or grant any release increase the severance or waiver undertermination pay of, any Material Contract current or former director, officer, employee or consultant of the Company or any of its Subsidiaries, (excluding D) remove any existing restrictions in any Benefit Agreements, Benefit Plans or awards made thereunder, (E) take any action to fund or in any other way secure the expiration payment of compensation or benefits under any Benefit Plan or Benefit Agreement, (F) take any action to accelerate the vesting or payment of any Material Contract in accordance with its terms) compensation or enter into benefit under any new Contract that would have been a Material Contract if in existence on the date of this Agreement, Benefit Plan or Benefit Agreement or awards made thereunder or (iiG) renew except as may be reasonably necessary to comply with GAAP (provided that prior written notice is provided to Parent), change any actuarial or enter into other assumption used to calculate funding obligations with respect to any Contract with an Affiliate of Benefit Plan or change the Companymanner in which contributions to any Benefit Plan are made or the basis on which such contributions are determined;
(sxvii) voluntarily terminateengage in the conduct of any new line of business, amend or fail to renew or preserve any Company Communications License other than as set forth on Part 6.01(sexpressly permitted by Section 6.01(a)(iii) of the Company Disclosure Schedule;
(txviii) conduct except as required by Applicable Law, (i) make or change any reduction-in-force of employees tax election, (ii) settle any Tax audit or other service providers or otherwise implement (iii) file any layoffsamended Tax Return, in each case case, that could implicate is reasonably likely to result in an increase to a Tax liability, which increase is material to the WARN ActCompany and its Subsidiaries, taken as a whole; or
(uxix) authorizeagree, resolve or commit or agree to take do any of the foregoing; provided, however, that the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, covenants shall not prevent the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies from undertaking transactions between or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentenceamong themselves.
Appears in 2 contracts
Samples: Merger Agreement (Pw Eagle Inc), Merger Agreement (Pw Eagle Inc)
Conduct of the Company. The Company covenants and agrees that, except for matters (i) expressly permitted or expressly contemplated by this Agreement, (ii) set forth on Part 6.01 of the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken Except with the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed), (v) as contemplated by this Agreement, as set forth in Section 6.01 of the Company Disclosure Letter or as required by Applicable Law or the rules and regulations of NasdaqLaw, from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereofTime, the Company (A) shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to to, (1i) conduct its business in the ordinary course in all material respects, substantially consistent with past practicepractices, (2ii) to the extent consistent with the foregoing clause (1), maintain conduct its business as in material compliance with all Applicable Laws (except where such failure to be in compliance would not reasonably be expected to have, individually or in the aggregate, a going concern Company Material Adverse Effect) and (3iii) use its commercially reasonable efforts to preserve intact its business organizations and relationships with Third Parties and keep available the services of its current present officers and key employees and to preserve employees. Without limiting the goodwill generality of and maintain satisfactory relationships with those Persons having material business relationships the foregoing, except with the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed), as contemplated by this Agreement or set forth in Section 6.01 of the Company and its SubsidiariesDisclosure Letter, and (B) the Company shall not, and nor shall cause each it permit any of its Subsidiaries not to:
(a) amend the Company’s its certificate of incorporation or bylawsincorporation, or amend any certificate of incorporation or bylaws, bylaws or other comparable charter or similar organizational documents, of the Company’s Subsidiaries;
(b) other than with respect to a direct or indirect wholly owned Subsidiary of the Company, (i) establish a record date forsplit, combine or reclassify any shares of its capital stock, (ii) declare, set aside or pay any dividends on, dividend or make any other distributions distribution (whether in cash, stock, stock or property or otherwiseany combination thereof) in respect ofof its capital stock, or enter into any agreement with respect to the voting of, any capital stock of the Company or except for dividends by any of its wholly-owned Subsidiaries (or securities convertible or exchangeable therefor), (ii) split, reverse split, combine, subdivide or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) of the Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c)redeem, issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), or (iv) purchase, redeem repurchase or otherwise acquire or offer to purchaseredeem, redeem repurchase, or otherwise acquire any Company Securities or any Company Subsidiary Securities except pursuant to any Company Stock Plan;
(c) (i) grant, issue, deliver or sell, or authorize the grant, issuance, delivery or sale of, any shares of any Company Securities or Company Subsidiary Securities, except for other than the net settlement issuance of Company Equity Awards or acquisitions of (A) any shares of the Company Common Stock by upon the Company, in each case, in satisfaction by holders exercise of outstanding Company Equity Awards of the applicable withholding taxes or Stock Options in accordance with the terms of the ESPP;
such Company Stock Options, (cB) issue, deliver, sell, grant, announce, pledge, transfer, subject any Company Restricted Shares and Company Restricted Stock Units to any Lien, otherwise encumber or dispose of any equity interests directors of the Company or incur in the ordinary course consistent with past practices, and (C) any obligation to make any payments to any Person based on the price or value of any Company Securities, other than (i) the issuance of shares of earned Company Common Stock pursuant Performance Shares that have been granted prior to (A) the terms of Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement or (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance amend any term of shares of any Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement Security or (iii) the issuance of equity interests of a wholly owned any Company Subsidiary of the Company to the Company or another wholly owned Subsidiary of the CompanySecurity;
(d) mergeacquire (by merger, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, any assets, securities, properties, interests or businesses having a value (i) in excess of Two Million Dollars ($2,000,000) individually, or Five Million Dollars ($5,000,000) in the aggregate, from any other Person, (ii) merge or consolidate orwith any other Person or (iii) adopt a plan of complete or partial liquidation, dissolution, recapitalization, restructuring merger or other than reorganization;
(e) sell, lease, license or otherwise transfer any Subsidiary or any amount of assets, securities, properties, interests or businesses, having a value in excess of Two Million Dollars ($2,000,000) individually, or Five Million Dollars ($5,000,000) in the aggregate, except (i) pursuant to existing contracts or commitments disclosed in the Company Disclosure Letter, and (ii) in the ordinary course of business substantially consistent with past practicepractices in an amount not to exceed Eight Million Dollars ($8,000,000) in the aggregate;
(f) make any loans, enter into strategic alliance advances or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement ofcapital contributions to, or resolutions providing investments in, any other Person in excess of One Million Dollars ($1,000,000) either by purchase of stock or securities, contributions to capital, property transfer, purchase of any property or assets of any Person or otherwise (other than (i) loans or advances between and among the Company and/or any of its wholly-owned Subsidiaries made in the ordinary course of business consistent with past practices and (ii) capital contributions to or investments in wholly-owned Subsidiaries made in the ordinary course of business consistent with past practices);
(g) create, assume, incur or otherwise be liable with respect to any indebtedness for borrowed money or authorizingguarantees thereof (or amend and restate or refinance any existing indebtedness for borrowed money), complete other than (i) (A) up to Twenty-Five Million Dollars ($25,000,000) of indebtedness under lines of credit existing on the date of this Agreement, (B) any indebtedness or partial bankruptcyguarantee (including any lease guarantee) incurred in the ordinary course of business consistent with past practices in an amount not to exceed Five Million Dollars ($5,000,000) in the aggregate, liquidationor (ii) indebtedness incurred between or among the Company and/or any of its wholly-owned Subsidiaries made in the ordinary course of business consistent with past practices or between any of such wholly-owned Subsidiaries or guarantees by the Company of indebtedness of any wholly-owned Subsidiary made in the ordinary course of business consistent with past practices;
(h) prepay, dissolutionredeem, mergerrepurchase, consolidationdefease, restructuringcancel or otherwise terminate (or amend, recapitalization restate or other reorganization refinance any existing indebtedness for borrowed money) any indebtedness for borrowed money of the Company or any of its Subsidiaries;
(e) (i) increase the salary, wages, benefits, bonuses or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) as required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect by Applicable Law and except as of the date hereof, (B) required under any Company Employee Plan pursuant Plan, (i) grant or increase any severance or termination pay to (or amend any existing severance pay or termination arrangement with) any Company Employee or director of the terms in effect Company or any Subsidiary, (ii) increase benefits payable under any severance or termination pay policies or employment agreements existing as of the date hereof of this Agreement, (iii) enter into any employment, deferred compensation, retention or other similar agreement (or any amendment to any such existing agreement) with any Company Employee or directors of the Company or any Subsidiary, (iv) establish, adopt or amend any Collective Bargaining Agreement or under Applicable LawCompany Employee Plan, or (Cv) made increase compensation, bonus or other benefits payable to any Company Employee or director of the Company or any Subsidiary other than (A) annual salary increases in the ordinary course of business and substantially consistent with past practice, ; (B) increases in amounts in accounts under the Executive Plan resulting from the annual salary increases described in (A); or (DC) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required contemplated by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits underSection 7.05(f), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
(i) sell, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregate, except in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice;
(j) agree to any exclusivitychange the Company’s methods of accounting or accounting principles or practices, nonexcept as required by concurrent changes in GAAP or in Regulation S-competition or similar provision or covenant limiting the ability X of the Company or any of 1934 Act approved by its Subsidiaries to compete or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Timeindependent public accountants;
(k) adopt make or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file adopt or change any material amended method of Tax Return or file accounting, amend any material Tax Return in a manner inconsistent with past practiceReturns or file claims for material Tax refunds, enter into any “material closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceedingclaim, audit or assessment, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, liability or consent to any extension or waiver of the limitations period applicable to take any material position on any Tax claim Return filed on or assessment outside after the ordinary course date of businessthis Agreement or adopt any material accounting method that is inconsistent with elections made, positions taken or methods used in preparing or filing similar Tax Returns in prior periods;
(nl) make any commitment with capital expenditure, or incur any obligation or liability in respect to thereof, other than those capital expenditures expenditure projects that are (i) not in excess of the amounts set forth in Part 6.01(n)(iFour Million Dollars ($4,000,000) of the Company Disclosure Schedule;
(o) institute, settle or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business aggregate or (ii) Proceedings brought against contemplated by the Company’s 2016 fiscal year forecast, which forecast has been made available to Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Subon February 22, 2016;
(pm) enter into create or incur any Lien on any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) asset other than in the ordinary course of business or as contemplated by this Agreement consistent with past practices;
(n) enter into (i) amend, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract contract that would have been a Company Material Contract if in existence were the Company a party or subject thereto on the date of this AgreementAgreement other than entry into renewals of existing Company Material Contracts in the ordinary course of business consistent with past practices (but in no event, for terms of more than twenty-four (24) months) or (ii) renew or enter into any Contract with an Affiliate of the Companylease agreement for real property;
(so) voluntarily terminate or amend in any material respect any Company Material Contract or Real Property Lease, or waive, release or assign any material right, claims or benefit of the Company thereunder, except for such terminations, amendments, waivers, releases or assignments in the ordinary course of business consistent with past practices;
(p) terminate, renew, suspend, abrogate, amend or fail to renew or preserve modify in any material respect any Company Communications License as set forth on Part 6.01(s) Permit other than in the ordinary course of the Company Disclosure Schedulebusiness consistent with past practices;
(tq) conduct settle, or offer or propose to settle, any reduction-in-force of employees litigation, investigation, arbitration, proceeding or other service providers claim involving or otherwise implement any layoffs, in each case that could implicate the WARN Act; or
(u) authorize, commit or agree to take any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with against the Company or any Subsidiary involving a payment by the Company or any Subsidiary in excess of One Million Five Hundred Thousand Dollars ($1,500,000) individually or Three Million Dollars ($3,000,000) in the aggregate;
(r) fail to use commercially reasonable efforts to maintain existing material insurance policies or comparable replacement policies; or
(s) except as, in the reasonable judgment of the Company (including Company, is necessary to comply with the ongoing requirements of the 1934 Act or prepare or make any COVID-19 Measures) filings with the SEC agree, resolve or (y) respond commit to third-party supply or service disruptions caused by do any of the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentenceforegoing.
Appears in 2 contracts
Samples: Merger Agreement (Amc Entertainment Inc), Merger Agreement (Carmike Cinemas Inc)
Conduct of the Company. The From the date of this Agreement until the Effective Time, the Company covenants and agrees thatits Subsidiaries shall, except for matters (i) expressly permitted or expressly contemplated by subject to the last sentence of this AgreementSection 5.1, (ii) set forth on Part 6.01 conduct their business in the ordinary course consistent with past practice and shall use their reasonable best efforts to preserve intact their business organizations and relationships with third parties. Without limiting the generality of the Company Disclosure Scheduleforegoing and subject to the last sentence of this Section 5.1, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken with the prior written consent of Parent (which shall not be unreasonably withheld, conditioned ) or delayed), (v) required as contemplated by Applicable Law this Agreement or the rules and regulations of NasdaqOption Agreements, from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereof, until the Company (A) shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) conduct its business in the ordinary course in all material respects, substantially consistent with past practice, (2) to the extent consistent with the foregoing clause (1), maintain its business as a going concern and (3) keep available the services of its current officers and key employees and to preserve the goodwill of and maintain satisfactory relationships with those Persons having material business relationships with the Company and its Subsidiaries, and (B) shall not, and shall cause each of its Subsidiaries not toEffective Time:
(a) amend the Company’s Company will not, and will not permit any of its Subsidiaries to, adopt or propose any change in its certificate of incorporation or bylaws, or amend any certificate of incorporation or bylaws, or other comparable charter or organizational documents, of the Company’s Subsidiariesby-laws;
(b) other than with respect to a direct or indirect wholly owned Subsidiary of the Company, (i) establish a record date for, declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock, property or otherwise) in respect of, or enter into any agreement with respect to the voting of, any capital stock of the Company or will not, and will not permit any of its Subsidiaries (or securities convertible or exchangeable therefor), (ii) split, reverse split, combine, subdivide or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) of the Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c), issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), or (iv) purchase, redeem or otherwise acquire or offer to purchase, redeem or acquire any Company Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPP;
(c) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company Securities, other than (i) the issuance of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement or (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company;
(d) mergeto, consolidate or, other than in the ordinary course of business substantially consistent with past practice, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, of complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its SubsidiariesSubsidiaries (other than transactions between direct and/or indirect wholly owned Subsidiaries of the Company);
(ec) the Company will not, and will not permit any Subsidiary of the Company to, issue, sell, transfer, pledge, dispose of or encumber any shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any class or series of the Company or its any of its Subsidiaries other than (i) increase the salary, wages, benefits, bonuses or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made issuances of Company Common Stock pursuant to the exercise of Company Stock Options that are outstanding on the date of this Agreement, or pursuant to Company Stock Options or other stock based awards granted in accordance with clause (ii) below and (ii) additional Company Stock Options or other stock-based awards to acquire shares of Company Common Stock granted under the terms of existing employment any employee or other director stock option or compensation agreements plan or arrangements arrangement of the Company as in effect as of on the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining this Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice;
(d) the Company will not (i) split, combine, subdivide or reclassify its outstanding shares of capital stock, or (Dii) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock other than, subject to Sections 7.4 and 7.9, regular quarterly cash dividends payable by the Company in respect of shares of Company Stock consistent with past practice;
(e) the Company will not, and will not permit any Subsidiary of the Company to, redeem, purchase or otherwise acquire directly or indirectly any of the Company's capital stock, Company Convertible Securities or Company Subsidiary Convertible Securities, except for repurchases, redemptions or acquisitions (x) required by or in connection with changes to benefits the terms of any Company Stock Plan or (y) in accordance with any dividend reinvestment plan as part in effect on the date of annual enrollment; provided that such changes made as part of annual enrollment are made this Agreement in the ordinary course of businessthe operations of such plan consistent with past practice and, in the case of each of (x) and (iiy) other than as required by above, only to the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereofextent consistent with Section 7.4;
(f) hire, engage the Company will not amend the terms (including the terms relating to accelerating the vesting or terminate the employment lapse of repurchase rights or engagement obligations) of (any employee or director stock options or other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000stock based awards;
(g) negotiatethe Company will not, and will not permit any Subsidiary of the Company to, (i) grant any severance or termination pay to (or amend any such existing arrangement with) any director, officer or employee of the Company or any of its Subsidiaries, (ii) enter intointo any employment, amend deferred compensation or extend other similar agreement (or any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution amendment to any Person such existing agreement) with any director, officer or division thereofemployee of the Company or any of its Subsidiaries, whether (iii) increase any benefits payable under any existing severance or termination pay policies or employment agreements, (iv) increase (or amend the terms of) any compensation, bonus or other benefits payable to directors, officers or employees of the Company or any of its Subsidiaries or (v) permit any director, officer or employee who is not already a party to an agreement or a participant in whole a plan providing benefits upon or following a "change in part (and whether by purchase of stockcontrol" to become a party to any such agreement or a participant in any such plan, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregatecase of each of clauses (i) through (iv), other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business consistent with past practice but subject to Sections 7.4 and 7.9 and, in amounts substantially the case of the establishment of any retention and/or pay-to-stay plans or individual severance arrangements that the Company reasonably believes to be appropriate, after notice to Parent and the Company's good-faith effort to obtain Parent's approval;
(h) the Company will not, and will not permit any of its Subsidiaries to, acquire a material amount of assets or property of any other Person except in the ordinary course of business consistent with past practice;
(i) other than as contemplated by Section 7.1, the Company will not, and will not permit any of its Subsidiaries to, sell, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse license or otherwise dispose of any assets, properties, material amount of assets or Company Intellectual Property, in each case having a value in excess of $500,000 individually property except pursuant to existing contracts or $5,000,000 in the aggregate, commitments and except in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice;
(j) agree to except for any exclusivitysuch change which is not material or which is required by reason of a concurrent change in GAAP, non-competition or similar provision or covenant limiting the ability Company will not, and will not permit any Subsidiary of the Company to, change any method of accounting or accounting practice (other than any change for tax purposes) used by it;
(k) the Company will not, and will not permit any Subsidiary of the Company to, enter into any material joint venture, partnership or other similar arrangement;
(l) the Company will not, and will not permit any of its Subsidiaries to compete to, take any action that would make any representation or engage warranty of the Company hereunder inaccurate in any line material respect at, or as of businessany time prior to, the Effective Time;
(m) the Company will not enter into any standstill agreement, or amend or waive any provisions of, or grant any approval under, any standstill agreement; provided that the Board of Directors of the Company may grant a waiver of provisions of, or approval under, a standstill agreement with any Person or in any geographic area, or pursuant solely to which any benefit or right would be required permit such Person to be given or lost as make a result Superior Proposal if the Board of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers Directors of the Company and determines in its Subsidiaries good faith judgment, after receiving the advice of outside legal counsel, that, in light of the Superior Proposal, there is a reasonable possibility that the Board of Directors would be in violation of its fiduciary duties under applicable law if it failed to grant such waiver;
(n) the Company will not make or similar arrangementschange any material Tax election, that (x) are made settle any material audit or file any material amended Tax Returns, except in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;; and
(o) institute, settle or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor will not, and will not permit any of its Subsidiaries shall settle to, agree or agree commit to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than in the ordinary course of business or as contemplated by this Agreement (i) amend, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an Affiliate of the Company;
(s) voluntarily terminate, amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Act; or
(u) authorize, commit or agree to take do any of the foregoing actionsforegoing. Notwithstanding anything set forth in this Agreement or any other documents related the foregoing but subject to Section 7.4, from the Merger, prior to date hereof until the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In additionEffective Time, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond make acquisitions of property, assets or any business (other than pursuant to emergencies a merger or protect the health and safety of consolidation with or into the Company’s ) solely for cash so long as no one acquisition or any Subsidiary’s employeesseries of related acquisitions involves the payment of consideration in an amount in excess of $ 500 million, suppliersand all acquisitions pursuant to this clause (x) do not involve the payment of consideration in excess of $ 500 million, customers in the aggregate, and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply sell, transfer or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that otherwise dispose of assets or property so long as the Company shalland its Subsidiaries do not sell, transfer and otherwise dispose of assets and property pursuant to this clause (y) having a fair market value in excess of $ 500 million, in the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentenceaggregate.
Appears in 2 contracts
Samples: Merger Agreement (Honeywell Inc), Merger Agreement (Alliedsignal Inc)
Conduct of the Company. The Company covenants and agrees that, except for matters (i) expressly permitted or Except as expressly contemplated or permitted by this Agreement, (ii) set forth on Part 6.01 described in Section 5.01 of the Company Disclosure ScheduleSchedule or approved in writing by Parent, (iii) reasonably undertaken from the date of this Agreement until the time that the designees of Merger Sub have been appointed to the Board of Directors of the Company in connection accordance with any COVID-19 Measures, (iv) undertaken with the prior written consent of Parent (which shall not be unreasonably withheld, conditioned or delayedSection 1.01(d), (v) required by Applicable Law or the rules and regulations of NasdaqCompany will conduct its business in the ordinary course consistent with past practice. Subject to the foregoing exceptions, from the date hereof until the earlier time that the designees of Merger Sub have been appointed to the Board of Directors of the Effective Time and the termination of this Agreement in accordance with Article 8 hereof, the Company (A) shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) conduct its business in the ordinary course in all material respects, substantially consistent with past practice, (2) to the extent consistent with the foregoing clause (1), maintain its business as a going concern and (3) keep available the services of its current officers and key employees and to preserve the goodwill of and maintain satisfactory relationships with those Persons having material business relationships with the Company and its Subsidiaries, and (B) shall not, and shall cause each of its Subsidiaries not toCompany:
(a) amend the Company’s Company will not adopt or approve any amendment to its certificate of incorporation or bylaws, or amend any certificate of incorporation or bylaws, or other comparable charter or organizational documents, of the Company’s Subsidiaries;
(b) the Company will not (i) acquire any amount of capital stock of any other Person; (ii) acquire any assets of any other Person other than in the ordinary course of business consistent with past practice; (iii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise become responsible for, the obligations of any person, or make any loans or advances, or grant or suffer to exist any Lien on any of its assets except in the ordinary course of business and consistent with past practice; (iv) enter into any contract or agreement other than in the ordinary course of business and consistent with past practice; (v) authorize, or make any commitment with respect to, any single capital expenditure which is in excess of $250,000 or capital expenditures which are, in the aggregate, in excess of $1,000,000 for the Company and its Subsidiaries taken as a whole; or (vi) enter into or amend any contract, agreement, commitment or arrangement with respect to a direct or indirect wholly owned Subsidiary of any matter set forth in this Section 5.01(b);
(c) the Company, (i) establish a record date for, Company will not declare, set aside or pay any dividends ondividends, or make any other distributions (whether in cash, stock, property or otherwise) in respect of, of shares of Common Stock or enter into any agreement with respect to the voting of, any other capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), (ii) split, reverse split, combine, subdivide or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) of the Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c), issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor)Company, or (iv) purchaseredeem, redeem repurchase or otherwise acquire or offer to purchase, redeem or acquire any Company Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPP;
(c) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company Securities, other than (i) the issuance of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement or (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary capital stock of the Company;
(d) mergethe Company will not (i) issue, consolidate ordeliver, sell or grant or authorize the issuance, delivery, sale or grant of, any Common Stock or other capital stock of the Company 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, other than the issuance of shares of Common Stock upon the exercise of Company Options and the Company Warrants granted prior to the date hereof, (ii) split, combine, reclassify, redeem or purchase or otherwise acquire, directly or indirectly any shares of Common Stock or other capital stock of the Company, or (iii) amend the terms of the Common Stock or any other capital stock of the Company;
(e) except to the extent required by Applicable Law or by existing written agreements or plans disclosed in the Company SEC Reports or in the Company Disclosure Schedule, the Company will not increase in any manner the compensation or fringe benefits of any of its directors, officers or employees (other than annual increases, in the ordinary course of business consistent with past practices, in the compensation or fringe benefits of any employees who are not executive officers), pay any pension or retirement allowance to any such directors, officers or employees, become a party to, amend or commit itself to any pension, retirement, profit-sharing, welfare benefit plan or employment agreement with or for the benefit of any such director, officer or employee, grant any severance or termination pay or stay-in-place bonus to any such director or officer, increase the benefits payable under any existing severance or termination pay or stay-in-place bonus policies or make any discretionary equity or equity-based award to such director, officer or employee;
(f) the Company will not make, change or rescind any material Tax election, settle or compromise any material federal, state, local or foreign Tax liability, file any amended Tax Return, enter into any closing agreement relating to Taxes, waive or extend the statute of limitations in respect of Taxes (other than pursuant to extensions of time to file Tax Returns obtained in the ordinary course of business), or surrender any right to claim for a Tax Refund;
(g) the Company will not change its accounting procedures and practices in any material respects, except to the extent required by changes in generally accepted accounting principles;
(h) the Company will not permit any item of Intellectual Property Rights owned by the Company to lapse or to be abandoned or disclaimed, fail to perform or make any applicable filings, recordings or other similar actions or filings, or fail to pay all required fees and taxes required or advisable to maintain and protect its interest in each and every Intellectual Property Right owned by the Company;
(i) the Company will not fail to make in a timely manner any filings with the SEC required under the Securities Act or the Exchange Act or the rules and regulations promulgated thereunder;
(j) except in the ordinary course of business and consistent with past practice, the Company will not pay, discharge or satisfy any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise);
(k) the Company will not amend, modify or consent to the termination of any Material Contract, or amend, waive, modify or consent to the termination of any material rights thereunder, other than in the ordinary course of business substantially and consistent with past practice, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries;
(e) (i) increase the salary, wages, benefits, bonuses or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
(i) sell, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregate, except in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice;
(j) agree to any exclusivity, non-competition or similar provision or covenant limiting the ability of the Company or any of its Subsidiaries to compete or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);and
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;
(o) institute, settle or will not agree to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than in the ordinary course of business or as contemplated by this Agreement (i) amend, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an Affiliate of the Company;
(s) voluntarily terminate, amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Act; or
(u) authorize, commit or agree to take do any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to and the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any Company will cause each of its subsidiaries, or Subsidiaries not to do any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentenceforegoing.
Appears in 2 contracts
Samples: Merger Agreement (Cit Group Inc), Agreement and Plan of Merger (Education Lending Group Inc)
Conduct of the Company. The Company covenants and agrees thatFrom the date hereof until the Effective Time, except for matters (i) expressly permitted as required to effect this Agreement or expressly contemplated by this Agreement, (ii) as set forth on Part in Section 6.01 of the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken Schedule and except with the prior written consent of Parent (Parent, which consent shall not be unreasonably withhelddelayed, conditioned or delayed)withheld, (v) required by Applicable Law or the rules Company and regulations its Subsidiaries shall conduct their business in the ordinary course consistent with past practice and shall use their reasonable efforts to preserve intact their business organizations and relationships with third parties and to keep available the services of Nasdaqtheir present officers and employees. Without limiting the generality of the foregoing, from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereof, the Company (A) shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) conduct its business in the ordinary course in all material respects, substantially consistent with past practice, (2) to the extent consistent with the foregoing clause (1), maintain its business as a going concern and (3) keep available the services of its current officers and key employees and to preserve the goodwill of and maintain satisfactory relationships with those Persons having material business relationships with the Company and its Subsidiaries, and (B) shall not, and shall cause each of its Subsidiaries not toTime:
(a) amend neither the Company’s Company nor any of its Subsidiaries will adopt or propose any change in its certificate of incorporation or bylaws, or amend any certificate of incorporation or bylaws, or other comparable charter or organizational documents, of the Company’s Subsidiaries;
(b) other than with respect to a direct or indirect wholly owned Subsidiary of the Company, (i) establish a record date for, declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock, property or otherwise) in respect of, or enter into any agreement with respect to the voting of, any capital stock of neither the Company or nor any of its Subsidiaries (or securities convertible or exchangeable therefor), (ii) split, reverse split, combine, subdivide or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) of the Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c), issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), or (iv) purchase, redeem or otherwise acquire or offer to purchase, redeem or acquire any Company Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPP;
(c) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company Securities, other than (i) the issuance of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement or (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company;
(d) merge, consolidate or, other than in the ordinary course of business substantially consistent with past practice, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or will adopt a plan or agreement of, or resolutions providing for or authorizing, of complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its SubsidiariesSubsidiaries (other than the Merger);
(ec) neither the Company nor any of its Subsidiaries will adopt or (iexcept as required pursuant to any Plan) increase the salarypay, wagesgrant, benefitsissue, bonuses accelerate or accrue salary or other cash compensation payable payments or benefits pursuant to become payable any pension, profit-sharing, bonus, extra compensation, incentive, deferred compensation, stock purchase, stock option, stock appreciation right, group insurance, severance pay, retirement or other employee benefit plan, agreement or arrangement, or any employment or consulting agreement with or for the benefit of any director, officer, employee, agent or consultant, whether past or present; or, except as required by law, amend in any material respect any such existing plan, agreement or arrangement in a manner inconsistent with the foregoing;
(d) neither the Company nor any of its Subsidiaries shall enter into any contract or transaction relating to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms purchase of existing employment or material assets other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made than in the ordinary course of business and substantially consistent with past practiceprior practices;
(e) neither the Company nor any of its Subsidiaries will (i) materially change any of the accounting methods used by it unless required by GAAP or (ii) make any material election relating to Taxes or change any material election relating to Taxes already made;
(f) neither the Company nor any of its Subsidiaries will issue, deliver, sell, pledge, dispose of or encumber, or authorize or commit to the issuance, sale, pledge, disposition or encumbrance of, (Di) in connection with changes any shares of capital stock of any class, or any options, warrants, convertible securities or other rights of any kind to benefits acquire any shares of capital stock, or any other ownership interest (including, but not limited to, stock appreciation rights or phantom stock), of the Company or any of its Subsidiaries (except for the issuance of up to approximately 1,001,785 shares of Company Common Stock required to be issued pursuant to outstanding grants, awards and elections under the terms of the Company's Stock Option Plans, Performance Award Plan, Employee Stock Option (Purchase) Plan and phantom stock programs as part of annual enrollment; provided that such changes made as part June 15, 1999) or (ii) any assets of annual enrollment are made the Company or any of its Subsidiaries, except for sales of inventory in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;.
(g) negotiateneither the Company nor any of its Subsidiaries shall declare, enter intoset aside, amend make or extend pay any Collective Bargaining Agreementdividend or other distribution, whether payable in cash, stock, property or otherwise, with respect to its capital stock;
(h) neither the Company nor any of its Subsidiaries shall reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock;
(i) neither the Company nor any of its Subsidiaries shall (i) acquire (by merger, consolidation or commit to acquire acquisition of stock or assets) any businesscorporation, assetspartnership or other business organization or division thereof; (ii) incur any indebtedness for borrowed money or issue any debt securities or assume, real property guarantee or capital stock ofendorse, or otherwise as an accommodation become responsible for, the obligations of any Person, or make any loans, advances or capital contribution to contributions to, or investments in any Person or division thereofother Person, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, each case other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
practice under the Company's existing Revolving Credit Agreement with National City Bank in an amount such that the aggregate outstanding balance under the Revolving Credit Agreement shall not exceed $40 million; (iiii) sellenter into any contract or agreement other than in the ordinary course of business consistent with past practice that is material to the Company and its Subsidiaries, assign, lease, license, pledge, transfer, abandon, subject to taken as a whole; or (iv) authorize any Lien, permit to lapse or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value single capital expenditure which is in excess of $500,000 individually or $5,000,000 capital expenditures which are, in the aggregate, in excess of $5 million for the Company and its Subsidiaries taken as a whole;
(j) except to the extent required under existing employee and director benefit plans, agreements or arrangements as in effect as of the date of this Agreement, neither the Company nor any of its Subsidiaries shall increase the compensation or fringe benefits of any of its directors, officers or employees, except for increases in salary or wages of employees of the Company or its Subsidiaries who are not officers of the Company in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent in accordance with past practice;
(j) agree , or grant any severance or termination pay not currently required to be paid under existing severance plans to, or enter into any exclusivityemployment, non-competition consulting or similar provision severance agreement or covenant limiting the ability arrangement with, any present or former director, officer or other employee of the Company or any of its Subsidiaries to compete or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;
(o) institute, settle or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree compromise any pending or threatened suit, action or claim which is material or which relates to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Subtransactions contemplated hereby;
(pl) enter into neither the Company nor any material new line of business;
its Subsidiaries shall pay, discharge or satisfy any claims, liabilities or obligations (q) fail to maintain in all material respects any Insurance Policies;
(r) absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction (i) in the ordinary course of business and consistent with past practice of liabilities reflected or as contemplated by this Agreement reserved against in the Financial Statements or incurred in the ordinary course of business and consistent with past practice and (iii) amendof liabilities required to be paid, modify, renew discharged or terminate, or grant any release or waiver under, any Material Contract (excluding satisfied pursuant to the expiration terms of any Material Contract in accordance with its terms) contract or enter into any new Contract that would have been a Material Contract if agreement in existence on the date hereof;
(m) the Company will not, and will not permit any of this Agreementits Subsidiaries to, (i) take or agree or commit to take any action that would make any representation and warranty of the Company hereunder inaccurate in any material respect at or as of any time prior to the Effective Time or (ii) renew omit or enter into agree or commit to omit to take any Contract with an Affiliate action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time; and
(n) the Company will not, and will not permit any of its Subsidiaries to, (i) take or agree or commit to take any action that would cause any of the Company;
(s) voluntarily terminate, amend or fail conditions to renew or preserve any Company Communications License as the Offer set forth on Part 6.01(sin Annex I hereto not to be satisfied, (ii) omit or agree or commit to omit to take any action necessary to cause any of the Company Disclosure Schedule;
conditions to the Offer set forth in Annex I hereto to be satisfied or (tiii) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffstake, in each case that could implicate the WARN Act; or
(u) authorize, commit omit to take or agree to take or omit to take any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions action described in this sentenceSections 6.01(a) through 6.01(m) above.
Appears in 2 contracts
Samples: Merger Agreement (Holophane Corp), Merger Agreement (National Service Industries Inc)
Conduct of the Company. The Company covenants and agrees that, except for matters Except (iv) expressly permitted or expressly contemplated by this Agreement, (ii) set forth on Part 6.01 of the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken with the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed), (vw) as expressly required or contemplated by this Agreement, (x) as set forth in Section 6.01 of the Company Disclosure Schedule or (y) as required by Applicable Law or the rules and regulations of Nasdaq, from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereofLaw, the Company (Aa) shall, and shall cause each of its Subsidiaries to to, use commercially reasonable efforts to (1) conduct its business in the ordinary course in all material respects, substantially consistent with past practicepractices (provided that in the case of this clause (a), (2) no action with respect to the extent consistent with matters addressed by any subclause of the foregoing following clause (1b) shall constitute a breach of clause (a) unless any such action would constitute a breach of such subclause of the following clause (b), maintain its business as a going concern ) and (3) keep available the services of its current officers and key employees and to preserve the goodwill of and maintain satisfactory relationships with those Persons having material business relationships with the Company and its Subsidiaries, and (Bb) shall not, and shall cause each not permit any of its Subsidiaries not to:
(ai) amend the Company’s certificate its articles of incorporation or bylawsorganization, or amend any certificate of incorporation or bylaws, bylaws or other comparable charter or similar organizational documents, other than immaterial amendments to organizational documents of the Company’s SubsidiariesSubsidiaries that do not adversely affect Parent in any respect;
(bii) other than with respect to a direct (A) split, combine or indirect wholly owned Subsidiary reclassify any shares of the Companyits capital stock, (iB) establish a record date for, declare, set aside or pay any dividends on, dividend or make any other distributions distribution (whether in cash, stock, stock or property or otherwiseany combination thereof) in respect ofof its capital stock, except for dividends or enter into other such distributions by any agreement with respect of its wholly owned Subsidiaries to the voting of, any capital stock Company or to another wholly owned subsidiary of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor)C) redeem, (ii) split, reverse split, combine, subdivide or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) of the Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c), issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), or (iv) purchase, redeem repurchase or otherwise acquire or offer to purchaseredeem, redeem repurchase, or otherwise acquire any Company Securities or any Company Subsidiary Securities, except for the acquisition of or repurchase of Company Common Stock required or permitted by the terms of any award agreements under the Company Stock Plans in order to effectuate a vesting, net exercise or net settlement of Company Equity Awards RSAs, Company PSAs or acquisitions Company Options, as applicable;
(iii) (A) issue, deliver or sell, or authorize the issuance, delivery or sale of, any shares of any Company Securities or Company Subsidiary Securities, other than the issuance of (1) any shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPP;
(c) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber or dispose of any equity interests of award agreements under the Company or incur any obligation to make any payments to any Person based on Stock Plans upon the price or value of any Company Securities, other than (i) the issuance of shares exercise of Company Common Stock pursuant Options or the vesting or satisfaction of performance conditions applicable to (A) the terms of Company Equity Awards RSAs or Company PSAs that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement and (2) any Company Subsidiary Securities to the Company or any other Subsidiary of the Company or (B) grants amend any term of any Company Security or awards of any Company Securities or Company Equity Awards Subsidiary Security, except as required to be made pursuant to by the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance of shares of any Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the CompanyPlan;
(div) merge, consolidate or, other than in the ordinary course of business substantially consistent with past practice, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, of complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries;
(ev) acquire (i) increase the salaryby merger, wagesconsolidation, benefitsacquisition of stock or assets or otherwise), bonuses directly or indirectly, any material amount of assets, securities, properties, interests or businesses, other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases than (A) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements any Material Contract set forth in effect as Section 4.20(a) of the date hereofCompany Disclosure Schedule or (B) the acquisition of inventory, supplies or materials in the ordinary course of business consistent with past practices;
(vi) sell, lease, license or otherwise transfer or dispose of any of its material assets, securities, properties, interests or businesses, other than (A) pursuant to any Material Contract set forth in Section 4.20(a) of the Company Disclosure Schedule or (B) sales of inventory for fair consideration in the ordinary course of business consistent with past practices;
(vii) other than in connection with actions permitted by Section 6.01(b)(iii), make any loans, advances or capital contributions to, or investments in, any other Person (other than (A) advances of business expenses to employees in the ordinary course of business consistent with past practices, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made accounts receivable from customers in the ordinary course of business and substantially consistent (C) loans or advances among the Company and any of its wholly owned Subsidiaries and capital contributions to or investments in its wholly owned Subsidiaries);
(viii) (A) amend or modify, extend, terminate, negotiate or enter into, any collective bargaining agreement or other contract with past practicea union, works council, labor organization, or other employee representative (each a “Labor Agreement”), or (DB) in connection with changes to benefits recognize or certify any labor union, labor organization, works council, or group of employees as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required by the terms bargaining representative for any employees of the applicable Company Employee Plan or under Applicable Lawany of its Subsidiaries;
(ix) implement or announce any employee layoffs, enter intoplant closings, adoptreductions in force, amend (including by accelerating furloughs, temporary layoffs, salary or wage reductions, work schedule changes or other such actions that could reasonably be expected to implicate the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereofWARN Act;
(fx) hireincur any indebtedness for borrowed money or guarantees thereof, engage or terminate the employment or engagement of (other than for cause, as determined by the Company(A) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds in an amount not to exceed $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 10,000,000 in the aggregate, other than one or more acquisitions of inventory(B) capital leases, supplies, intellectual property assets, raw materialspurchase money financing for personal property, equipment or similar assets financing and letters of credit in the ordinary course of business and in amounts substantially consistent with past practicepractices or (C) indebtedness incurred between the Company and any of its wholly owned Subsidiaries or between any of such wholly owned Subsidiaries or guarantees by the Company of indebtedness of any wholly owned Subsidiary of the Company;
(ixi) sell, assign, lease, license, pledge, transfer, abandon, subject engage in any sale-leaseback or similar transaction with respect to the Owned Real Property;
(xii) amend in any Lien, permit to lapse material respect or otherwise dispose waive any of its material rights under any assets, propertiesMaterial Contract, or enter into any contract that would, if entered into prior to the date hereof, constitute a Material Contract;
(xiii) settle (A) any litigation, arbitration or Proceeding involving or against the Company Intellectual Propertyor any of its Subsidiaries, in each case having a value other than settlements or waivers that (1) involve only cash payments by the Company or any of its Subsidiaries not in excess of $500,000 individually or $5,000,000 1,000,000 in the aggregateaggregate and (2) do not involve any injunctive relief against the Company or any of its Subsidiaries, except admission of guilt or wrongdoing or other restrictions on business activities that could be expected to limit the Company or any of its Subsidiaries in the ordinary course conduct of their business in any respect or (B) any litigation, arbitration or Proceeding set forth in Section 6.01(b)(xiii) of the Company’s or its Subsidiaries’ business substantially consistent with past practiceCompany Disclosure Schedule;
(jxiv) agree abandon, withdraw, terminate, suspend, abrogate, amend or modify in any material respect any material Permits of the Company and its Subsidiaries in a manner adverse to the business of the Company and its Subsidiaries;
(xv) cancel, materially reduce, terminate or fail to maintain in effect without replacing material insurance policies covering the Company and its Subsidiaries and their respective properties, assets and businesses;
(xvi) except as required under the terms of any Company Plan or any Labor Agreement in effect on the date hereof, (A) increase the compensation or benefits to be paid or provided to any exclusivityCompany Service Provider or former Company Service Provider, non-competition (B) grant or similar provision award any bonus or covenant limiting incentive compensation to any Company Service Provider or former Company Service Provider, (C) enter into, establish, adopt, terminate, modify or amend any Company Plan, (D) take any action for the ability purpose of accelerating any payment, vesting, or funding of any compensation or benefits, payable, or to become payable, to any Company Service Provider or former Company Service Provider, (E) hire or terminate (other than for cause) any Company Service Provider with annual base compensation in excess of $150,000, (F) withdraw (whether partially or completely) from any Multiemployer Plan or incur any withdrawal liability (within the meaning of Title IV of ERISA) with respect to any Multiemployer Plan, or (G) commence an obligation of the Company or any of its Subsidiaries to compete or engage in any line of business, with any Person or in any geographic area, or pursuant contribute to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective TimeMultiemployer Plan;
(kxvii) adopt change the Company’s fiscal year or change any the Company’s methods of the accounting methods used by the Company materially affecting its assets, liabilities or businessaccounting, except for such changes that are as required by (i) concurrent changes in GAAP (or any interpretation thereof), (ii) by any Applicable Law, including in Regulation S-X under of the Securities 1934 Act, or (iii) as agreed to by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization)its independent public accountants;
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (ivxviii) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file make any material amended change in its method of Tax Return accounting, settle or file compromise any material Tax Return in a manner inconsistent with past practiceclaim, enter into any “closing agreement” within the meaning of Section 7121 of the Code (audit or similar provision of stateassessment, local or non-U.S. law) in respect of any material Tax, settle any material file an amended Tax ProceedingReturn, surrender any right to claim a material Tax refundrefund of Taxes, offset or other reduction in Tax liabilityenter into any closing agreement with any Taxing Authority regarding any material Tax, request or consent to any extension or waiver of the limitations limitation period applicable to any material Tax claim or assessment outside in respect of material Taxes (other than pursuant to customary extensions of the due date to file a Tax Return obtained in the ordinary course of business) or apply for any private letter ruling or similar guidance from any Taxing Authority;
(nxix) make enter into any commitment with respect new commitments to make, or make, any capital expenditures expenditures, or acquisitions of real or personal property, other than amounts of which that are not in the aggregate in excess of 110% of the amounts for the applicable individual month set forth on capital expenditures budget for the Company set forth in Part 6.01(n)(iSection 6.01(b)(xix) of the Company Disclosure Schedule;
(o) institute, settle or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(rxx) other than the Voting Agreements, engage in the ordinary course of business or as contemplated by this Agreement (i) amendany transaction with, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreementagreement, arrangement or (ii) renew or enter into understanding with, any Contract with an Affiliate of the Company;
(s) voluntarily terminate, amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffsPerson covered by Item 404 of Regulation S-K promulgated by the SEC, in each case case, that could implicate the WARN Actwould be required to be disclosed pursuant to Item 404; or
(uxxi) authorize, agree or commit or agree to take do any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentenceforegoing.
Appears in 2 contracts
Samples: Merger Agreement (Chase Corp), Merger Agreement (Chase Corp)
Conduct of the Company. The Company covenants and agrees that, except for matters (i) expressly permitted or expressly contemplated by this Agreement, (ii) set forth on Part 6.01 of the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken with the prior written consent of Parent (which shall not be unreasonably withheld, conditioned or delayed), (v) required by Applicable Law or the rules and regulations of Nasdaq, from From the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereofuntil the Effective Time, the Company (A) shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) to, conduct its business in the ordinary course in all material respects, substantially consistent with past practicepractice and in compliance with all material Applicable Laws and all material governmental authorizations, (2) and use its reasonable best efforts to the extent consistent with the foregoing clause (1)preserve intact its present business organization, material assets, properties, contracts and licenses, maintain its business as a going concern and (3) in effect all Company Permits, keep available the services of its current directors, officers and key employees and to preserve the goodwill of and maintain satisfactory relationships with those Persons its customers, lenders, suppliers, distributors, lessors, licensors, licensees, creditors, contractors and others having material business relationships with it. Without limiting the generality of the foregoing and to the fullest extent permitted by Applicable Law, from the date of this Agreement until the Effective Time, except as set forth in Section 6.01 of the Company and its SubsidiariesDisclosure Schedule, and (B) or with Parent’s prior written consent or to the extent permitted by another Section of this Agreement, the Company shall not, and shall cause each not permit any of its Subsidiaries not to:
(a) amend or propose to amend the Company’s certificate of incorporation or bylaws, or amend any certificate of incorporation or bylaws, or other comparable charter or organizational documents, Organizational Documents of the Company’s SubsidiariesCompany or its Subsidiaries (whether by merger, consolidation or otherwise);
(b) other than with respect to a direct or indirect wholly owned Subsidiary of the Company, (i) establish a record date forsplit, combine, redenominate or reclassify any shares of its capital stock, (ii) declare, set aside aside, make or pay any dividends on, dividend or make any other distributions distribution (whether in cash, stock, property property, any combination thereof or otherwise) in respect ofof any shares of its capital stock or other securities (other than dividends or distributions by any of its wholly-owned Subsidiaries), or enter into (iii) redeem, repurchase, cancel or otherwise acquire or offer to redeem, repurchase, or otherwise acquire, directly or indirectly, any agreement of its securities or any securities of any of its Subsidiaries, other than the cancellation of Company Stock Options in connection with respect to the voting exercise thereof;
(c) (i) issue, deliver, sell, grant or pledge, or authorize or propose the issuance, delivery, sale, grant or pledge of, any capital shares of any Company Securities or Company Subsidiary Securities, or pay or make any commitment to pay any amounts directly or indirectly based (in whole or in part) on the price or value of Company Securities or Company Subsidiary Securities, other than the issuance of any shares of the Company Common Stock upon the exercise of Company Stock Options that are outstanding on the date of this Agreement in accordance with the terms of those options on the date of this Agreement or accrual of Director Stock Units, or distributions of cash in connection with stock units in respect of shares of Company Common Stock issued, under the Director Deferred Fee Plan in accordance with the terms thereof or (ii) amend or propose to amend any term of any Company Security or any Company Subsidiary Security (in each case, whether by merger, consolidation or otherwise);
(d) (i) form any subsidiary, (ii) acquire (including by merger, consolidation, or acquisition of stock or assets) any equity interest, assets or any real property of any corporation, partnership, other business organization or any division thereof from any other Person, other than acquisitions of (A) raw materials (including, without limitation, any supplies used in the manufacture, production, assembly or packaging of the products of the Company or its Subsidiaries) in arms-length transactions in the ordinary course of business and (B) assets in arms-length transactions in the ordinary course of business in each case involving the payment of consideration of $2,500,000 or less individually (or payments less than $5,000,000 for all such acquisitions in the aggregate), (iii) merge or consolidate with any other Person or (iv) adopt a plan of complete or partial liquidation, dissolution, recapitalization, reorganization or restructuring (or resolutions providing for or authorizing such action) of the Company or any of its Subsidiaries (other than the Merger);
(e) sell, lease, license, assign, transfer, convey, terminate or otherwise dispose of, or modify, amend, extend or renew any agreement with respect to, any Subsidiary or any amount of assets, securities convertible or exchangeable therefor)property except (i) pursuant to existing Contracts as of the date hereof, (ii) splitinventory (including, reverse splitwithout limitation, combineraw materials, subdivide work in process and finished goods) in arms-length transactions in the ordinary course of business or reclassify (iii) in arms-length transactions in the ordinary course of business in each case involving the receipt of consideration of $2,500,000 or otherwise amend the terms of any capital stock less individually (or securities convertible receipt of consideration of less than $4,000,000 for all such sales, leases, encumbrances and other dispositions in the aggregate), provided that such sales, leases, encumbrances or exchangeable thereforother dispositions referred to in this subsection (iii) do not materially impact the ability of the Company and its Subsidiaries to conduct their business in the ordinary course;
(f) create or incur any Lien on any material asset other than Permitted Liens or any immaterial Lien incurred in the ordinary course of its Subsidiariesbusiness consistent with past practice and which is reasonably necessary to conduct the Company’s business as presently conducted;
(g) make any loan, (iii) except as expressly provided in Section 6.01(c)advance or investment either by purchase of stock or securities, issue contributions to capital, property transfers, or authorize the issuance purchase of any property or assets of any Person, other securities than loans or advances to, or investments in, its wholly-owned Subsidiaries;
(h) create, incur, assume, suffer to exist or otherwise be liable with respect to any indebtedness for borrowed money or guarantees thereof other than (i) any draw downs in respect ofthe ordinary course of business consistent with past practice on the Company’s revolving credit facility under the GE Credit Agreement or (ii) such indebtedness or guarantees that exist on the date hereof;
(i) redeem, repurchase, prepay, defease or cancel any indebtedness for borrowed money, other than as required in lieu of or in substitution for, shares of capital stock of accordance with its terms;
(j) (i) enter into any Contract that would have been a Company Material Contract were the Company or any of its Subsidiaries (a party or securities convertible or exchangeable therefor), or (iv) purchase, redeem or otherwise acquire or offer to purchase, redeem or acquire any Company Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPP;
(c) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company Securities, other than (i) the issuance of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect thereto on the date of this Agreement other than with respect to Contracts for the sale or (Bacquisition of inventory or raw materials in the ordinary course consistent with past practice and as permitted by Section 6.01(d) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent and Section 6.01(e) or (ii) the issuance of shares of terminate, amend, renew, or extend in any material respect any Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement Material Contract or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company;
(d) merge, consolidate orwaive any material right thereunder, other than in the ordinary course of business substantially on terms consistent with past practice (including in terms both of timing and amounts);
(k) terminate, suspend, abrogate, abandon, cease to prosecute, fail to maintain, sell, license, assign, encumber, amend or modify in any material respect any material Company Permit, material Company Owned Intellectual Property or other material assets;
(l) except as required by Applicable Laws or existing Employee Plans or in the ordinary course of business consistent with past practice, enter into strategic alliance (i) grant or similar legal partnership with increase any Personseverance or termination pay to (or amend any existing arrangement with) any of their respective present or former director, file a voluntary petition for bankruptcy officer or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization employee of the Company or any of its Subsidiaries;
the Company subsidiaries, (e) (iii) increase the salary, wages, benefits, bonuses benefits payable under any severance or other cash compensation payable termination pay policies or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms of employment agreements existing employment or other compensation agreements or arrangements in effect as of the date hereofof this Agreement, (Biii) enter into any employment, deferred compensation or other similar agreement (or any amendment to any such existing agreement) with any of their respective existing directors, officers or employees, (iv) establish, adopt or amend (except as required under by Applicable Law) any Company collective bargaining, bonus, profit-sharing, thrift, pension, retirement, deferred compensation, severance, compensation, stock option, restricted stock or other benefit plan or arrangement covering any of their respective directors, officers or employees, that would be an Employee Plan pursuant to the terms if it were in effect existence as of the date hereof or Collective Bargaining Agreement or under Applicable Lawof this Agreement, (Cv) made grant any equity or equity-based awards, (vi) increase the compensation, bonus or other benefits payable to any current or former employee, director or officer of the Company (except for (x) increases required pursuant to any contract or benefit plan of the Company in effect on the date hereof and (y) increases in salary and bonuses to non-executive officers in the ordinary course of business and substantially consistent with past practice), or (Dvii) in connection with changes loan or advance any money or other property to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of businessany present or former director, and (ii) other than as required by the terms officer or employee of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating any of the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereofsubsidiaries;
(fm) hire, engage or terminate the hire any person for employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
(i) sell, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregate, except in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice;
(j) agree to any exclusivity, non-competition or similar provision or covenant limiting the ability of the Company or any of its Subsidiaries reasonably expected to compete or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness receive compensation in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement300,000 annually;
(mi) make, change or revoke any material Tax electionelection (except for elections made in the ordinary course of business or consistent with the Company’s past practices); (ii) settle or compromise any claim, change notice, audit report or assessment in respect of a material amount of Taxes; (iii) amend any annual Tax accounting period, file any material amended Tax Return income or file any other material Tax Return in a manner inconsistent with past practiceReturn, (iv) enter into any “Tax allocation agreement, Tax sharing agreement, Tax indemnity agreement, pre-filing agreement, advance pricing agreement, cost sharing agreement or closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of agreement relating to any material Tax, settle any material Tax Proceeding, (v) surrender or forfeit any right to claim a material Tax refund, offset or other reduction in Tax liability, ; or consent to any extension or (vi) consent to any waiver of the statute of limitations period applicable to any income or other material Tax or Tax Return;
(o) make any material change in any method of accounting or accounting principles or practice used by the Company or any of the working capital policies applicable to the Company and its Subsidiaries, except for any such change required by reason of a concurrent change in GAAP or Regulation S-X under the 1934 Act, as approved by its independent public accountants;
(p) compromise, waive, release, assign, settle, or offer or propose to waive, release, assign or settle, any litigation, investigation, arbitration, suit, action, proceeding or other claim (including without limitation any suit, action, claim, proceeding or assessment outside investigation relating to this Agreement or the transactions contemplated hereby), other than compromises, settlements or agreements that involve only the payment of monetary damages not in excess of $750,000 individually or $2,000,000 in the aggregate, in any case without the imposition of equitable relief on, or the admission of wrongdoing by, the Company or any of Subsidiary of the Company;
(q) fail to use reasonable best efforts maintain and keep in full force and effect all existing material insurance policies for the benefit of the Company and its Subsidiaries, other than such policies that expire by their terms (in which event the Company and its Subsidiaries shall renew or replace such policies) or changes to such policies made in the ordinary course of business;
(nr) make take any commitment action which with respect to capital expenditures the passage of time or giving of notice or both would result in excess a material default under any Company Material Contract;
(s) pay or discharge any material claims, Liens or liabilities which are not reserved for or reflected on the Company Balance Sheet or incurred in the ordinary course of business after the amounts Company Balance Sheet Date;
(t) except as set forth in Part 6.01(n)(iSection 6.01(t) of the Company Disclosure Schedule, authorize any capital expenditures in excess of $1,000,000 individually or $3,000,000 in the aggregate;
(ou) institutewith respect to Company Intellectual Property, settle or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet sell, assign, license, sublicense, encumber, impair, abandon, fail to diligently maintain, transfer or otherwise dispose of any right, title or interest of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle in any of the material Company Intellectual Property, (B) extend, amend, waive, cancel or agree modify any rights in or to settle material Company Intellectual Property, (C) fail to diligently prosecute the material patent applications owned by the Company or any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business of its Subsidiaries, or (iiD) Proceedings brought against Parent divulge, furnish to or Merger Sub arising out make accessible any Trade Secrets within the material Company Intellectual Property to any Third Party who is not subject to an enforceable written agreement to maintain the confidentiality of a breach or alleged breach of this Agreement by Parent or Merger Subsuch Trade Secrets;
(pv) enter into except as may be required by Applicable Law or the Organizational Documents of the Company, convene any material new line regular or special meeting (or any adjournment thereof) of businessthe shareholders other than the Company Shareholder Meeting;
(qw) fail to maintain in all material respects any Insurance Policies;
enter into, amend, waive or terminate (r) other than in the ordinary course of business or as contemplated by this Agreement (i) amend, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract terminations in accordance with its their terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an any Affiliate of the Company;
(s) voluntarily terminate, amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Act; or
(ux) authorizeagree, resolve or commit or agree to take do any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentenceforegoing.
Appears in 2 contracts
Samples: Merger Agreement (Razor Holdco Inc.), Merger Agreement (Thermadyne Holdings Corp /De)
Conduct of the Company. The Company covenants and agrees that, except Except for matters (i) expressly permitted or expressly contemplated and required by this Agreement, (ii) set forth on Part 6.01 of the Company Disclosure Schedule, (iii) reasonably undertaken Transaction Documents or as otherwise consented to in connection with any COVID-19 Measures, (iv) undertaken with advance by the prior written consent of Parent Purchaser (which shall consent will not unreasonably be unreasonably withheld, conditioned or delayed), (v) required by Applicable Law or the rules and regulations of Nasdaq, from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereofor the date of the Closing, the Company (A) shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) the other Group Companies to, conduct its business in the ordinary course in all material respects, substantially consistent with past practiceOrdinary Course of Business and use its reasonable best efforts to (i) preserve intact its present business organization, (2ii) maintain in effect all of its authorizations or permits from Governmental or Regulatory Authorities necessary to the extent consistent with the foregoing clause (1), maintain conduct its business as a going concern and in the Ordinary Course of Business, (3iii) keep available the services of its current directors, officers and key employees Key Employees, and to preserve the goodwill of and (iv) maintain satisfactory relationships with those Persons its customers, lenders, suppliers and others having material business relationships with it. Without limiting the generality of the foregoing, except for matters expressly contemplated by this Agreement or as otherwise consented to in advance by the Purchaser (which consent will not unreasonably be withheld), the Company and its Subsidiaries, and (B) shall not, and shall cause each not permit any of its Subsidiaries not the other Group Companies to:
(a) amend the Company’s certificate its memorandum and articles of incorporation or bylawsassociation, or amend any certificate of incorporation or bylaws, bylaws or other comparable charter similar organizational documents (whether by merger, consolidation or organizational documents, of the Company’s Subsidiariesotherwise);
(b) other than with respect to a direct or indirect wholly owned Subsidiary of the Company, (i) establish a record date for, declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock, property or otherwise) in respect of, or enter into any agreement with respect to the voting of, any capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), (ii) split, reverse split, combine, subdivide combine or reclassify or otherwise amend the terms any shares of share capital of any capital stock (or securities convertible or exchangeable therefor) of the Group Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c), issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, for shares of its capital stock of the Company or any of its Subsidiaries other securities, (ii) declare, set aside or securities pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of, or convertible into or exchangeable therefor)or exercisable for, or any share capital of any Group Company, (iviii) purchaseredeem, redeem repurchase or otherwise acquire or offer to purchaseredeem, redeem repurchase, or otherwise acquire any Company Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Companyshare capital or (iv) take any action that would result in any amendment, in each case, in satisfaction by holders modification or change of Company Equity Awards any material term of the applicable withholding taxes or in accordance with the terms of the ESPPany Indebtedness;
(c) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company Securities, other than (i) issue, deliver or sell, or authorize the issuance of issuance, delivery or sale of, any shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement or (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment share capital or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent equity interests, or (ii) the issuance amend any term of any shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement share capital or (iii) the issuance of other equity interests of a wholly owned Subsidiary of the Company to the Company (in each case, whether by merger, consolidation or another wholly owned Subsidiary of the Companyotherwise);
(d) merge, consolidate or, other than in the ordinary course of business substantially consistent with past practice, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, any complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiariesreorganization;
(e) (i) increase the salarymake any capital expenditures or incur any liabilities in respect thereof, wages, benefits, bonuses or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractorsin each case in excess of RMB500,000, except for increases (A) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) those contemplated in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) transactions contemplated by this Agreement or any other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereofTransaction Documents;
(f) hire, engage or terminate the employment or engagement of acquire (other than for cause, as determined by the Companyi) any employee, officer, director, business or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part thereof (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise), or (ii) that, individually involve a purchase price or principal amount of not more any other material assets (other than $500,000 individually or $2,000,000 assets acquired in the aggregateOrdinary Course of Business);
(g) (i) sell, other than one lease, license or more acquisitions otherwise transfer any of inventory, supplies, intellectual property the Group Company’s assets, raw materialssecurities, equipment properties, interests or similar businesses, including any Group Company IP outside the Ordinary Course of Business, or (ii) create any Lien with respect to any of its properties or assets of any Group Company, except statutory Liens for taxes not yet due or payable and Liens that arise in the ordinary course Ordinary Course of business Business and in amounts substantially consistent with past practicedo not materially impair such Group Company’s ownership or use of such property or assets;
(i) sellmake any material change in any compensation arrangement or agreement with any employee, assignofficer, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse director or otherwise dispose shareholder of any assets, propertiesGroup Company, or Company Intellectual Property(ii) establish, in each case having a value in excess of $500,000 individually adopt, enter into or $5,000,000 in the aggregate, except in the ordinary course of the Company’s amend any employee benefit plan or its Subsidiaries’ business substantially consistent with past practiceagreement (other than offer letters that contemplate “at will” employment without severance benefits) or collective bargaining agreement;
(ji) agree to hire any exclusivityemployee at or above mid-level management personnel or whose annualized compensation exceeds RMB400,000;
(i) repurchase, non-competition prepay or similar provision or covenant limiting the ability incur any Indebtedness, including by way of the Company a guarantee, or any issuance or sale of debt securities or any merger, business combination or other acquisition, or issue and sell options, warrants, calls or other rights to acquire any debt securities of any Group Company, or (ii) make any loans or guarantees made by any Group Company to or for the benefit of its Subsidiaries to compete employees, officers or engage in any line of business, with any Person or in any geographic areadirectors, or pursuant to which any benefit or right would be required to be given or lost as a result members of so competing or engagingtheir immediate families, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company other than travel advances and its Subsidiaries or similar arrangements, that (x) are other advances made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Timebusiness;
(k) adopt terminate or make any material change to a contract or agreement to which any Group Company is a party or any of its assets is subject, other than in the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization)Ordinary Course of Business;
(l) except for borrowings waive or compromise any valuable right or of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution debt owed to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit AgreementGroup Company;
(m) makeany satisfaction or discharge of any Lien or payment of any obligation by any Group Company, except in the Ordinary Course of Business;
(n) make any change in any method of accounting principles, method or revoke practices, except for any material such change required by generally accepted accounting principles or applicable law (in each case following consultation with the Company’s independent auditor);
(o) make or change any Tax election, change any annual Tax tax accounting period, file adopt or change any method of Tax accounting, amend in any material amended respect any Tax Return Returns or file any claims for material Tax Return in a manner inconsistent with past practicerefunds, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceedingtax claim, audit or assessment, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of businessassessment;
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;
(op) institute, settle settle, or agree to settle any Proceedingslegal proceedings pending or threatened before any arbitrator, court or other than (i) the settlement of claims, liabilities Governmental or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of businessRegulatory Authority;
(q) fail to maintain in all material respects enter into any Insurance Policies;new line of business; or
(r) other than in the ordinary course of business or as contemplated by this Agreement (i) amendauthorize, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an Affiliate of the Company;
(s) voluntarily terminate, amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Act; or
(u) authorizeresolve, commit or agree to take do any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions things described in this sentenceSection 4.1.
Appears in 2 contracts
Samples: Share Purchase Agreement, Share Purchase Agreement (Renren Inc.)
Conduct of the Company. The Company covenants and agrees that, except for matters (i) expressly permitted or Except as expressly contemplated by this AgreementAgreement or as set forth on Schedule 6.01, from the date of this Agreement until the Effective Time, the Company shall, and shall cause each Acquired Company to, conduct its business in the ordinary course consistent with past practice and use its commercially reasonable efforts to (i) preserve substantially intact its present business organization, (ii) keep available the services of officers and key employees of the Acquired Companies, and (iii) maintain substantially intact its relationships with the customers and suppliers of the Acquired Companies and others having material business relationships with them. Without limiting the generality of the foregoing, except as expressly contemplated by this Agreement or as set forth on Part 6.01 of Schedule 6.01, or pursuant to the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken with the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed), (v) required by Applicable Law or the rules and regulations of Nasdaq, from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereof, the Company (A) shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) conduct its business in the ordinary course in all material respects, substantially consistent with past practice, (2) to the extent consistent with the foregoing clause (1), maintain its business as a going concern and (3) keep available the services of its current officers and key employees and to preserve the goodwill of and maintain satisfactory relationships with those Persons having material business relationships with the Company and its Subsidiaries, and (B) shall not, and shall cause each of its Subsidiaries the other Acquired Companies not to:to (it being understood and hereby agreed that if any action is expressly permitted by any of the following subsections, such action shall be expressly permitted under Section 6.01 in general):
(a) amend the Company’s its certificate of incorporation or bylawsincorporation, or amend any certificate of incorporation or bylaws, bylaws or other comparable charter similar organizational documents (whether by merger, consolidation or organizational documents, of the Company’s Subsidiariesotherwise);
(b) other than with respect to a direct or indirect wholly owned Subsidiary of the Company, (i) establish a record date for, declare, set aside or pay any dividends on, dividend or make any other distributions distribution (whether in cash, stock, stock or property or otherwiseany combination thereof) in respect of, or enter into of any agreement with respect to the voting of, any capital stock of the Company or any of its Subsidiaries (Securities or securities convertible or exchangeable therefor), (ii) split, reverse split, combine, subdivide or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) of the Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c), issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor)Acquired Company, or (iv) purchaseredeem, redeem repurchase or otherwise acquire or offer to purchaseredeem, redeem repurchase, or otherwise acquire any Company SecuritiesSecurities or securities of any other Acquired Company, except for the net settlement of in connection with Company Equity Compensatory Awards or acquisitions Company Restricted Stock Awards in the ordinary course of business consistent with past practice;
(c) (i) issue, deliver or sell, or authorize the issuance, delivery or sale of, any shares of any Company Securities or securities of any other Acquired Company, other than (A) the issuance of any shares of Company Common Stock by upon the Company, in each case, in satisfaction by holders exercise of Company Equity Awards Stock Options or vesting of Company RSUs that are outstanding on the applicable withholding taxes or date of this Agreement in accordance with the terms of the ESPP;
(c) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company Securities, other than (i) the issuance of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect those awards on the date of this Agreement or (B) grants or awards to newly hired employees of Company Securities Compensatory Awards or Company Equity Restricted Stock Awards issued in the ordinary course of business consistent with past practice and, in the case of Company Stock Options, with a per share exercise price that is no less than the then-current market price of a share of Company Common Stock; provided that in no event shall such grants exceed in the aggregate 50,000 shares of Company Common Stock; or (ii) amend any term of any Company Security or the security of any other Acquired Company (whether by merger, consolidation or otherwise) including an amendment of a Company Compensatory Award held by an employee to provide for acceleration of vesting as a result of the Transaction or a termination of employment or service related to the Transaction;
(d) incur any capital expenditures or any obligations or liabilities in respect of capital expenditures, except for any budgeted capital expenditures and other unbudgeted capital expenditures not to exceed $500,000 individually or $2,000,000 in the aggregate in any six month period, or except as may be required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements any real property lease as in effect as of on the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the CompanyAgreement;
(de) mergeacquire (by merger, consolidate orconsolidation, acquisition of stock or assets or otherwise), directly or indirectly, (A) other than obligations and liabilities addressed in Section 6.01(d) any Person or any assets, properties, interest or business, except operating assets in the ordinary course of business consistent with past practice for a purchase price not in excess of $200,000 individually or (B) securities of a third party;
(f) sell, lease, license or otherwise transfer, or create or incur any Lien on, any of the assets, securities, properties, interests or businesses of the Acquired Companies, other than (A) in the ordinary course of business consistent with past practice; (B) any Permitted Encumbrance, (C) any non-exclusive license of Company IP in the ordinary course of business and (D) pursuant to existing Contracts;
(g) make any loans, advances or capital contributions to, or investments in, any other Person, other than in the ordinary course of business substantially consistent with past practice, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries;
(e) (i) increase the salary, wages, benefits, bonuses or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
(ih) sell, assign, lease, license, pledge, transfer, abandon, subject make any payments to any Lien, permit Related Person except pursuant to lapse or otherwise dispose the terms of any assets, properties, existing Contract or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 arrangement that is disclosed in the aggregate, except SEC Documents or payments to employees in the ordinary course of business;
(i) create, incur or assume any indebtedness for borrowed money other than debt related to bonds (including RUS bonds) incurred in the Company’s or its Subsidiaries’ ordinary course of business substantially consistent with past practice;
(j) agree to enter into any exclusivity, non-competition Contract that limits or similar provision or covenant limiting the ability of the otherwise restricts in any material respect any Acquired Company or any of its Subsidiaries to compete Affiliates or engage any successor thereto from engaging or competing in any line of business, in any location or with any Person or enter into, amend or modify in any geographic areamaterial respect or terminate any Company Material Contract or otherwise waive, release or pursuant to which assign any benefit material rights, claims or right would be required to be given or lost as a result benefits of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, exceptAcquired Company thereunder, in each case, in connection outside the ordinary course of business consistent with Contracts entered into with customers, contractors, distributors, resellers, partners past practice;
(k) other than pursuant to the terms of an applicable plan or suppliers agreement identified on Section 6.01 of the Company and its Subsidiaries Disclosure Schedule or similar arrangementsas required by Applicable Law (including to avoid adverse tax consequences under Section 409A of the Code, that but, in such case, subject to Parent’s prior review) (xi) are grant or increase any change-in-control, severance or termination pay to any director, officer, advisor, consultant or employee of any Acquired Company, (ii) increase benefits payable under any existing change-in-control, severance or termination pay policies or employment agreements, (iii) enter into or increase benefits payable under any employment, deferred compensation or other agreement or offer (or amend any such existing agreement or offer) with any director or officer, advisor, consultant or employee of any Acquired Company, (iv) establish, adopt or amend (except as required by Applicable Law) any collective bargaining, bonus, commission, profit-sharing, thrift, pension, retirement, deferred compensation, compensation, stock option, restricted stock or other benefit plan or arrangement covering any director, officer advisor, consultant or employees of any Acquired Company, (v) increase compensation, bonus, commission, or other benefits payable to any director, officer, advisor, consultant or employee of any Acquired Company, except any of the foregoing with respect to any advisor, consultant or employee made in the ordinary course of business substantially consistent with past practice, or (yvi) are on terms substantially similar to terminate any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, key employee except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization)cause;
(l) change any Acquired Company’s methods of accounting or accounting practices, except for borrowings of revolving loans under the Existing Credit Agreement as required by concurrent changes in GAAP or SEC rules and capital leases regulations, in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of either case as agreed to by its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreementindependent public accountants;
(m) makecommence, settle, or offer or propose to settle, any Proceeding (A) involving or against any Acquired Company (other than any Proceeding involving a settlement of $250,000 or less as its sole remedy), or (B) that relates to the transactions contemplated hereby;
(n) make or change or revoke any material Tax election; settle or compromise any claim, change any annual Tax accounting periodnotice, file any audit report or assessment in respect of material amended Tax Return or file Taxes; enter into any material Tax Return in a manner inconsistent with past practiceallocation agreement, enter into any “Tax sharing agreement, Tax indemnity agreement, pre-filing agreement, advance pricing agreement, cost sharing agreement or closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of agreement relating to any material Tax, settle any material Tax Proceeding, ; surrender or forfeit any right to claim a material Tax refund, offset or other reduction in Tax liability, ; or consent to any extension or waiver of the statute of limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;assessment; or
(o) instituteagree, settle resolve or agree commit to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than in the ordinary course of business or as contemplated by this Agreement (i) amend, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an Affiliate of the Company;
(s) voluntarily terminate, amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Act; or
(u) authorize, commit or agree to take do any of the foregoing actionsforegoing. Notwithstanding anything set forth the foregoing, nothing in this Agreement or any other documents related is intended to the Mergergive Parent, prior to the Closing, neither Parent nor Merger Sub shallor the Second Merger Sub, directly or indirectly, exercise any form of the right to control over or direct the Company, any of its subsidiaries, business or any operations of the Governmental Permits, within Company or its Subsidiaries at any time prior to the meaning of Effective Time. Prior to the FCC Rules and the FCC’s orders and other published rulings thereunder. In additionEffective Time, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employeesshall exercise, suppliers, customers and other individuals having business dealings consistent with the Company or any Subsidiary terms and conditions of this Agreement, complete control and supervision over their own business and operations. If Parent does not reply to a written request for consent delivered by the Company (including any COVID-19 Measures) to Parent either affirmatively or (y) respond negatively in writing to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that Person at the Company shallmaking such request within five Business Days after delivery of such request, then Parent shall be irrevocably deemed to the extent legally permissible and only if time permits, consult with Parent prior consent to taking the actions described such request for purposes of this Section 6.01 in this sentencesuch specific instance.
Appears in 2 contracts
Samples: Merger Agreement (Occam Networks Inc/De), Merger Agreement (Calix, Inc)
Conduct of the Company. The Company covenants (a) From and agrees that, except for matters (i) expressly permitted or expressly contemplated by this Agreement, (ii) set forth on Part 6.01 of the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken with the prior written consent of Parent (which shall not be unreasonably withheld, conditioned or delayed), (v) required by Applicable Law or the rules and regulations of Nasdaq, from after the date hereof until the earlier of the Effective Time and or the termination of date, if any, on which this Agreement in accordance with Article 8 hereof, is terminated pursuant to Section 7.1 (the Company (A) shall“Termination Date”), and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) conduct its business in the ordinary course in all material respects, substantially consistent with past practice, (2) to the extent consistent with the foregoing clause (1), maintain its business as a going concern and (3) keep available the services of its current officers and key employees and to preserve the goodwill of and maintain satisfactory relationships with those Persons having material business relationships with the Company and its Subsidiaries, and (B) shall not, and shall cause each of its Subsidiaries not to:
(a) amend the Company’s certificate of incorporation or bylaws, or amend any certificate of incorporation or bylaws, or other comparable charter or organizational documents, of the Company’s Subsidiaries;
(b) other than with respect to a direct or indirect wholly owned Subsidiary of the Company, except (i) establish a record date for, declare, set aside as may be required by applicable Law or pay any dividends on, the regulations or make any other distributions (whether in cash, stock, property or otherwise) in respect of, or enter into any agreement with respect to the voting of, any capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), (ii) split, reverse split, combine, subdivide or reclassify or otherwise amend the terms requirements of any capital stock (exchange or securities convertible or exchangeable therefor) of regulatory organization applicable to the Company or any of its Subsidiaries, (ii) with the prior written consent of Parent (such consent not to be unreasonably conditioned, withheld or delayed), (iii) except as may be expressly provided contemplated or required by this Agreement, (iv) in connection with a Company COVID Action or (v) as set forth in Section 6.01(c5.1 of the Company Disclosure Letter, the Company covenants and agrees that it shall use commercially reasonable efforts to conduct the business of the Company and its Subsidiaries in all material respects in the Ordinary Course of Business, and shall use commercially reasonable efforts to preserve intact their present lines of business, and to maintain their rights, franchises and Company Permits; provided that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any provision of Section 5.1(b) shall be deemed a breach of this sentence unless such action would constitute a breach of such other provision. Notwithstanding the foregoing, the Company and its Subsidiaries shall be permitted to take, and nothing in this Agreement shall prohibit the Company or its Subsidiaries from taking, any Company COVID Action.
(b) The Company agrees with Parent, on behalf of itself and its Subsidiaries, that, from the date hereof and prior to the earlier of the Effective Time and the Termination Date, except (i) as may be required by applicable Law or the regulations or requirements of any stock exchange or regulatory organization applicable to the Company or any of its Subsidiaries or Company Benefit Plan, (ii) with the prior written consent of Parent (such consent not to be unreasonably conditioned, withheld or delayed), (iii) as may be expressly contemplated or required by this Agreement, (iv) in connection with a Company COVID Action or (v) as set forth in Section 5.1 of the Company Disclosure Letter, the Company:
(i) shall not amend or restate any Company Organizational Document, and shall not permit any of such Subsidiaries to amend or restate their respective certificate of incorporation, certificate of formation, bylaws, limited partnership agreement, limited liability company agreement or comparable constituent or organizational documents, except, in each case, for any immaterial or ministerial amendments thereto;
(ii) shall not, and shall not permit any of such Subsidiaries to split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution forfor any shares of its capital stock, except for any such transaction by a wholly owned (direct or indirect) Subsidiary of the Company which remains a wholly owned (direct or indirect) Subsidiary following the consummation of such transaction;
(iii) shall not, and shall not permit any of such Subsidiaries that is not wholly owned (directly or indirectly) by the Company or is not a wholly owned (direct or indirect) Subsidiary of any of such Subsidiaries to, authorize or pay any dividends on or make any distribution with respect to its outstanding shares of capital stock (whether in cash, assets, stock or other securities of the Company or any of its Subsidiaries (or securities convertible or exchangeable thereforSubsidiaries), except dividends or (iv) purchase, redeem or otherwise acquire or offer to purchase, redeem or acquire distributions by any Company Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPP;
(c) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company Securities, other than (i) the issuance of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement or (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company Subsidiaries only to the Company or another to any other wholly owned (direct or indirect) Subsidiary of the Company;
(div) mergeshall not, consolidate orand shall not permit any of such Subsidiaries to, other than in the ordinary course of business substantially consistent with past practice, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, of complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization reorganization, or take any action with respect to any securities owned by such person;
(v) shall not, and shall not permit any of such Subsidiaries to, make any acquisition of any other person or business or make any loans, advances or capital contributions to, or investments in, any other person, except as made in connection with any transaction among the Company and its wholly owned (direct or indirect) Subsidiaries or among the Company’s wholly owned (direct or indirect) Subsidiaries;
(vi) shall not, and shall not permit any of such Subsidiaries to, sell, lease, license, transfer, exchange or swap or otherwise dispose of or encumber (other than Permitted Liens) (or enter into, amend, modify, or terminate any Contract to do any of the foregoing with respect to) any Intellectual Property, any Real Property, or any tangible properties or assets, except in connection with (A) sales, transfers and dispositions of inventory and products, (B) non-exclusive licenses of Intellectual Property to customers and suppliers, or (C) leases of Real Property under which the Company or any of its Subsidiaries is a tenant, in the case of each of clauses (A) through (C), in the Ordinary Course of Business or encumbrances under the Company Credit Agreement (provided that prior to entering into any lease of Real Property in the Ordinary Course of Business with an annual rent amount exceeding $1,000,000, the Company will provide advance notice to, and reasonably consult with, Parent with respect thereto);
(vii) shall not, and shall not permit any of its Subsidiaries to, authorize any capital expenditures except for capital expenditures (A) to maintain, replace or repair damaged assets or (B) otherwise provided for in the Company’s capital expenditure budget set forth in Section 5.1(b)(vii) of the Company Disclosure Letter;
(viii) except as permitted under Section 5.1(b)(xi) with respect to Company Material Contracts relating to indebtedness, or pursuant to Section 5.15, or in connection with any repayment, redemption or discharge of any Company indebtedness, shall not, and shall not permit any of its Subsidiaries to enter into, modify, amend or terminate, or waive any material rights under any Company Material Contract or under any Company Permit, or enter into any new Contract which would be a Company Material Contract if it were in effect on the date of this Agreement, in each case, other than in the Ordinary Course of Business (provided that (a) this Ordinary Course of Business exception shall not apply with respect to any Contract of the nature described in Section 3.19(a)(iv), Section 3.19(a)(vi) or Section 3.19(a)(viii) and (b) promptly following entering into, materially modifying, materially amending or terminating any Company Material Contract of the nature described in Section 3.19(a)(xii) (including, for the avoidance of doubt, any modification or amendment of such Contract that would result in such Contract having any of the provisions described in Section 3.19(a)(viii)), the Company will provide notice to Parent of such action to the extent permitted under the terms of the relevant Company Material Contract);
(ix) shall not, and shall not permit any of its Subsidiaries to, materially change any material accounting policies or procedures or any of its methods of reporting income, deductions or other material items, except as required by GAAP, SEC rule or policy or applicable Law;
(x) shall not, and shall not permit any of its Subsidiaries to, issue, sell, pledge, dispose of or encumber (other than Permitted Liens), or authorize the issuance, sale, pledge, disposition or encumbrance of (other than Permitted Liens), any shares of its capital stock or other ownership interest in the Company or any of its Subsidiaries or any securities convertible into or exchangeable for any such shares or ownership interest, or any rights, warrants or options to acquire any such shares of capital stock, ownership interest or convertible or exchangeable securities or take any action to cause to be exercisable any otherwise unexercisable option under any existing Company Benefit Plans (except as otherwise provided by the terms of this Agreement or the express terms of any unexercisable or unexercised warrants outstanding on the date hereof), other than (A) issuances of shares of Company Common Stock in respect of the settlement of any Company RSUs or the exercise of rights under the ESPP, (B) the sale of shares of Company Common Stock pursuant to the vesting and settlement of Company RSUs for withholding of Taxes, (C) grants of service-based vesting Company RSUs (without performance-vesting goals or metrics) in the Ordinary Course of Business on terms consistent with past practices (including vesting), which grants shall, in the aggregate with respect to all grants made to each group of employees having the same employment level, not exceed the aggregate grant date value of the Company RSUs granted during calendar year 2020 to each such group of employees as set forth on Section 5.1(b)(x)(C) of the Company Disclosure Letter; provided that grants to CIC Plan participants following the date of this Agreement shall not provide for accelerated vesting upon a qualifying termination or upon consummation of the Merger or any other transaction contemplate hereby, in each case, under the CIC Plan, Section 2.5(c) of this Agreement, or any other Contract, and (D) pledges under the Company Credit Agreement;
(xi) shall not, and shall not permit any of its Subsidiaries to, incur, assume, guarantee or otherwise become liable for any additional indebtedness for borrowed money or any guarantee of such indebtedness, except for (A) additional indebtedness not to exceed $5,000,000 (provided that prompt written notice of any such indebtedness in excess of $1,000,000 is provided to Parent), (B) any indebtedness among the Company and its wholly owned (direct or indirect) Subsidiaries or among the Company’s wholly owned (direct or indirect) Subsidiaries and (C) any guarantees by the Company of indebtedness of Subsidiaries of the Company or guarantees by the Company’s Subsidiaries of indebtedness of the Company or any Subsidiary of the Company, which indebtedness is under the Company Credit Agreement or incurred in compliance with this Section 5.1(b)(xi);
(xii) shall not, and shall not permit any of its Subsidiaries to, commence or threaten (other than to protect a material right), or waive, release, assign, settle or compromise any pending or threatened action or proceeding, other than waivers, releases, assignments, settlements or compromises that do not (A) exceed $2,000,000 individually and $6,000,000 in the aggregate and (B) involve any admission of wrongdoing or equitable relief;
(xiii) shall not, and shall not permit any of its Subsidiaries to, change or revoke any material Tax election, change any material tax accounting method, file any material amended Tax Return, enter into any closing agreement, request any material Tax ruling, settle or compromise any material Tax proceeding or surrender any claim for a material refund of Taxes;
(xiv) except as permitted by Section 5.1(b)(x), shall not, and shall not permit any of its Subsidiaries to:
(A) grant or provide any severance or termination payments or benefits to any current or former employee, officer, non-employee director, individual independent contractor or consultant of the Company or any of its Subsidiaries (including any obligation to gross-up, indemnify or otherwise reimburse any such individual for any Tax incurred by any such individual, including under Section 409A or 4999 of the Code), except for severance or termination payments or benefits granted or provided in the Ordinary Course of Business in connection with retention, new hires, or promotions of employees of the Company or any of its Subsidiaries with a title of Vice President or below;
(B) accelerate the time of payment or vesting of, or the lapsing of restrictions with respect to, or fund or otherwise secure the payment of, any compensation or benefits (including any equity or equity-based awards) to any current or former employee, officer, non-employee director, individual independent contractor or consultant of the Company or any of its Subsidiaries;
(e) (iC) increase the salary, wages, benefits, bonuses or other cash compensation payable to any current or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any former employee, officer, non-employee director, individual independent contractor or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
(i) sell, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregate, except in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice;
(j) agree to any exclusivity, non-competition or similar provision or covenant limiting the ability consultant of the Company or any of its Subsidiaries to compete or engage in any line of businessSubsidiaries, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;
(o) institute, settle or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than in the ordinary course Ordinary Course of business Business (including in connection with promotions in the Ordinary Course of Business) for employees with a title of Vice President or as contemplated by this Agreement below;
(iD) amendestablish, modifyadopt, renew terminate or terminateamend any material Company Benefit Plan or any plan, program, arrangement, policy or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract agreement that would have been be a Material Contract Company Benefit Plan if it were in existence on the date of this Agreement;
(E) hire or retain any person to be an officer, employee, or individual independent contractor or consultant of the Company or any of its Subsidiaries, other than the hiring or retention of: (i) employees with a title of Vice President or below, (ii) renew non-employee directors or (iii) independent contractors and consultants having annual compensation of less than $200,000 (excluding, for the avoidance of doubt, non-employee directors), in each case, in the Ordinary Course of Business; provided that, for purposes of clause (iii), any such contractor or consultant shall enter into a service agreement on substantially a form made available to Parent prior to the date of this Agreement and any Contract with an Affiliate variation which has the net effect of a material negative or detrimental impact on the CompanyCompany shall be subject to review and approval by Parent;
(sF) voluntarily terminate, amend terminate the employment of any current employee with a title of Vice President or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or above other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Actthan for cause; or
(uG) authorizeenter into, commit adopt, materially amend, terminate or agree extend any local collective bargaining agreement or other similar labor-related agreement, except, in each case, as required by Law and expressly required pursuant to the terms of such agreement; and
(xv) shall not, and shall not permit any of its Subsidiaries to, agree, in writing or otherwise, to take any of the foregoing actions. Notwithstanding anything set forth in actions that are prohibited pursuant to clauses (i) through (xiv) of this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentenceSection 5.1(b).
Appears in 2 contracts
Samples: Merger Agreement (Ii-Vi Inc), Merger Agreement (Coherent Inc)
Conduct of the Company. The From the date hereof until the Acceptance Date, the Company covenants shall, and agrees thatshall cause each of its Subsidiaries to, conduct its business in the ordinary course consistent with past practice and use its reasonable best efforts to (x) preserve intact its present business organization, (y) keep available the services of its officers, employees and consultants and (z) maintain relationships with its customers, suppliers and others having significant business relationships with it. Without limiting the generality of the foregoing, except for matters (i) expressly permitted or as expressly contemplated by this Agreement, (ii) Agreement or as set forth on Part in Section 6.01 of the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken with the without Parent’s prior written consent of Parent (which shall not be unreasonably withheld, conditioned or delayed), (v) required by Applicable Law or the rules and regulations of Nasdaq, from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereof, the Company (A) shallshall not, and nor shall cause each it permit any of its Subsidiaries to use commercially reasonable efforts to (1) conduct its business in the ordinary course in all material respects, substantially consistent with past practice, (2) to the extent consistent with the foregoing clause (1), maintain its business as a going concern and (3) keep available the services of its current officers and key employees and to preserve the goodwill of and maintain satisfactory relationships with those Persons having material business relationships with the Company and its Subsidiaries, and (B) shall not, and shall cause each of its Subsidiaries not to:
(a) amend the Company’s certificate its articles of incorporation or bylawsincorporation, or amend any certificate of incorporation or bylaws, bylaws or other comparable charter similar organizational documents (whether by merger, consolidation or organizational documents, of the Company’s Subsidiariesotherwise);
(b) other than with respect to a direct split, combine or indirect wholly owned Subsidiary reclassify any shares of the Company, (i) establish a record date for, its capital stock or declare, set aside or pay any dividends on, dividend or make any other distributions distribution (whether in cash, stock, stock or property or otherwiseany combination thereof) in respect of its capital stock except for dividends or other distributions payable by any wholly owned Subsidiaries of the Company, or, except as may be required by the Affiliation Agreement, redeem, repurchase or otherwise acquire or offer to redeem, repurchase or otherwise acquire any Company Securities or any Company Subsidiary Securities;
(c) (i) issue, sell or otherwise deliver, or authorize the issuance, sale or other delivery of, any Company Securities or Company Subsidiary Securities, other than the issuance of Shares upon the exercise of Company Stock Options that were outstanding on March 6, 2009 in accordance with the terms of such options on such date or to the extent required pursuant to the Company ESPP as in effect on the date of this Agreement and in accordance with Section 2.06 or (ii) amend any term of any Company Security or any Company Subsidiary Security (whether by merger, consolidation or otherwise);
(d) incur any capital expenditures or any obligations or liabilities in respect thereof, other than (i) in accordance with the capital expenditure budgets previously provided to Parent or approved by the Company Board prior to the date hereof or (ii) any unbudgeted capital expenditures not to exceed, in the aggregate, 10% of the applicable total capital expenditures included in such capital expenditure budgets;
(e) make any loans, advances or capital contributions to, or investments in, any other Person other than in the ordinary course of business consistent with past practice or as required by existing contracts or agreements or pursuant to transactions entered into after the date hereof;
(f) acquire any material assets or property other than (i) capital expenditures permitted pursuant to Section 6.01(d), (ii) in the ordinary course of business consistent with past practices or (iii) as required by existing contracts or agreements;
(g) (i) sell, lease, license, dispose or otherwise transfer any material assets or property, other than in the ordinary course of business consistent with past practices or as required by existing contracts or agreements or (ii) sell, assign, license or otherwise transfer any material Intellectual Property owned by or licensed to the Company except pursuant to existing contracts or agreements in effect on the date hereof;
(h) incur, guaranty or otherwise become liable for any indebtedness for borrowed money other than in the ordinary course of business and in amounts and on terms consistent with past practices;
(i) create or incur any Lien on any material assets or property other than in the ordinary course of business consistent with past practices;
(j) enter into any agreement with or arrangement that limits or otherwise restricts in any material respect to the voting of, any capital stock of the Company or any of its Subsidiaries (or securities convertible that could, after the Effective Time, limit or exchangeable thereforotherwise restrict in any material respect Roche Holding Ltd, the Company or any of their respective Subsidiaries or any successor thereto) from engaging or competing in any line of business, in any location or with any Person;
(k) amend, modify or waive in any material respect or terminate any Material Contract or enter into any contract or agreement that would have constituted a Material Contract if entered into prior to the date hereof;
(l) other than the Company’s right to purchase prepaid insurance policies for the benefit of the Company’s directors and officers pursuant to Section 7.03 (provided that such policies together with such other insurance coverage contemplated by Section 7.03(d) shall be subject to the aggregate cap in Section 7.03(d)), (iii) splitincrease compensation, reverse splitbonuses or other benefits payable to any director or executive officer or, combineexcept in the ordinary course of business consistent with past practices, subdivide or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) other employee of the Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c), issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), or (iv) purchase, redeem or otherwise acquire or offer to purchase, redeem or acquire any Company Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPP;
(c) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company Securities, other than (i) the issuance of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement or (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant enter into, adopt or amend in any material respect any severance or retention plan, arrangement or policy applicable to the terms thereof and Section 2.06 of this Agreement any director, executive officer or employee; or (iii) enter into, adopt or amend in any material respect, including anything that would be covered in whole or in part by the issuance foregoing clause (ii), any employment, change of equity interests control, compensation, bonus, profit-sharing, stock option or other stock related rights or other forms of a wholly owned Subsidiary of the Company incentive or deferred compensation, retirement benefits or other benefit agreement, plan, arrangement or policy applicable to the Company any director or another wholly owned Subsidiary of the Company;
(d) merge, consolidate executive officer or, other than except in the ordinary course of business substantially consistent with past practicepractices, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization employee of the Company or any of its Subsidiaries;
(em) (i) increase settle, or propose to settle, any action, suit, investigation, proceeding or claim that is material to the salaryCompany and its Subsidiaries taken as a whole or that relates to the transactions contemplated hereby or (ii) intentionally waive, wages, benefits, bonuses release or other cash compensation payable assign any material rights or to become payable to claims;
(n) materially change the Company’s employeesmethods of accounting, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if concurrent changes in effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole GAAP or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
(i) sell, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregate, except in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice;
(j) agree to any exclusivity, non-competition or similar provision or covenant limiting the ability of the Company or any of its Subsidiaries to compete or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under of the Securities 1934 Act, or (iii) as agreed to by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization)its independent public accountants;
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (ivo) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file adopt or change any material amended method of Tax Return or file accounting, amend any material Tax Return in a manner inconsistent with past practiceReturns or file claims for material Tax refunds, enter into any “material closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceedingclaim, audit or assessment, or surrender in writing any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;
(o) institute, settle or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;or
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than in the ordinary course of business or as contemplated by this Agreement (i) amend, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an Affiliate of the Company;
(s) voluntarily terminate, amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Act; or
(u) authorizeresolve, commit or agree to take do any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentenceforegoing.
Appears in 2 contracts
Samples: Merger Agreement (Roche Investments USA Inc.), Merger Agreement (Genentech Inc)
Conduct of the Company. The Company covenants and agrees that, except Except for matters (i) expressly permitted or expressly contemplated by this Agreement, (ii) set forth on Part 6.01 of the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken with the prior written consent of Parent (which shall not be unreasonably withheld, conditioned or delayed), (v) required by Applicable Law or the rules and regulations of Nasdaq, from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereofuntil the Effective Time, the Company (A) shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) to, conduct its business in the ordinary course in all material respects, substantially consistent with past practicepractice and use commercially reasonable efforts to (i) preserve intact its assets, Intellectual Property Rights and business organization, (2ii) to the extent consistent with the foregoing clause maintain in effect all of its Governmental Authorizations, (1), maintain its business as a going concern and (3iii) keep available the services of its current directors, officers and key employees and to preserve the goodwill of and employees, (iv) maintain satisfactory relationships with those Persons its customers, partners, suppliers, licensors, licensees, distributors and others having material business relationships with it, (v) manage its working capital (including the Company timing of collection of accounts receivable and its Subsidiariesof the payment of accounts payable and the management of inventory) in the ordinary course of business consistent with past practice, and (Bvi) continue to make capital expenditures consistent with the Capex Budget. Without limiting the generality of the foregoing, except for matters expressly permitted by this Agreement or set forth on Section 7.01 of the Company Disclosure Schedule, the Company shall not, and nor shall cause each it permit any of its Subsidiaries not to, do any of the following without the prior written consent of Parent:
(a) amend the Company’s certificate its articles of incorporation or bylawsincorporation, or amend any certificate of incorporation or bylaws, bylaws or other comparable charter or organizational documentsdocuments (whether by merger, of the Company’s Subsidiariesconsolidation or otherwise);
(b) other than with respect to a direct or indirect wholly owned Subsidiary of the Company, (i) establish a record date for, declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock, property or otherwise) in respect of, or enter into any agreement with respect to the voting of, any capital stock of the Company or any of its Subsidiaries (Subsidiaries, other than dividends and distributions by a direct or securities convertible or exchangeable therefor)indirect wholly owned Subsidiary of the Company to its parent, (ii) split, reverse split, combine, subdivide combine or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) of the Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c), issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor)Subsidiaries, or (iv) purchase, redeem or otherwise acquire or offer to purchase, redeem or acquire any Company Securities or Company Subsidiary Securities, except for the net settlement or (v) take any action that would result in any amendment, modification or change of Company Equity Awards or acquisitions any term of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards any Indebtedness of the applicable withholding taxes Company or in accordance with the terms any of the ESPPits Subsidiaries;
(c) (i) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, Lien or otherwise encumber or dispose of any equity interests of the Company Securities or incur any obligation to make any payments to any Person based on the price or value of any Company Subsidiary Securities, other than (iA) the issuance of shares of Company Common Stock upon the exercise of Company Stock Options or pursuant to (A) the terms of the Company Equity Restricted Share Awards that are outstanding on the date hereofof this Agreement, in each case, only if and to the extent required by and in accordance with the applicable equity award’s terms of such Company Equity Awards as in effect on the date of this Agreement Agreement, or (B) grants or awards of Company Securities or Stock Options to newly hired employees in the ordinary course of business consistent with past practice, with a per share exercise price no less than the then-current market price of a share of Company Equity Awards required Common Stock and not subject to be made pursuant to the terms of existing employment any accelerated vesting or other compensation agreements or arrangements in effect provision that would be triggered as a result of the date hereof; provided that such grants or awards are pursuant to a form consummation of award agreement that has been made available to Parent or the transactions contemplated hereby and/or termination of employment, so long as (iix) the issuance aggregate number of shares Company Common Stock subject to such additional Company Stock Options does not exceed 100,000 and (y) the aggregate number of shares of Company Common Stock under the ESPP and pursuant subject to the terms thereof and Section 2.06 of this Agreement Company Stock Options granted to any individual newly hired employee does not exceed 5,000, or (iiiii) the issuance amend any term of equity interests of a wholly owned any Company Security or any Company Subsidiary of the Company to the Company Security (in each case, whether by merger, consolidation or another wholly owned Subsidiary of the Companyotherwise);
(d) merge, consolidate or, other than in the ordinary course of business substantially consistent with past practice, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiariesreorganization;
(e) (i) increase the salary, wages, benefits, bonuses incur any capital expenditures or other cash compensation payable any obligations or to become payable to the Company’s employees, officers, directors or Independent Contractorsliabilities in respect thereof, except for increases (Athose contemplated by the capital expenditure budget for the Company and its Subsidiaries that is attached to Section 7.01(e) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof, Company Disclosure Schedule (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under“Capex Budget”), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of acquire (other than for cause, as determined by the Companyi) any employee, officer, director, business or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part thereof (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise), or (ii) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, any other assets other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar immaterial assets acquired in the ordinary course of business consistent with past practice;
(g) sell, lease, license, pledge, transfer, subject to any Lien or otherwise dispose of any of its material assets or properties except (i) sales of inventory or used equipment in the ordinary course of business consistent with past practice, and (ii) Permitted Liens incurred in amounts substantially the ordinary course of business consistent with past practice;
(i) sell, assign, lease, license, pledge, transfer, abandon, subject grant to any Liencurrent or former director, permit to lapse officer, employee or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregate, except in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice;
(j) agree to any exclusivity, non-competition or similar provision or covenant limiting the ability consultant of the Company or any of its Subsidiaries to compete any increase in compensation, bonus or engage other benefits, except (A) increases in any line connection with promotions of businessnon-executive officer employees in the ordinary course of business consistent with past practices, (B) annual merit increases in base salaries of non-executive officer employees in accordance with any Person or past practices so long as such increases do not exceed $200,000 in any geographic areathe aggregate, or pursuant (C) bonuses granted in accordance with, and paid on the terms and conditions of, existing bonus plans, policies, agreements or arrangements listed on Section 5.16(a) of the Company Disclosure Schedule, (ii) grant to which any benefit current or right would be required to be given former director, officer, employee or lost as a result consultant of so competing or engaging, or which would have any such effect on Parent the Company or any of its Affiliates Subsidiaries any severance or termination pay or benefits or any increase in severance, change of control or termination pay or benefits, except in connection with actual termination in the ordinary course of any such Person to the extent required under Applicable Law or existing plans, policies, agreements or arrangements listed on Section 5.16(a) of the Company Disclosure Schedule, (iii) establish, adopt, or enter into any Company Employee Plan (other than offer letters that contemplate “at will” employment without severance benefits) or collective bargaining agreement, or amend (except as would not reasonably be expected to increase any benefit payable thereunder or any administrative expense thereof) any Company Employee Plan or collective bargaining agreement, (iv) take any action to accelerate any rights or benefits or take any action to fund or in any other way secure the payment of compensation or benefits under any Company Employee Plan, or (v) make any Person (after the Effective Timedate of this Agreement) a beneficiary of any retention or severance plan under which such Person is not as of the date of this Agreement a beneficiary which would entitle such Person to vesting, exceptacceleration or any other right as a consequence of consummation of the transactions contemplated by this Agreement;
(i) (i) except as required by GAAP (as agreed to by the Company’s independent auditor), write-down any of its material assets, including any Company IP, or (ii) make any change in any method of accounting principles, method or practices, except for any such change required by reason of a concurrent change in GAAP or Regulation S-X under the 1934 Act (as agreed to by the Company’s independent auditor);
(j) (i) repurchase, prepay or incur any Indebtedness, including by way of a guarantee or an issuance or sale of debt securities, or issue and sell options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, enter into any “keep well” or other Contract to maintain any financial statement or similar condition of another person or enter into any arrangement having the economic effect of any of the foregoing, or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, other than to the Company or any of its wholly owned Subsidiaries;
(k) enter into, terminate, renew, amend or modify in any material respect or fail to enforce any material term of any Material Contract, other than any entry into, renewal, amendment or modification of any Material Contract which would not have been required to be disclosed in any of clauses (iii) through (xi) and (xiii) through (xvi) of Section 5.14(a) if it had existed on the date of this Agreement, in each case, in connection the ordinary course of business consistent with Contracts entered into with customerspast practices;
(l) (i) pay, contractorsdischarge, distributorssettle or satisfy any material claims, resellersliabilities or obligations (whether absolute, partners accrued, asserted or suppliers of unasserted, contingent or otherwise), other than the Company and its Subsidiaries payment, discharge, settlement or similar arrangements, that (x) are made satisfaction in the ordinary course of business substantially consistent with past practice, (y) are on or as required by their terms substantially similar to any such restrictions existing as in effect on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any Agreement, of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assetsclaims, liabilities or business, except obligations reserved against on the Company Balance Sheet (for amounts not in excess of such changes that are required by (ireserves) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under incurred since the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings date of revolving loans under the Existing Credit Agreement and capital leases such financial statements in the ordinary course of business and except for intercompany loansconsistent with past practice, guaranteesin each case, advance the payment, discharge, settlement or capital contribution between satisfaction of which does not include any obligation (other than the payment of money) to be performed by the Company and or any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of following the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregateClosing Date, (ii) waive, relinquish, release, grant, transfer or assign any right of material value, or (iii) waive any material benefits of, or agree to modify in a manner materially any adverse respect, or fail to enforce, or consent to any matter with respect to which its consent is required under, any confidentiality, standstill or similar Contract to which the Company or any of its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than is a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreementparty;
(m) makeengage in (i) any trade loading practices or any other promotional sales or discount activity with any customers or distributors with any intent of accelerating to prior fiscal quarters (including the current fiscal quarter) sales to the trade or otherwise that would otherwise be expected (based on past practice) to occur in subsequent fiscal quarters, (ii) any practice which would have the effect of accelerating to prior fiscal quarters (including the current fiscal quarter) collections of receivables that would otherwise be expected (based on past practice) to be made in subsequent fiscal quarters, (iii) any practice which would have the effect of postponing to subsequent fiscal quarters payments by the Company or any of its Subsidiaries that would otherwise be expected (based on past practice) to be made in prior fiscal quarters (including the current fiscal quarter) or (iv) any other promotional sales or discount activity, in each case in clauses (i) through (iv) in a manner outside the ordinary course of business consistent with past practices;
(n) make or change or revoke any material Tax election, change any annual Tax tax accounting period, file adopt or change any material amended method of tax accounting, materially amend any Tax Return Returns or file any claims for material Tax Return in a manner inconsistent with past practicerefunds, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceedingclaim, audit or assessment, or surrender any material right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;
(o) institute, settle settle, or agree to settle any Proceedingsmaterial Proceeding pending or threatened before any arbitrator, court or other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregateGovernmental Authority; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;or
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than in the ordinary course of business or as contemplated by this Agreement (i) amendauthorize, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an Affiliate of the Company;
(s) voluntarily terminate, amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Act; or
(u) authorizeresolve, commit or agree to take any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentence.
Appears in 2 contracts
Samples: Merger Agreement (Stellent Inc), Merger Agreement (Oracle Corp)
Conduct of the Company. The From the date hereof until the Effective Time, the Company covenants and agrees thatits Subsidiaries shall conduct their business and operate their properties in the ordinary course consistent with past practice and shall use their reasonable best efforts to preserve intact their business organizations and relationships with third parties and to keep available the services of their present officers and employees. Without limiting the generality of the foregoing, except for matters (i) expressly permitted or expressly contemplated by this Agreement, (ii) set forth on Part 6.01 of the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken with the prior written consent of Parent (which shall not be unreasonably withheld, conditioned or delayed), (v) required as contemplated by Applicable Law this Agreement or as set forth in the rules and regulations of NasdaqCompany Disclosure Schedule, from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereof, neither the Company (A) shall, and shall cause each nor any of its Subsidiaries to use commercially reasonable efforts to (1) conduct its business in the ordinary course in all material respects, substantially consistent with past practice, (2) to the extent consistent with the foregoing clause (1), maintain its business as a going concern and (3) keep available the services of its current officers and key employees and to preserve the goodwill of and maintain satisfactory relationships with those Persons having material business relationships with the Company and its Subsidiaries, and (B) shall not, and shall cause each of its Subsidiaries not toshall:
(a) amend the Company’s certificate of incorporation or bylaws, or amend any certificate of incorporation or bylaws, or other comparable charter or organizational documents, of the Company’s Subsidiaries;
(b) other than with respect to a direct or indirect wholly owned Subsidiary of the Company, (i) establish a record date for, declare, set aside or pay any dividends on, dividend or make any other distributions (whether in cash, stock, property or otherwise) in respect of, or enter into any agreement distribution with respect to any share of its capital stock, other than (x) customary quarterly cash dividends on the voting of, Shares in an amount not to exceed $.188 per Share per quarter and (y) dividends and other distributions paid by any capital stock Subsidiary of the Company to the Company or any wholly-owned Subsidiary of its Subsidiaries the Company;
(or securities convertible or exchangeable therefor)b) repurchase, (ii) split, reverse split, combine, subdivide or reclassify redeem or otherwise amend the terms acquire any shares of any capital stock (or other securities convertible of, or exchangeable therefor) of other ownership interests in, the Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c), issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), or (iv) purchase, redeem or otherwise acquire or offer to purchase, redeem or acquire any Company Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPP;
(c) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber or dispose of sell any equity interests of the Company Shares, or incur any obligation securities convertible into Shares, or any rights, warrants or options to make acquire any payments to any Person based on the price or value of any Company SecuritiesShares, other than (i) the issuance of shares of Company Common Stock issuances pursuant to (A) the terms of Company Equity Awards stock-based awards or options that are outstanding on the date hereof, as referenced in Section 4.05 of this Agreement, or are granted in accordance with the applicable following clause (ii), and (ii) additional options to acquire Shares granted at fair market value or other awards based on Shares under the terms of the Company's stock plans as in effect on the date hereof in the ordinary course consistent with past practice, but in no event shall such options and awards relate to more than 100,000 Shares, nor shall any such options or awards be granted to any officers or directors of the Company Equity Awards or contain any provisions relating to the acceleration of vesting that are triggered by the execution of this Agreement or the consummation of the Merger;
(d) amend its Certificate of Incorporation or By-Laws or other comparable organizational documents or amend any terms of the outstanding securities of the Company or its Subsidiaries;
(e) merge or consolidate with any other Person, make any investment in any other Person, including any joint venture, or acquire the stock or assets or rights of any other Person other than (i) pursuant to existing contracts or commitments as set forth in Section 6.01 of the Company Disclosure Schedule, (ii) in each case in the ordinary course of business consistent with past practice, purchases of raw materials, property, plant and equipment, services and items used or consumed in the manufacturing process, (iii) capital expenditures made pursuant to the Company's 2000 Capital Expenditure Program, a copy of which has been made available to Parent, or (iv) transactions that are in the ordinary course consistent with past practice and not individually in excess of $5 million;
(f) sell, lease, license or otherwise dispose of any Subsidiary or any assets, securities, rights or property other than (but for purposes of clauses (i) - (iii), excluding matters addressed in Section 6.01(r)) (i) pursuant to existing contracts or commitments as set forth in Section 6.01 of the Company Disclosure Schedule, (ii) sales of inventory and equipment in the ordinary course of business consistent with past practice, or (iii) transactions that are in the ordinary course consistent with past practice and not individually in excess of $10 million;
(g) incur any indebtedness (whether or not reflected on the Company's balance sheet) for borrowed money, guarantee any such indebtedness, enter into any new or amend existing facilities relating to indebtedness, issue or sell any debt securities or warrants or other rights to acquire any debt securities or guarantee any debt securities, other than any indebtedness, guarantee or issuance incurred under current facilities (or renewals or replacements thereof made in consultation with Parent) in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $4.6 billion outstanding at any time or incurred between the Company and any of its wholly owned Subsidiaries or between any of such wholly owned Subsidiaries;
(h) except as required under any collective bargaining agreement (whether now or hereafter in effect) or under Section 2.05 or as may be mutually agreed upon between Parent and the Company, enter into or adopt any new, or amend any existing, Employee Arrangement, other than as required by law, except that, in order to retain a current employee or recruit a new employee, in each case consistent with past practice, the Company or its Subsidiaries may amend Employee Arrangements with individual employees who are not officers or directors of the Company if such amendments will result in not more than a de minimis additional cost to the Company or its Subsidiaries and will not materially increase the obligations of the Company or its Subsidiaries;
(i) except (i) as permitted under Section 6.01(h) or (ii) to the extent required under any collective bargaining agreement (whether now or hereafter in effect) or by written employment agreements existing on the date of this Agreement and listed in the Company Disclosure Schedule, increase the compensation payable or to become payable to its officers, directors or employees, except for increases in the ordinary course of business consistent with past practice in salaries or wages of employees (who are not executive officers or directors of the Company or any of its Subsidiaries) that, in any event, do not result in aggregate increases in such compensation by more than 2% over the compensation in effect on the date of this Agreement Agreement;
(j) renew any collective bargaining agreement or enter into any new collective bargaining agreement, if such renewed or new collective bargaining agreement would materially increase the costs and/or obligations imposed on the Company and its Subsidiaries thereunder;
(Bk) grants contribute any amount to any Employee Arrangement or awards of Company Securities any trust or Company Equity Awards required to be made pursuant other arrangement funding any Employee Arrangement, except to the extent required by the existing terms of existing employment such Employee Arrangement, trust or other compensation agreements funding arrangement, by any collective bargaining agreement now or arrangements hereafter in effect as of effect, by any written employment agreement existing on the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary of and listed in the Company to the Company Disclosure Schedule, or another wholly owned Subsidiary of the Companyby applicable law;
(di) merge, consolidate or, other than in the ordinary course of business substantially consistent with past practice, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, of complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization or (ii) enter into any agreement or exercise any discretion providing for acceleration of payment or performance as a result of a change of control of the Company or any of its Subsidiaries;
(em) renew or enter into any non-compete, exclusivity or similar agreement that would restrict or limit, in any material respect, the operations of the Company or its Subsidiaries, or, after the Effective Time, of Parent or its Subsidiaries;
(n) enter into, modify in any material respect, amend in any material respect or terminate any (i) increase the salaryContract or (ii) agreement having a term longer than one year and having an aggregate value over its term greater than $10 million;
(i) renew, wagesenter into, benefits, bonuses amend or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases waive any material right under (A) required any contract with or loan to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as any Affiliate of the date hereofCompany (other than its wholly-owned Subsidiaries), except with respect to certain employment matters as permitted under other covenants contained herein, (B) required under any Company Employee Plan pursuant distribution agreement that is not terminable without penalty on thirty days notice, other than any distribution agreement which involves or would be expected to the terms involve monthly sales not in effect as excess of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made $25,000 and which is otherwise in the ordinary course of business and substantially consistent with past practicepractice or (C) any JV Agreement except as permitted under Section 6.01(e)(2) of the Company Disclosure Schedule, or (Dii) exercise any voting or veto rights under the United Biscuits transaction documents (as set forth in connection Section 4.10(h) of the Company Disclosure Schedule) with changes respect to benefits as part acquisitions, dispositions or the incurrence of annual enrollment; provided that additional indebtedness, other than (x) the refinancing described in such changes made as part of annual enrollment are made in the ordinary course of business, documents and (iiy) the fulfillment of any existing commitments of the Company and its Subsidiaries under such documents;
(p) settle or compromise any material litigation, or waive, release or assign any material claims, including with respect to any Company Intellectual Property Rights;
(q) adopt any change, other than as required by the terms of the applicable Company Employee Plan SEC or under Applicable Lawby GAAP, enter intoin its accounting policies, adopt, amend (including by accelerating the vesting, payment procedures or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereofpractices;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
(ir) sell, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse lease or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregate, except in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice;
(j) agree to any exclusivity, non-competition or similar provision or covenant limiting the ability of the Company Property Rights or any of its Subsidiaries to compete brand or engage in any line of business, with any Person or in any geographic area, or other than pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, agreements in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing place on the date of this Agreement hereof and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases disclosed in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i6.01(r) of the Company Disclosure Schedule;
(o) institute, settle or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than in the ordinary course of business or as contemplated by this Agreement (i) amend, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an Affiliate of the Company;
(s) voluntarily terminate, amend agree or fail commit to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Act; or
(u) authorize, commit or agree to take do any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentenceforegoing.
Appears in 2 contracts
Samples: Merger Agreement (Nabisco Inc), Merger Agreement (Philip Morris Companies Inc)
Conduct of the Company. The Company covenants and agrees that, except for matters (i) Except as expressly permitted or expressly ---------------------- contemplated by this Agreement, Agreement or as described or provided for in any Company SEC Filing or as disclosed in writing by the Company (ii) set forth on Part 6.01 of including in the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken with prior to the prior written consent date of Parent (which shall not be unreasonably withheld, conditioned or delayed), (v) required by Applicable Law or the rules and regulations of Nasdaqthis Agreement, from the date hereof until the earlier to occur of the Effective Time and the termination of this Agreement in accordance with Article 8 hereof, the Company (A) shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1i) shall conduct its their business in the ordinary course in all material respects, substantially consistent with past practice, (2) to the extent consistent with the foregoing clause (1), maintain its business as a going concern practice and (3ii) shall use their respective best efforts to preserve intact their business organizations and relationships with third parties and to keep available the services of its current their present officers and key employees and to preserve the goodwill of and maintain satisfactory relationships with those Persons having material business relationships with the Company and its Subsidiariesemployees. Except as otherwise approved in writing by RHCI or as expressly contemplated by this Agreement, and (B) shall notwithout limiting the generality of the foregoing, and shall cause each of its Subsidiaries not tofrom the date hereof until the Effective Time:
(a) amend the Company’s Company will not adopt or propose any change in its certificate of incorporation or bylaws, or amend any certificate of incorporation or bylaws, or other comparable charter or organizational documents, of the Company’s Subsidiaries;
(b) other than the Company will not, and, except with respect to a direct the Apex Transaction (as hereinafter defined), will not permit any of its Subsidiaries to, merge or indirect consolidate with any other Person (other than another wholly owned Subsidiary Subsidiary) or acquire a material amount of stock or assets of any other Person;
(c) except with respect to the sale (whether by sale of all or substantially all of its assets or capital stock, or by merger or other business combination) of, or the discontinuance of the Companyoperations of, Apex Healthcare, Inc. and its Subsidiaries (the "Apex Transaction"), the Company will not, and will not permit any of its Subsidiaries to, sell, lease, license or otherwise dispose of any material assets or property except (i) pursuant to existing contracts or commitments, (ii) in the ordinary course consistent with past practice or (iii) transfers between the Company and/or its Subsidiaries;
(d) except in respect of the Company Preferred Shares, the Company will not declare or pay any dividends or make any distributions on any Company Securities;
(e) the Company will not, and will not permit any of its Subsidiaries to, (i) establish a record date forissue, declare, set aside deliver or pay any dividends onsell, or make any other distributions (whether in cashauthorize or propose the issuance, stock, property delivery or otherwise) in respect of, or enter into any agreement with respect to the voting sale of, any capital stock Company Securities or Company Subsidiary Securities, other than the issuance of the Company Preferred Shares, the issuance of Company Securities under the Ramsay Managed Care, Inc. 1994 Stock Option Plan the Ramsay Managed Care, Inc. 1996 Long Term Incentive Plan and the Ramsay Managed Care, Inc. 1994 Employee Stock Purchase Plan or any the issuance of its Subsidiaries (Shares either upon the exercise of Company Options or securities convertible Company Warrants or exchangeable therefor)conversion of the Company Preferred Shares, (ii) split, reverse split, combine, subdivide combine or reclassify any Company Securities or otherwise amend the terms of any capital stock (Company Subsidiary Securities or securities convertible or exchangeable therefor) of the Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c), issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), or (iv) purchaserepurchase, redeem or otherwise acquire or offer to purchase, redeem or acquire any Company Securities or any Company Subsidiary Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPP;
(cf) issueexcept as otherwise expressly permitted hereby, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber or dispose of any equity interests of the Company or incur any obligation to will not make any payments to commitment or enter into any Person based on the price contract or value of any Company Securities, other than (i) the issuance of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement or (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company material to the Company or another wholly owned Subsidiary of the Company;
(d) merge, consolidate or, other than and its Subsidiaries taken as a whole except in the ordinary course of business substantially consistent with past practice, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries;
(e) (i) increase the salary, wages, benefits, bonuses or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
(ig) sellexcept as otherwise expressly permitted hereby, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregate, except in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice;
(j) agree to any exclusivity, non-competition or similar provision or covenant limiting the ability of the Company or will not, and will not permit any of its Subsidiaries to, agree or commit to compete or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or do any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Timeforegoing;
(kh) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiarywill not, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;
(o) institute, settle or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor will not permit any of its Subsidiaries shall settle to, take or agree to settle commit to take any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than in the ordinary course of business or as contemplated by this Agreement (i) amend, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract action that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into make any Contract with an Affiliate of the Company;
(s) voluntarily terminate, amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) representation and warranty of the Company Disclosure Schedule;
(t) conduct hereunder inaccurate in any reduction-in-force material respect at, or as of employees or other service providers or otherwise implement any layoffstime prior to, in each case that could implicate the WARN ActEffective Time; or
(ui) authorize, commit or agree to take any of the foregoing actions. Notwithstanding anything set forth except as otherwise provided in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In additionAgreement, the Company may, and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect upon RHCI's request will, upon the health and safety occurrence of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with condition entitling the Company or to repurchase any Subsidiary Shares subject to such repurchase, take any and all steps to consummate the repurchase of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentencesuch Shares.
Appears in 2 contracts
Samples: Merger Agreement (Ramsay Managed Care Inc), Merger Agreement (Ramsay Health Care Inc)
Conduct of the Company. The Company covenants and agrees that, except for matters (i) expressly permitted From the date of this Agreement until the earlier of the Acceptance Time or expressly contemplated by the termination of this Agreement, (ii) the Company shall, and shall cause each of its Subsidiaries to, conduct its business in the ordinary course consistent with past practice and in compliance with all material Applicable Laws and all material governmental authorizations, and use its commercially reasonable efforts to preserve intact its present business organization, maintain in effect all Company Permits, keep available the services of its directors, officers and employees and maintain satisfactory relationships with its customers, lenders, suppliers and others having material business relationships with it. Without limiting the generality of the foregoing and to the fullest extent permitted by Applicable Law, from the date of this Agreement until the earlier to occur of the Acceptance Time or the termination of this Agreement, except as set forth on Part 6.01 in Section 7.1 of the Company Disclosure ScheduleLetter, (iii) reasonably undertaken in connection or with any COVID-19 Measures, (iv) undertaken with the Parent’s prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed), (v) or to the extent permitted or required by Applicable Law or the rules and regulations of Nasdaq, from the date hereof until the earlier of the Effective Time and the termination another Section of this Agreement in accordance with Article 8 hereofAgreement, the Company (A) shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) conduct its business in the ordinary course in all material respects, substantially consistent with past practice, (2) to the extent consistent with the foregoing clause (1), maintain its business as a going concern and (3) keep available the services of its current officers and key employees and to preserve the goodwill of and maintain satisfactory relationships with those Persons having material business relationships with the Company and its Subsidiaries, and (B) shall not, and shall cause each not permit any of its Subsidiaries not to:
(a) amend the Company’s certificate its articles of incorporation or bylawsincorporation, or amend any certificate of incorporation or bylaws, bylaws or other comparable charter similar organizational documents (whether by merger, consolidation or organizational documents, of the Company’s Subsidiariesotherwise);
(b) other than with respect to a direct or indirect wholly owned Subsidiary of the Company, (i) establish a record date forsplit, combine or reclassify any shares of its capital stock, (ii) declare, set aside or pay any dividends on, dividend or make any other distributions distribution (whether in cash, stock, property or otherwiseany combination thereof) in respect of, or enter into of any agreement with respect to the voting of, any shares of its capital stock of the Company or other securities (other than dividends or distributions by any of its Subsidiaries (or securities convertible or exchangeable therefor), (ii) split, reverse split, combine, subdivide or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) of the Company or any of its wholly-owned Subsidiaries, (iii) except as expressly provided in Section 6.01(c), issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), or (iviii) purchaseredeem, redeem repurchase, cancel or otherwise acquire or offer to purchaseredeem, redeem repurchase, or acquire otherwise acquire, any of its securities or any securities of any of its Subsidiaries, other than the cancellation of Company Stock Options in connection with the exercise thereof or the repurchase of Shares from former service providers pursuant to Company rights arising under the terminations of any such former service providers;
(i) issue, deliver or sell, or authorize the issuance, delivery or sale of, any shares of any Company Securities or Company Subsidiary Securities, except for other than the net settlement issuance of Company Equity Awards or acquisitions of any shares of the Company Common Stock by upon the Company, in each case, in satisfaction by holders exercise of Company Equity Awards Stock Options that are outstanding on the date of the applicable withholding taxes or this Agreement in accordance with the terms of the ESPP;
(c) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company Securities, other than (i) the issuance of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect those options on the date of this Agreement or (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance amend any term of shares of any Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement Security or any Company Subsidiary Security (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company in each case, whether by merger, consolidation or another wholly owned Subsidiary of the Companyotherwise);
(d) mergeincur any capital expenditures or research and development expenditures (whether or not capitalized or expensed for financial accounting purposes) or any obligations or liabilities in respect thereof, except for those contemplated to be incurred for the third fiscal quarter of fiscal year 2009, which shall not exceed $3,625,000 in the aggregate and the fourth fiscal quarter of fiscal year 2009, which shall not exceed $3,375,000 in the aggregate;
(i) acquire (including by merger, consolidation, or acquisition of stock or assets) any equity interest in any corporation, partnership, other business organization or any division thereof, or any material amount of assets from any other Person, (ii) merge or consolidate orwith any other Person or (iii) adopt a plan of complete or partial liquidation, dissolution, recapitalization or restructuring;
(f) sell, lease, license or otherwise dispose of any material Subsidiary or any material amount of assets, securities or property except (i) pursuant to an existing Material Contract or (ii) with respect to sale or license of the Company’s products, in the ordinary course consistent with past practice;
(g) create or incur any Lien on any material asset other than Permitted Liens or any immaterial Lien incurred in the ordinary course of business consistent with past practices;
(h) make any loan, advance or investment either by purchase of stock or securities, contributions to capital, property transfers, or purchase of any property or assets of any Person, other than investments in its wholly-owned Subsidiaries or otherwise made in the ordinary course of business consistent with past practices, including advances to employees for business related expenses;
(i) create, incur, assume, suffer to exist or otherwise be liable with respect to any Indebtedness except trade payables incurred in the ordinary course of business consistent with past practices;
(j) (i) enter into any Contract that would have been a Company Material Contract were the Company or any of its Subsidiaries a party or subject thereto on the date of this Agreement other than (except with respect to any Contract that would have been a Company Material Contract pursuant to clause (xii) of Section 5.14) in the ordinary course consistent with past practices or (ii) terminate or amend in any material respect any such Contract or any Company Material Contract or waive any material right thereunder, other than in the ordinary course of business substantially consistent with past practice;
(k) terminate, suspend, abrogate, amend or modify in any material respect any Company Permit;
(l) except as required by Applicable Laws or existing Employee Plans, (i) grant or increase any severance or termination pay to (or, subject to the provisions of Section 7.1(l)(v) below, amend any existing arrangement with) any of their respective directors, independent contractors, officers or employees, (ii) increase benefits payable under any severance or termination pay policies or employment agreements existing as of the date of this Agreement, (iii) other than agreements that are entered into in the ordinary course of business, are terminable at will and can be terminated without liability to the Company, enter into strategic alliance any employment, deferred compensation or other similar legal partnership agreement (or any amendment to any such existing agreement) with any Personof their respective directors, file a voluntary petition for bankruptcy independent contractors, officers or liquidationemployees, dissolve(iv) establish, liquidateadopt or amend any Employee Plan or any collective bargaining, restructure bonus, profit sharing, thrift, pension, retirement, deferred compensation, severance, compensation, stock option, restricted stock or recapitalize or adopt a other benefit plan or agreement ofarrangement covering any of their respective directors, independent contractors, officers or employees, or resolutions providing for or authorizing(v) materially increase the compensation, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization bonus or other reorganization benefits payable to any of their respective directors, independent contractors, officers or employees;
(m) make any change in any method of accounting or accounting principles or practice, except for any such change required by reason of a concurrent change in GAAP or Regulation S-X under the 1934 Act, as approved by its independent public accountants;
(n) settle, or offer or propose to settle (i) any litigation, investigation, arbitration, proceeding or other claim involving or against the Company or any of its Subsidiaries that is material to the Company and its Subsidiaries, taken as a whole or involving a payment by the Company or its Subsidiaries in excess of $50,000, (ii) any stockholder litigation or dispute against the Company or any of its officers or directors or (iii) any litigation, arbitration, proceeding or dispute that relates to the transactions contemplated hereby;
(eo) (i) increase grant any license with respect to Company Intellectual Property other than non-exclusive licenses granted in the salary, wages, benefits, bonuses ordinary course of business consistent with past practices or other cash compensation payable take any action or omit to take any action that would reasonably be expected to cause any Company Intellectual Property used or held for use in its business to become payable invalidated, abandoned or dedicated to the Company’s employees, officers, directors or Independent Contractorspublic domain, except for increases as would not reasonably be expected to have a Material Adverse Effect on the Company;
(Ap) required to be made pursuant to pay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the terms of existing employment payment, discharge or other compensation agreements or arrangements in effect as of the date hereofsatisfaction, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
(iq) sell, assign, lease, license, pledge, transfer, abandon, subject fail to any Lien, permit use reasonable efforts to lapse maintain existing material insurance policies or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having comparable replacement policies to the extent available for a value in excess of $500,000 individually or $5,000,000 in the aggregate, except in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practicesimilar reasonable cost;
(jr) agree to any exclusivity, non-competition or similar provision or covenant limiting the ability of the Company or any of its Subsidiaries to compete or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be except as required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practiceby Applicable Law, (yi) are make or change any material Tax election or take or change any material position on terms substantially similar to any such restrictions existing material Tax Return filed on or after the date of this Agreement and Agreement, (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(kii) adopt or change any of the material accounting method that is inconsistent with elections made, positions taken or methods used by the Company materially affecting its assets, liabilities in preparing or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any filing similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases Tax Returns in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereofprior periods, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file any material amended Tax Return Returns or file claims for material Tax refunds, (iv) enter into any closing agreement related to any material Tax Return in a manner inconsistent with past practiceor Tax asset, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. lawv) in respect of any material Tax, settle surrender any material Tax Proceedingclaim, audit or assessment; (vi) surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or (vii) consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside assessment; (viii) settle or resolve any material Tax controversy or (ix) take or omit to take any other action, if any such action or omission would have the ordinary course effect of business;
(n) make materially increasing the Tax liability or reducing any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) Tax asset of the Company Disclosure Schedule;
(o) institute, settle or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than in the ordinary course of business or as contemplated by this Agreement (i) amend, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an Affiliate of the CompanySubsidiary;
(s) voluntarily terminateenter into any lease or sublease of real property (whether as lessor, amend sublessor, lessee or sublessee) or change, terminate or fail to exercise any right to renew any lease or preserve any Company Communications License as set forth on Part 6.01(s) sublease of the Company Disclosure Schedule;real property; or
(t) conduct any reduction-in-force of employees agree, resolve or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Act; or
(u) authorize, commit or agree to take do any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentenceforegoing.
Appears in 2 contracts
Samples: Merger Agreement (Catapult Communications Corp), Merger Agreement (Ixia)
Conduct of the Company. The Company covenants and agrees that, except Except as provided for matters (i) expressly permitted or expressly contemplated by this Agreement, (ii) set forth on Part in Item 6.01 of the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken with the prior written consent of Parent (which shall not be unreasonably withheld, conditioned or delayed), (v) required by Applicable Law or the rules and regulations of NasdaqLetter, from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereofTime, the Company (A) shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) conduct its business in all material respects in the ordinary course in all material respects, substantially of business consistent with past practice, (2) practices and shall use its best efforts to the extent consistent with the foregoing clause (1), maintain preserve intact its business as a going concern organization and (3) relationships with customers and other third parties and to keep available the services of its current their present officers and key employees and to preserve employees. Without limiting the goodwill generality of and maintain satisfactory relationships with those Persons having material business relationships with the foregoing, from the date hereof until the Effective Time, except as contemplated by this Agreement, as provided for in Item 6.01 of the Company and its SubsidiariesLetter, and or as otherwise approved by Acquiror (B) which approval shall not, and shall cause each of its Subsidiaries not to:be unreasonably withheld or delayed):
(a) amend the Company’s Company shall not adopt or propose any change to its certificate of incorporation or bylaws, or amend any certificate of incorporation or bylaws, or other comparable charter or organizational documents, of the Company’s Subsidiaries;.
(b) the Company shall not merge or consolidate with any other than with respect to a direct Person or indirect wholly owned Subsidiary acquire the stock or assets of any other Person;
(c) the CompanyCompany shall not sell, lease, license or otherwise dispose of any material amount of assets, securities or property or interest therein;
(d) the Company shall not (i) establish a record date for, declare, set aside or pay any dividends on, on or make any other distributions (whether in cash, stock, property securities or otherwiseproperty) in respect of, or enter into any agreement with respect to the voting of, any capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), (ii) split, reverse split, combine, subdivide or reclassify or otherwise amend the terms of any capital stock (or securities convertible split, combine or exchangeable therefor) of the Company reclassify any capital stock, or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c), issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution forfor any capital stock, shares of capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), or (ivii) purchase, redeem or otherwise acquire or offer to purchase, redeem or acquire any Company Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Companyits capital stock, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPP;
(ciii) issue, deliver, sell, grantauthorize, announcepledge or otherwise create a Lien on, pledge, transfer, subject to any Lien, otherwise encumber shares of capital stock or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company Securitiessecurities convertible into capital stock, other than (i) issuances of Shares upon the issuance valid exercise of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding any Options existing on the date hereof, hereof in accordance with the applicable terms their present terms, (iv) make any loans, advances or capital contributions to or investments in any other Person, (v) incur any indebtedness for borrowed money, or guarantee any indebtedness for borrowed money of such or on behalf of another Person (except that Company Equity Awards may borrow additional available amounts under lines of credit in place as in effect on of the date of this Agreement Agreement), (vi) make any material change in its methods or principles of accounting or in its maintenance of its books and records, except as required by GAAP or the SEC as concurred in by the Company’s independent auditor, (Bvii) grants settle any material claim, action or awards of Company Securities or Company Equity Awards required to be made pursuant proceeding involving money damages, except to the terms of extent subject to reserves existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants hereof in accordance with GAAP, (viii) enter into any consent decree, injunction or awards are pursuant to a similar restraint or form of award agreement that has been made available equitable relief in settlement of any suit, action, proceeding, or regulatory investigation pending, except for such consent decrees, injunctions, or restraints which do not individually or in the aggregate have a Material Adverse Effect, (ix) transfer or license to Parent any Person or (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement otherwise extend, amend or (iii) the issuance of equity interests of a wholly modify any Intellectual Property Rights owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of by the Company;
(d) merge, consolidate or, other than in the ordinary course of business substantially consistent with past practiceor pursuant to any contracts, enter into strategic alliance or similar legal partnership with any Personagreements, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement ofarrangements, or resolutions providing for understandings already in place, (x) modify, amend, or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization terminate in any manner adverse to the Company any of the Company or any of its Subsidiaries;
(e) (i) increase the salary, wages, benefits, bonuses or Material Contracts other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made than in the ordinary course of business, and or (iixi) other than as expressly permitted in section 6.04 hereof, take any action to omit or take any action for the purpose of preventing, delaying, or impeding the consummation of the Merger or the other transactions contemplated by this Agreement.
(e) except as required by the terms contracts or compensation plans existing as of the date hereof and binding on the Company, to comply with applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangementlaw, or policy that would be a as set forth below, the Company Employee Plan if shall not (i) increase in effect on any material respect the date hereof;
amount of compensation or fringe benefits of, pay any bonus to, or gxxxx xxxxxxxxx or termination pay to, any director, Officer or other management level employee of the Company (fexcept for the payment of compensation and benefits (excluding severance pay) hire, engage or terminate the employment or engagement of to new employees (other than for cause, as determined officers) hired by the Company) any employee, officer, directorCompany in the ordinary course of business, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit increases to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets non-corporate restaurant employees if such compensation increases are in the ordinary course of business and in amounts substantially consistent with past practicepractices), (ii) make any increase in, or commitment to increase, or adopt, any Employee Plans, (iii) amend or change the exercisability or vesting of any Options, or reprice any Options or authorize cash payments in exchange for any Options, (iv) modify any employment, severance or termination agreement with any director, Officer or other employee of the Company existing as of the date hereof, or enter into any employment, severance, termination or other agreement with any director, Officer or other employee of the Company the benefits of which are in whole or in part contingent upon, or the terms of which are materially altered upon, the occurrence of a transaction involving the Company of the nature contemplated hereby;
(f) the Company shall not exempt any Third Party from, or to render inapplicable to any Acquisition Proposal, the restrictions on “business combinations” of applicable Florida Law;
(g) the Company shall not (i) sellenter into any new material line of business, assign, lease, license, pledge, transfer, abandon, subject or (ii) incur or commit to any Lien, permit to lapse capital expenditures other than normal routine maintenance capital expenditures consistent with past practices and other non-routine capital expenditures exceeding $25,000 in the aggregate;
(h) the Company will not discharge or otherwise dispose of forgive any assets, properties, or Company Intellectual Property, in each case having a value liabilities in excess of $500,000 individually or $5,000,000 in the aggregate25,000, except in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice;business.
(j) agree to any exclusivity, non-competition or similar provision or covenant limiting the ability of the Company or any of its Subsidiaries to compete or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;
(o) institute, settle or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities Company shall not agree or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree commit to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than in the ordinary course of business or as contemplated by this Agreement (i) amend, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an Affiliate of the Company;
(s) voluntarily terminate, amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Act; or
(u) authorize, commit or agree to take do any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentenceforegoing.
Appears in 2 contracts
Samples: Merger Agreement (Roadhouse Grill Inc), Merger Agreement (Steakhouse Partners Inc)
Conduct of the Company. The Company covenants and agrees that, except for matters (i) expressly permitted or expressly contemplated by this Agreement, (ii) set forth on Part 6.01 of the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken with the prior written consent of Parent (which shall not be unreasonably withheld, conditioned or delayed), (v) required by Applicable Law or the rules and regulations of Nasdaq, from From the date hereof until the earlier of the Effective Time and or the termination of this Agreement in accordance with Article 8 hereofAgreement, the Company (A) shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) to, conduct its business in the ordinary course in all material respects, substantially consistent with past practicepractice and use its reasonable best efforts to (i) preserve intact its present business organization, (2ii) to the extent consistent with the foregoing clause maintain in effect all of its foreign, federal, state and local licenses, permits, consents, franchises, approvals and authorizations, (1), maintain its business as a going concern and (3iii) keep available the services of its current directors, officers and key employees and to preserve the goodwill of and (iv) maintain satisfactory relationships with those Persons its customers, lenders, suppliers and others having material business relationships with it. Without limiting the generality of the foregoing, except as expressly contemplated by this Agreement or set forth in Section 6.1 of the Company and its SubsidiariesDisclosure Letter, and without the prior written consent of Parent (Bwhich consent, in the case of paragraph (o) or (s) (solely to the extent such paragraph (s) relates to paragraph (o)) shall not be unreasonably conditioned, withheld or delayed), the Company shall not, and nor shall cause each it permit any of its Subsidiaries not to:
(a) amend the Company’s certificate its articles of incorporation or bylawsincorporation, or amend any certificate of incorporation or bylaws, bylaws or other comparable charter similar organizational documents (whether by merger, consolidation or organizational documents, of the Company’s Subsidiariesotherwise);
(b) other than with respect to a direct or indirect wholly owned Subsidiary of the Company, (i) establish a record date forsplit, combine or reclassify any shares of its capital stock, (ii) declare, set aside or pay any dividends on, dividend or make any other distributions distribution (whether in cash, stock, stock or property or otherwiseany combination thereof) in respect ofof its capital stock, or enter into any agreement with respect to the voting of, any capital stock of the Company or except for dividends by any of its Subsidiaries (or securities convertible or exchangeable therefor), (ii) split, reverse split, combine, subdivide or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) of the Company or any of its wholly-owned Subsidiaries, (iii) except as expressly provided in Section 6.01(c)redeem, issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), or (iv) purchase, redeem repurchase or otherwise acquire or offer to purchaseredeem, redeem repurchase, or otherwise acquire any Company Securities or any Company Subsidiary Securities, except for (iv) place any limitation on the net ability of any Subsidiary to pay dividends or return capital or repay intercompany loans or interest due thereon or (v) constrict or prohibit any Subsidiary from selling, transferring, conveying or assigning any rights, assets or liabilities to any other Subsidiary;
(c) (i) issue, deliver or sell, or authorize the issuance, delivery or sale of, any shares of any Company Securities or Company Subsidiary Securities, other than the issuance of (A) any shares of the Company Stock upon the exercise of Company Stock Options or settlement of Company Equity Awards or acquisitions of shares of Company Common Stock any restricted stock unit award held by the Companyany employee, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPP;
(c) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber such option or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company Securities, other than (i) the issuance of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are award as outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as and in effect on the date of this Agreement or and (B) grants or awards of any Company Subsidiary Securities or Company Equity Awards required to be made pursuant to the terms of existing employment Company or any other compensation agreements or arrangements in effect as Subsidiary of the date hereof; provided that such grants Company or awards are pursuant to a form (ii) amend any term of award agreement any Company Security or any Company Subsidiary Security (in each case, whether by merger, consolidation or otherwise);
(d) in any calendar quarter, incur any capital expenses for Company Medical Equipment in excess of $250,000;
(e) incur any capital expenditures for any equipment other than Company Medical Equipment, or any obligations or liabilities in respect thereof, except for (i) those contemplated by the Company Budget that has been made available to Parent or prior to the date of this Agreement and (ii) any unbudgeted capital expenditures not to exceed $10,000 individually or $75,000 in the issuance aggregate;
(f) acquire (by merger, consolidation, acquisition of shares stock or assets or otherwise), directly or indirectly, any assets, securities, properties, interests or businesses, other than supplies in the ordinary course of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary business of the Company and its Subsidiaries in a manner that is consistent with past practice;
(g) sell, lease or otherwise transfer, or create or incur any Lien on, any Company Medical Equipment, except for any Liens that arise with respect to Company Medical Equipment that is acquired after the date hereof in compliance with this Agreement;
(h) sell, lease or otherwise transfer, or create or incur any Lien on, any of the Company's or its Subsidiaries' assets (other than Company Medical Equipment), securities, properties, interests or businesses, other than (i) sales of inventory or obsolete equipment in the ordinary course of business consistent with past practice and (ii) sales of assets, securities, properties, interests or businesses with a sale price (including any related assumed indebtedness) that does not exceed $5,000 individually or $25,000 in the aggregate;
(i) permit to lapse any material Intellectual Property owned by the Company or another wholly owned Subsidiary any of the Companyits Subsidiaries;
(dj) mergeother than in connection with actions permitted by Section 6.1(e) or Section 6.1(f), consolidate ormake any loans, advances or capital contributions to, or investments in, any other Person, other than in the ordinary course of business substantially consistent with past practice;
(k) create, incur, assume, suffer to exist or otherwise be liable with respect to any indebtedness for borrowed money or guarantees thereof other than in the ordinary course of business and in amounts and on terms consistent with past practices;
(l) enter into strategic alliance into, amend or similar legal partnership with modify in any Personmaterial respect or terminate any Material Contract or otherwise waive, file a voluntary petition for bankruptcy release or liquidationassign any material rights, dissolve, liquidate, restructure claims or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization benefits of the Company or any of its Subsidiaries;
(em) (i) increase with respect to any director, officer or employee of the salaryCompany or any of its Subsidiaries, wages, benefits, bonuses or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required grant or increase any severance or termination pay to be made pursuant to the terms of (or amend any existing employment severance pay or other compensation agreements termination arrangement) or arrangements in effect as of the date hereof, (B) required under enter into any Company Employee Plan pursuant to the terms in effect as of the date hereof employment, deferred compensation or Collective Bargaining Agreement other similar agreement (or under Applicable Lawamend any such existing agreement), (C) made in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than increase benefits payable under any existing severance or termination pay policies, (iii) establish, adopt or amend (except as required by the terms Applicable Law) any collective bargaining, bonus, profit-sharing, thrift, pension, retirement, deferred compensation, stock option, restricted stock or other benefit plan or arrangement or (iv) increase compensation, bonus or other benefits payable to any employee of the applicable Company Employee Plan or under Applicable Lawany of its Subsidiaries, enter intoexcept, adopt, amend (including by accelerating the vesting, payment or funding of with respect to any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, officer or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
(i) sell, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregate, except in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice;
(j) agree to any exclusivity, non-competition or similar provision or covenant limiting the ability employee of the Company or any of its Subsidiaries to compete or engage in any line of businesswhose annual compensation does not exceed $150,000, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made for increases in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement practice and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except taking into consideration compensation arrangements for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases cash bonuses in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing place as of the date hereof;
(n) change the Company's methods of accounting, except as required by concurrent changes in GAAP or in Regulation S-X of the Exchange Act, as agreed to by its independent public accountants;
(o) settle, or offer or propose to settle, (i) any litigation, investigation, arbitration, proceeding or other claim involving or against the Company or any of its Subsidiaries, (ii) any stockholder litigation or dispute against the Company or any of its officers or directors or (iii) assumeany litigation, guarantee arbitration, proceeding or endorse dispute that relates to the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit AgreementTransactions;
(mp) make, make or change or revoke any material Tax election, change any annual Tax tax accounting period, file adopt or change any material amended method of tax accounting, materially amend any Tax Return Returns or file any claims for material Tax Return in a manner inconsistent with past practicerefunds, enter into any “material closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceedingclaim, audit or assessment, or surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of except for the limitations period applicable to any material Tax claim or assessment outside method for applying the ordinary course of business;
Uniform Capitalization Rules (n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;
(o) institute, settle or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of businessSection 263A);
(q) fail to maintain take any action that would make any representation or warranty of the Company hereunder inaccurate in all any material respects respect at, or as of any Insurance Policiestime before, the Effective Time;
(r) other than in the ordinary course of business withdraw or as contemplated by this Agreement (i) amend, modify, renew or terminatepermit the withdrawal or modification of, the Compensation Arrangement Approvals; or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an Affiliate of the Company;
(s) voluntarily terminateagree, amend resolve or fail commit to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Act; or
(u) authorize, commit or agree to take do any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentenceforegoing.
Appears in 2 contracts
Samples: Merger Agreement (Universal Hospital Services Inc), Merger Agreement (Emergent Group Inc/Ny)
Conduct of the Company. The Company covenants and agrees that, except for matters (i) expressly permitted or expressly contemplated by this Agreement, (ii) Except as set forth on Part in Section 6.01 of the Company Disclosure Schedule, except as otherwise expressly contemplated by this Agreement or to the extent that Parent shall otherwise consent in writing (iii) reasonably undertaken such consent, except in connection with any COVID-19 Measuresthe case of Sections 6.01(a), (ivb), (c), (j) undertaken with the prior written consent of Parent or (which shall l), not to be unreasonably withheld, conditioned or delayed), (v) required by Applicable Law or the rules and regulations of Nasdaq, from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereofTime, the Company (A) shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) to, conduct its business in the ordinary course consistent in all material respects, substantially consistent respects with past practicepractice and use its reasonable best efforts to (i) preserve substantially intact its present business organization, (2ii) to the extent consistent with the foregoing clause maintain in effect all of its material foreign, federal, state and local licenses, permits, consents, franchises, approvals and authorizations, (1), maintain its business as a going concern and (3iii) keep available the services of its current directors, officers and key employees and to (iv) preserve the goodwill of and maintain satisfactory its relationships with those Persons its customers, lenders, suppliers and others having material business relationships with it. Without limiting the generality of the foregoing, except as expressly contemplated by this Agreement or set forth in Section 6.01 of the Company and its SubsidiariesDisclosure Schedule, and (B) the Company shall not, and nor shall cause each it permit any of its Subsidiaries to, without the prior written consent of Parent (such consent, except in the case of Sections 6.01(a), (b), (c), (j) or (l), not to:to be unreasonably withheld, conditioned or delayed):
(a) amend the Company’s certificate its articles of incorporation or bylawsincorporation, or amend any certificate of incorporation or bylaws, bylaws or other comparable charter similar organizational documents (whether by merger, consolidation or organizational documents, of the Company’s Subsidiariesotherwise);
(b) other than with respect to a direct or indirect wholly owned Subsidiary of the Company, (i) establish a record date forsplit, combine or reclassify any shares of its capital stock, (ii) declare, set aside or pay any dividends on, dividend or make any other distributions distribution (whether in cash, stock, stock or property or otherwiseany combination thereof) in respect ofof its capital stock, except for (A) dividends by any of its wholly-owned Subsidiaries and (B) regular quarterly cash dividends by the Company with customary record and payment dates on the shares of Company Stock not in excess of $0.09 per share per quarter or (iii) redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or enter into otherwise acquire any agreement Company Securities or any Company Subsidiary Securities, except in connection with withholdings to satisfy tax obligations with respect to Company Restricted Stock, Company RSUs, Company SARs or Company Stock Options, the voting forfeiture of equity awards that were granted under Equity Plans and are outstanding on the date of this Agreement or pursuant to the Company’s right to acquire Company Securities held by a Company employee upon termination of such employee’s employment, in each case, in the ordinary course consistent with past practice;
(c) (i) issue, deliver or sell, or authorize the issuance, delivery or sale of, any capital stock shares of any Company Securities or Company Subsidiary Securities, other than the issuance of (A) any shares of the Company Stock upon the exercise of Company Stock Options or Company SARs or the settlement of Company RSUs that, in each case, are outstanding on the date of this Agreement in accordance with their terms on the date of this Agreement, (B) any Company Subsidiary Securities to the Company or any other Subsidiary of its Subsidiaries the Company and (C) any equity securities issued to newly hired employees and in connection with employee promotions, in each case, in the ordinary course of business and in the amounts and on the terms set forth on Section 6.01(c) of the Company Disclosure Schedule or securities convertible or exchangeable therefor), (ii) splitamend any term of any Company Security or any Company Subsidiary Security (in each case, reverse splitwhether by merger, combineconsolidation or otherwise);
(d) incur any capital expenditures or any obligations or liabilities in respect thereof, subdivide except for (i) those contemplated by the capital expenditure budget that has been made available to Parent prior to the date of this Agreement and (ii) any unbudgeted capital expenditures not to exceed $50,000 individually or reclassify $150,000 in the aggregate;
(e) acquire (by merger, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, any assets, securities, properties, interests or businesses, other than in the ordinary course of business consistent with past practice;
(f) sell, lease or otherwise transfer, or create or incur any Lien on, any of the Company’s or its Subsidiaries’ assets, securities, properties, interests or businesses, other than in the ordinary course of business consistent with past practice;
(g) other than in connection with actions permitted by Section 6.01(d) or Section 6.01(e), make any loans, advances or capital contributions to, or investments in, any other Person, other than in the ordinary course of business or contributions to Subsidiaries that are directly or indirectly wholly-owned by the Company, in each case, consistent with past practice;
(h) create, incur, assume, suffer to exist or otherwise be liable with respect to any indebtedness for borrowed money or guarantees thereof having an aggregate principal amount (together with all other indebtedness for borrowed money of the Company and its Subsidiaries) outstanding at any time greater than $1,000,000;
(i) enter into any contract, agreement, arrangement or understanding that would constitute a Material Contract if it had been entered into as of the date hereof, other than any agreement for the sale of services by the Company or any Subsidiary entered into in the ordinary course of business consistent with past practice, or (ii) amend the terms of or modify in any capital stock (material respect or securities convertible terminate any Material Contract or exchangeable therefor) otherwise waive, release or assign any material rights, claims or benefits of the Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c)other than an amendment, issue modification, waiver, release or authorize assignment with respect to an agreement for the issuance sale of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of services by the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), or (iv) purchase, redeem or otherwise acquire or offer to purchase, redeem or acquire any Company Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPP;
(c) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company Securities, other than (i) the issuance of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement or (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company;
(d) merge, consolidate or, other than entered into in the ordinary course of business substantially consistent with past practice, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries;
(e) (i) increase the salary, wages, benefits, bonuses or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
(i) sell, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregate, except in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice;
(j) agree except as required to comply with Applicable Law or any Material Contract or Employee Plan in accordance with its terms on the date of this Agreement, (i) grant or increase any severance or termination pay to (or amend any existing severance pay or termination arrangement), (ii) enter into any employment, deferred compensation or other similar agreement (or amend any such existing agreement), other than with a new hire in the ordinary course of business consistent with past practice, (iii) increase benefits payable under any existing severance or termination pay policies, (iv) establish, adopt or amend any collective bargaining, bonus, profit-sharing, thrift, pension, retirement, deferred compensation, stock option, restricted stock or other benefit plan or arrangement, (v) increase compensation, bonus or other benefits payable to any exclusivity, non-competition or similar provision or covenant limiting the ability employee of the Company or any of its Subsidiaries to compete or engage in any line of businessSubsidiaries, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are except for increases made in the ordinary course of business substantially consistent with past practicepractice to employees in connection with regularly scheduled promotions and salary increases, (yvi) are on terms substantially similar accelerate the payment of any bonus or other amounts (relative to any such restrictions existing on the timing contemplated as of the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any Agreement), including bonuses earned in respect of the accounting methods used by Company’s performance year ended September 30, 2010 (the Company materially affecting its assetspayment of which is scheduled to occur between October 1, liabilities or business2010 and October 31, except for such changes that are required by (i) GAAP (or any interpretation thereof2010), (iivii) by accelerate the vesting, exercisability or lapse of forfeiture restrictions, as applicable, with respect to any Applicable LawCompany Stock Option, including Regulation S-X under the Securities ActCompany SAR, Company RSU or Company Restricted Stock, (viii) subject to Section 7.04(a), establish or enter into any plan or arrangement that provides for an opportunity to earn a cash bonus with respect to any performance period commencing on or after October 1, 2010 or (iiiix) by hire any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases employee other than practice employees in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of consistent with the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness ’s hiring plans in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing effect as of the date hereof.
(k) change the Company’s methods of accounting, except as required by concurrent changes in GAAP or in Regulation S-X of the 1934 Act, as agreed to by its independent public accountants;
(l) settle, or offer or propose to settle, (i) any material litigation, investigation, arbitration, proceeding or other claim involving or against the Company or any of its Subsidiaries, (ii) any stockholder litigation or dispute against the Company or any of its officers or directors or (iii) assumeany litigation, guarantee arbitration, proceeding or endorse dispute that relates to the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreementtransactions contemplated hereby;
(m) make, make or change or revoke any material Tax election, change any annual Tax tax accounting period, file adopt or change any material amended method of tax accounting, materially amend any Tax Return Returns or file any claims for material Tax Return in a manner inconsistent with past practicerefunds, enter into any “material closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceedingclaim, audit or assessment, or surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;; or
(n) make any commitment with respect agree, resolve or commit to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;
(o) institute, settle or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than in the ordinary course of business or as contemplated by this Agreement (i) amend, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an Affiliate of the Company;
(s) voluntarily terminate, amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Act; or
(u) authorize, commit or agree to take do any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentenceforegoing.
Appears in 2 contracts
Samples: Merger Agreement (Diamond Management & Technology Consultants, Inc.), Merger Agreement (PricewaterhouseCoopers LLP)
Conduct of the Company. The From the date hereof until the Effective Time, the Company covenants and agrees thatits Subsidiaries shall conduct their business in the ordinary course consistent with past practice and shall use their reasonable best efforts to preserve intact their business organizations and relationships with third parties and to keep available the services of their present officers and employees. From the date hereof until the Effective Time, the Company will use reasonable best efforts to not, and to not permit any of its Subsidiaries to, take any action that would make any representation and warranty of the Company hereunder inaccurate in any respect at, or as of any time prior to, the Effective Time. Without limiting the generality of the foregoing, and except for matters (i) expressly permitted or expressly contemplated by this Agreement, (ii) as set forth on Part 6.01 of the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken with the prior written consent of Parent (which shall not be unreasonably withheld, conditioned or delayed), (v) required by Applicable Law or the rules and regulations of NasdaqSchedule 6.01, from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereofTime, the Company (A) shall, shall not and shall cause each not permit any of its Subsidiaries to use commercially reasonable efforts to (1) conduct its business in the ordinary course in all material respects, substantially consistent with past practice, (2) to the extent consistent with the foregoing clause (1), maintain its business as a going concern and (3) keep available the services of its current officers and key employees and to preserve the goodwill of and maintain satisfactory relationships with those Persons having material business relationships with the Company and its Subsidiaries, and (B) shall not, and shall cause each of its Subsidiaries not to:
(a) amend the Company’s adopt or propose any change to its certificate of incorporation or bylaws, or amend any certificate of incorporation or bylaws, or other comparable charter or organizational documents, of the Company’s Subsidiaries;
(b) other than with respect to a direct acquire any material amount of stock or indirect wholly owned Subsidiary of the Company, (i) establish a record date for, declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock, property or otherwise) in respect of, or enter into any agreement with respect to the voting of, any capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), (ii) split, reverse split, combine, subdivide or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) of the Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c), issue or authorize the issuance assets of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), or (iv) purchase, redeem or otherwise acquire or offer to purchase, redeem or acquire any Company Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPP;
(c) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company Securities, other than (i) the issuance of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement or (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company;
(d) merge, consolidate or, other than in the ordinary course of business substantially consistent with past practice, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries;
(e) (i) increase the salary, wages, benefits, bonuses or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise;
(c) thatsell, individually involve a purchase price lease, license or principal otherwise dispose of any material Subsidiary or any material amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment securities or similar assets property except (i) pursuant to existing contracts or commitments and (ii) in the ordinary course of business and in amounts substantially consistent with past practice;
(id) (x) issue, sell, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse pledge or otherwise dispose of any assets, propertiesshares of capital stock of any class or series of the Company or its Subsidiaries, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire any such shares, (other than (i) issuances pursuant to stock options or stock-based awards granted pursuant to a Company Intellectual PropertyEmployee Plan and outstanding on the date hereof or granted pursuant to clause (ii) below, in each case having a value in excess of $500,000 individually (ii) additional stock options or $5,000,000 in the aggregate, except stock-based awards granted in the ordinary course consistent with past practices pursuant to any Company Employee Plan as in effect on the date hereof, or (iii) issuances by any Subsidiary of the Company to the Company or to any wholly owned Subsidiary of the Company’s ) or its Subsidiaries’ business substantially consistent with past practice(y) reduce the exercise or conversion price, extend the term or otherwise modify in any material respect the terms of any such securities of the Company or of any Subsidiary of the Company;
(je) agree (i) declare, pay or set aside for payment any dividends on or make other distributions in respect of any of its capital stock (except for dividends by a wholly owned subsidiary of the Company to its parent), (ii) split, combine, subdivide or reclassify any exclusivityof its capital stock, non-competition (iii) repurchase, redeem or similar provision or covenant limiting the ability otherwise acquire any shares of capital stock of the Company or any of its Subsidiaries or any other securities thereof or any rights, warrants or options to compete or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have acquire any such effect on Parent shares or other securities or (iv) amend any material term of any outstanding security of the Company or any of its Affiliates after the Effective TimeSubsidiaries;
(f) (i) incur, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners assume or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made guarantee any indebtedness for borrowed money other than for working capital borrowings incurred in the ordinary course of business substantially consistent with past practicepractices, (yii) are create any Lien on terms substantially similar to any such restrictions existing on material asset of the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent Company or any of its Affiliates (Subsidiaries other than in the ordinary course of business consistent with past practices, or (ii) make any material loans, advances or capital contributions to, or investments in, any other Person, other than to the Company or any wholly owned Subsidiary of the Company;
(g) enter into any transaction, commitment, contract or agreement relating to the assets or business of the Company or any of its Subsidiaries (including the acquisition or disposition of any assets), or to relinquish any contract or other right, in each case material to the Company and its Subsidiaries) after , taken as a whole, other than transactions, commitments, contracts and agreements in the Effective Timeordinary course of business consistent with past practices and those contemplated by this Agreement;
(kh) adopt make any change in any method of accounting or change any of the accounting methods used by the Company materially affecting its assets, liabilities principles or businesspractices, except for any such changes that are change required by (i) reason of a concurrent change in GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities 1934 Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(li) except for borrowings (i) grant any severance or termination pay to (or amend any existing arrangement with) any director, officer or key employee of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and or any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregateSubsidiaries, (ii) modify in a manner materially adverse to increase benefits payable under any existing severance or termination pay policies or employment agreements covering any director, officer or key employee of the Company or any of its Subsidiaries the terms of any material Indebtedness existing as of the date hereofSubsidiaries, (iii) assumeenter into any employment, guarantee deferred compensation or endorse the obligations of other similar agreement (or any Person (other than a wholly-owned Subsidiary amendment to any such existing agreement) with any director, officer or key employee of the Company)Company or any of its Subsidiaries, (iv) make establish, adopt or amend (except as required by applicable law) any loancollective bargaining, advance bonus, profit-sharing, thrift, pension, retirement, deferred compensation, compensation, stock option, restricted stock or capital contribution to other benefit plan or arrangement covering any Person in excess director, officer or key employee of $500,000 in the aggregate, other than capital contributions and loans to Company or any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, its Subsidiaries or (v) amendincrease compensation, modify bonus or waive other benefits payable to any provision director, officer or key employee of the Existing Credit Agreement (other than to waive Company or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreementits Subsidiaries;
(mj) make, make or change or revoke any material Tax election, change any annual Tax tax accounting period, file adopt or change any method of tax accounting if the adoption or change of such method would have an adverse effect on the Tax liability of the Company (or, following the Effective Time, on Parent), make any material amended amendment to Tax Return Returns or file any claims for material Tax Return in a manner inconsistent with past practicerefunds, enter into any “material closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any income Tax audit or assessment or any material Tax Proceedingother audit or assessment, or surrender any right to claim a any material Tax refund, offset or other reduction in Tax liability;
(k) establish, adopt or amend (except as required by applicable law) any stock option or restricted stock award or other benefit plan or arrangement providing for the grant of equity-based awards to permit or provide for the acceleration of the vesting, exercise, payment or settlement of such awards, or consent to any extension or waiver provide for the adjustment (except as provided herein) of the limitations period applicable terms of such awards, in any such case upon the occurrence of the transaction contemplated by this agreement or upon any other event;
(l) take any action that would result in any of the conditions to the Mergers not being satisfied;
(m) enter into, or amend any material Tax claim term of, any commitment, contract or assessment outside agreement with any financial and legal advisor with respect to the ordinary course of business;transactions contemplated hereby; or
(n) make any commitment with respect agree or commit to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;
(o) institute, settle or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than in the ordinary course of business or as contemplated by this Agreement (i) amend, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an Affiliate of the Company;
(s) voluntarily terminate, amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Act; or
(u) authorize, commit or agree to take do any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentenceforegoing.
Appears in 2 contracts
Samples: Merger Agreement (Charles River Laboratories International Inc), Merger Agreement (Inveresk Research Group Inc)
Conduct of the Company. The Company covenants and agrees that, except for matters (i) expressly permitted From the date hereof until the Effective Time or expressly contemplated by the earlier termination of this Agreement, (ii) set forth on Part 6.01 the Company and its Subsidiaries shall conduct their business in the ordinary course consistent with past practice and shall use their reasonable best efforts to preserve intact their business organizations and relationships with third parties and to keep available the services of their present officers and employees. Without limiting the generality of the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken with the prior written consent of Parent (which shall not be unreasonably withheld, conditioned or delayed), (v) required by Applicable Law or the rules and regulations of Nasdaqforegoing, from the date hereof until the earlier of the Effective Time and or the earlier termination of this Agreement in accordance with Article 8 hereofAgreement, except as expressly permitted by this Agreement, the Company (A) shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) conduct its business in the ordinary course in all material respects, substantially consistent with past practice, (2) to the extent consistent with the foregoing clause (1), maintain its business as a going concern and (3) keep available the services of its current officers and key employees and to preserve the goodwill of and maintain satisfactory relationships with those Persons having material business relationships with the Company and its Subsidiaries, and (B) shall not, and shall cause each not permit any of its Subsidiaries not to:
(a) amend the Company’s certificate enter into any contract, agreement, lease, license, note, bond, mortgage, indenture, guarantee, other evidence of incorporation or bylaws, or amend any certificate of incorporation or bylaws, indebtedness or other comparable charter instrument, obligation or organizational documents, commitment of the Company’s Subsidiariestype referred to in Section 4.14(a), Section 4.18(j) or Section 4.18(l);
(b) other than with respect adopt or propose to a direct or indirect wholly owned Subsidiary of adopt any change to the Company, (i) establish a record date for, declare, set aside ’s articles of organization or pay any dividends on, or make any other distributions (whether in cash, stock, property or otherwise) in respect of, or enter into any agreement with respect to the voting of, any capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), (ii) split, reverse split, combine, subdivide or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) of the Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c), issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), or (iv) purchase, redeem or otherwise acquire or offer to purchase, redeem or acquire any Company Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPPbylaws;
(c) issuereclassify, deliverrecapitalize, sellsplit, grantcombine, announce, pledge, transfer, subject to exchange or readjust any Lien, otherwise encumber or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company Securities, other than (i) the issuance of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement or (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary capital stock of the Company;
(d) mergedeclare, consolidate orset aside or pay any dividend or other distribution with respect to any shares of capital stock of the Company, or repurchase, redeem or otherwise acquire any outstanding shares of capital stock or other than in the ordinary course of business substantially consistent with past practice, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement securities of, or resolutions providing for or authorizingother ownership interests in, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries;
(e) issue, sell, transfer, pledge, redeem, accelerate rights under, dispose of or encumber, or authorize the issuance, sale, transfer, pledge, redemption, acceleration of rights under, disposition 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 its capital stock, or any other ownership interest in the Company or any of its Subsidiaries, except in each case (i) increase for the salary, wages, benefits, bonuses or other cash compensation payable or to become payable to issuance of shares of Company Common Stock upon the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to exercise of the terms of existing employment or other compensation agreements or arrangements in effect Company Stock Options outstanding as of the date hereofof this Agreement in accordance with their terms, (Bii) required for the issuance of shares of Company Common Stock or rights to purchase Company Common Stock under any the Company Employee Plan pursuant ESPP and (iii) the grant of Company Stock Options to the terms in effect as employees and directors of the date hereof Company or Collective Bargaining Agreement or under Applicable Law, (C) made its Subsidiaries in the ordinary course of business and substantially consistent with past practicepractice in an amount not to exceed (x) an aggregate of 30,000 shares of Company Common Stock prior to June 1, or 2006, and (Dy) an aggregate of 55,000 shares of Company Common Stock thereafter (inclusive of the 30,000 shares of Company Common Stock referred to in connection with changes to benefits as part of annual enrollmentclause (x)); provided that (A) such changes made as part Company Stock Options shall have an exercise price per share not less than the fair market value of annual enrollment are made in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect Common Stock on the date hereofof grant and (B) such Company Stock Options shall not be subject to accelerated vesting under any agreement or plan as a result of the consummation of the transactions contemplated by this Agreement or as a result of termination of employment;
(f) hire, engage amend any material term of any outstanding security of the Company or terminate the employment or engagement any of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000its Subsidiaries;
(g) negotiate(i) grant any severance or termination pay to (or amend any existing arrangement with) any director, enter intoexecutive officer or employee of the Company or any of its Subsidiaries, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets except in the ordinary course of business consistent with past practice in connection with actual termination of any such individual in accordance with plans or policies listed on Schedule 4.22 or as otherwise disclosed on Schedule 4.22, (ii) increase the benefits payable under any existing severance or termination pay policies or employment agreements, (iii) enter into any employment, deferred compensation or other similar agreement (or any amendment to any such existing agreement) with any director, executive officer or employee of the Company or any of its Subsidiaries (other than at-will offer letters with no severance or change of control provisions), (iv) establish, adopt or amend (except as required by Applicable Law) any collective bargaining, bonus, profit-sharing, thrift, pension, retirement, deferred compensation, compensation, stock option, restricted stock or other benefit plan or arrangement covering any director, executive officer or employee of the Company or any of its Subsidiaries, (v) increase the compensation, bonus or other benefits payable to any director or executive officer of the Company or any of its Subsidiaries except for annual bonuses of up to $1,000,000 in the aggregate payable to executive officers of the Company or (vi) increase the compensation, bonus or other benefits payable to employees of the Company or any of its Subsidiaries that in an aggregate amount for all such employees that if annualized would exceed $2,000,000 (including, for this purpose, the annual bonus payments described in clause (v)), except that, if the Closing has not occurred by June 1, 2006, the Company may increase the compensation and other benefits (and otherwise grant ordinary course raises) to non-executive employees in amounts substantially the ordinary course consistent with past practice;
(h) enter into any plan or agreement of merger or consolidation involving the Company or any of its Subsidiaries, or involving any acquisition by the Company or any of its Subsidiaries of a material amount of stock or assets of any other Person;
(i) sell or otherwise dispose of any material subsidiary or sell, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse license or otherwise dispose of any assets, properties, securities or Company Intellectual Property, property in each case having material to the Company and its Subsidiaries, on a value in excess of $500,000 individually or $5,000,000 in the aggregateconsolidated basis, except (i) pursuant to existing contracts or commitments and (ii) in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice;
(j) agree to incur, assume or guarantee any exclusivity, non-competition material indebtedness for borrowed money;
(k) create or similar provision or covenant limiting the ability otherwise incur any Lien on any asset of the Company or any of its Subsidiaries to compete or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 1,000,000 to or investment in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit AgreementPerson;
(m) make, change or revoke any material Tax election, change any annual Tax method of accounting period, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 of the Code (accounting principles or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of practice by the Company Disclosure Schedule;
(o) institute, settle or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle Subsidiaries, except for any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out such change required by reason of a breach concurrent change in GAAP or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than in Regulation S-X under the ordinary course of business or as contemplated by this Agreement (i) amend, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an Affiliate of the Company;
(s) voluntarily terminate, amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN 1934 Act; or
(un) authorize, agree or commit or agree to take do any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentenceforegoing.
Appears in 2 contracts
Samples: Merger Agreement (Kla Tencor Corp), Merger Agreement (Ade Corp)
Conduct of the Company. The Company covenants (a) During the period commencing on the date of this Agreement and agrees thatending on the earlier of the valid termination of this Agreement in accordance with Section 8.1 and the Effective Time (the “Pre-Closing Period”), except for matters (i) expressly permitted or expressly contemplated by this Agreement, (iiw) set forth on Part 6.01 in this Section 6.1 of the Company Disclosure ScheduleLetter, (iiix) reasonably undertaken in connection with any COVID-19 Measuresrequired by Applicable Law, (ivy) expressly required or permitted by this Agreement or (z) undertaken with the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed), (v) required by Applicable Law or the rules and regulations of Nasdaq, from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereof, the Company (A) shall, and shall cause each of its the Company Subsidiaries to use commercially reasonable efforts to (1i) conduct its business in the ordinary course in all material respects, substantially of business consistent with past practice, (2ii) use reasonable best efforts to the extent consistent with the foregoing clause (1), maintain preserve intact its business as a going concern organization, operations, assets, goodwill and (3) keep available the services of its current officers and key relationships with material customers, suppliers, subcontractors, officers, employees and to preserve the goodwill of and maintain satisfactory relationships with those Persons other third parties having material business relationships dealings with the Company and its Subsidiaries, Subsidiaries and (Biii) operate its business in accordance with Applicable Laws.
(b) Without limiting the generality of the foregoing in Section 6.1(a) and except for matters (w) set forth in this Section 6.1 of the Company Disclosure Letter, (x) required by Applicable Law, (y) expressly required or permitted by this Agreement or (z) undertaken with the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed), the Company shall not, and nor shall cause each it permit any of its the Company Subsidiaries not to:
(ai) amend the Company’s certificate Organizational Documents of incorporation the Company or bylawsthe Organizational Documents of any of the Company Subsidiaries (whether by merger, consolidation or otherwise);
(ii) issue, sell, grant, pledge, transfer, lease, dispose of, grant any Lien or otherwise enter into any Contract or other agreement with respect to the Company Securities or any other capital stock or other equity securities of the Company or any capital stock of or other equity securities of the Company Subsidiaries, or amend grant any certificate options, warrants or other rights to acquire any such capital stock or other interest in or any instrument convertible into or exchangeable or exercisable for any such capital stock or other interest, other than the issuance of incorporation or bylawsshares of Company Common Stock pursuant to the terms of the Company Restricted Stock Units outstanding as of the date of this Agreement pursuant to existing Company Stock Plans in accordance with the applicable Company Stock Plan’s and Company Equity Award’s terms as in effect on the date of this Agreement;
(iii) except in connection with actions permitted by Section 6.2 hereof, take any action to exempt any Person from, or other comparable charter or organizational documents, make any acquisition of securities of the Company’s Company by any Person not subject to, any state takeover statute or similar statute or regulation that applies to Company with respect to an Acquisition Proposal or otherwise, including the restrictions on “business combinations” set forth in Section 203 of the DGCL, except for Parent, Merger Sub, or any of their respective Subsidiaries or Affiliates, or the Transactions;
(iv) adopt any plan of merger, consolidation, reorganization, recapitalization, restructuring, complete or partial liquidation or dissolution of the Company or any of the Company Subsidiaries, file a petition in bankruptcy under any provisions of federal or state bankruptcy Applicable Law on behalf of the Company or any of the Company Subsidiaries or consent to the filing of any bankruptcy petition against the Company or any of the Company Subsidiaries under any similar Applicable Law;
(v) create any Subsidiary of the Company or any of the Company Subsidiaries;
(bvi) other than with respect to a direct or indirect wholly owned Subsidiary of the Company, (iA) establish a record date for, declare, accrue, set aside or pay any dividends on, dividend or make any other distributions distribution on or in respect of (whether in cash, stock, property or otherwise) in respect of, the Company’s or enter into any agreement with respect of the Company Subsidiaries’ capital stock or other securities (other than dividends to the voting ofCompany or from one of the wholly owned Company Subsidiaries) or (B) redeem, repurchase or otherwise reacquire (or offer to redeem, repurchase or otherwise reacquire), split, combine or reclassify any Company Securities or capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor)the Company Subsidiaries, (ii) split, reverse split, combine, subdivide or reclassify or otherwise amend change the terms of any capital stock (or securities convertible or exchangeable therefor) structure of the Company or any of its the Company Subsidiaries, other than (iii1) except any repurchases pursuant to the Company’s or any of the Company Subsidiaries’ right (under written commitments in effect as expressly provided in Section 6.01(c), issue of the date hereof) to purchase Company Securities or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its the Company Subsidiaries (held by an officer or securities convertible or exchangeable therefor)other employee, or (iv) purchaseindividual who is an independent contractor, redeem consultant or otherwise acquire director, of or offer to purchasethe Company or any of the Company Subsidiaries, redeem but only upon termination of such Person’s employment or acquire any Company Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock engagement by the Company, (2) for purposes of effecting a net share withholding in each case, connection with the vesting of any Company Restricted Stock Units in satisfaction by holders of any required tax withholdings or (3) between the Company Equity Awards of the applicable withholding taxes and a wholly owned Company Subsidiary or in accordance with the terms of the ESPPbetween wholly owned Company Subsidiaries;
(cvii) issueexcept as required by GAAP or Applicable Law, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company Securities, other than (i) the issuance revalue in any material respect any of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereofits properties or assets, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement including writing-off notes or (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company;
(d) merge, consolidate oraccounts receivable, other than in the ordinary course of business substantially consistent with past practicepractice or (ii) make any change in financial accounting methods, principles, policies or practices or procedures;
(viii) (A) accelerate, terminate or consent to the termination of, cancel, amend in any material respect, grant a waiver of any material right under or otherwise modify in any material respect any Specified Contract or any Contract that would constitute a Specified Contract if in effect as of the date of this Agreement; or (B) enter into strategic alliance any Contract that would constitute a Specified Contract if in effect as of the date of this Agreement;
(ix) make any capital expenditures or similar legal partnership with capital expenditure commitments in excess of $1,500,000 in the aggregate;
(x) repurchase, prepay, incur, assume or guarantee any Indebtedness to any Person, file a voluntary petition for bankruptcy issue or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization sell any debt securities of the Company or any of the Company Subsidiaries or guarantee any debt securities of any other Person or enter into any arrangement having the economic effect of any of the foregoing other than (A) any such transactions between the Company and one of its Subsidiarieswholly owned Subsidiaries or (B) borrowings incurred in the ordinary course of business (including any borrowings in respect of letters of credit) that do not, at any time, exceed $250,000, in the aggregate;
(exi) grant or suffer to exist any Liens on any properties or assets of the Company or any of the Company Subsidiaries that are material to any Acquired Company, taken as a whole, other than Permitted Liens;
(ixii) increase make any capital investment in or loan or advance to, or forgive any loan to, any other Person except for (A) loans, capital contributions, advances or investments between the salary, wages, benefits, bonuses Company and any wholly owned Company Subsidiary or between wholly owned Company Subsidiaries and (B) advances to employees and consultants for travel and other cash compensation payable or to become payable to business-related expenses in the ordinary course of business consistent with past practices and in compliance with the Company’s employees, officers, directors or Independent Contractors, except for increases policies related thereto;
(Axiii) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made than in the ordinary course of business and substantially consistent other than with past practicerespect to Intellectual Property rights of the Acquired Companies (which shall be the subject to and governed by Section 6.1(b)(xix)), sell, lease, sublease, license, sublicense, abandon, waive, relinquish, transfer, pledge, abandon, assign, swap, mortgage, hypothecate or otherwise dispose of any of the assets, properties or rights of the Company or any of the Company Subsidiaries that are material to the Acquired Companies, taken as a whole;
(xiv) purchase or acquire, directly or indirectly (including by merger, consolidation, or acquisition of stock or assets or any other business combination), (DA) any corporation, partnership, other business organization or division thereof or any other business or all or substantially all of the assets of any Person (other than reorganizations solely among wholly owned Subsidiaries of the Company) or (B) any assets, real property, securities, properties, interests or businesses from any Person (except for a wholly owned Company Subsidiary) having a value in connection with changes to benefits as part excess of annual enrollment; provided that such changes made as part $250,000, in each case, other than acquisitions of annual enrollment are made raw materials, supplies, equipment, inventory and third-party software in the ordinary course of business;
(xv) enter into a new line of business or abandon or discontinue any existing line of business;
(xvi) settle, pay, discharge or satisfy any Proceeding (or agree to do any of the foregoing), other than any settlement, payment, discharge or satisfaction that (A) does not relate to any Transaction Litigation (with respect to which any settlements, releases, waivers or compromises shall be subject to Section 6.10) or (B) (1) either (x) results solely in a monetary obligation involving only the payment of monies by the Company and/or the Company Subsidiaries of not more than $250,000, individually or in the aggregate for all such Proceedings (excluding any settlements made under the following clause (y)), or (y) results solely in a monetary obligation that is funded by an indemnity obligation to, or an insurance policy of, any Acquired Company and the payment of monies by the Acquired Companies that are not more than $250,000, individually or in the aggregate (not funded by an indemnity obligation or through insurance policies) and (ii2) does not involve any admission of guilt or impose any material restrictions or limitations upon the operations or business of or other than conduct remedy or injunctive relief applicable to the Company or any of the Company Subsidiaries, whether before, on or after the Effective Time;
(xvii) except as required by Applicable Law, expressly required or permitted by this Agreement or required by the terms of the applicable any Company Employee Plan as in effect as of the date of this Agreement, (A) increase the compensation or under Applicable Lawbenefits payable by the Company or any of the Company Subsidiaries to directors, officers, employees, consultants or independent contractors, other than increases with respect to Company Employees who are not directors or executive officers, in the ordinary course of business in connection with the Company’s or any Company Subsidiary’s annual merit-based compensation review process or job promotions and that do not exceed 3% individually or in the aggregate, (B) establish, adopt, enter into, adoptamend, amend (including by accelerating the vestingterminate, payment or funding of take any benefits under), modify or terminate action to accelerate rights under any Company Employee Plan Plans or any plan, agreement, arrangementprogram, policy, trust, fund or policy other arrangement that would be a Company Employee Plan if it were in effect on existence as of the date hereof;
of this Agreement, other than amendments required by Applicable Law, (fC) hiregrant any rights to severance or termination pay to any current or former officer, engage employee, director, independent contractor or consultant, (D) grant or amend any equity or equity-based awards except as required by existing Company Stock Plans, or (E) hire or terminate the employment or engagement of (other than for cause, as determined by the Company) any officer, employee, officerindependent contractor or consultant, director, or Independent Contractor whose other than individuals with an annual base cash compensation exceeds salary less than $250,000150,000;
(gxviii) negotiatebecome a party to, enter intoestablish, amend adopt, amend, commence participation in or extend terminate any Collective Bargaining Agreementcollective bargaining agreement or other agreement with a labor union, works council or similar organization;
(hxix) acquire or commit sell, license, sublicense, allow to acquire lapse, abandon, assign, transfer, create any business, assets, real property or capital stock ofLien on (other than Permitted Liens), or make otherwise grant any loans, advances rights under any material Company Owned IP or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregateExclusively Licensed IP, other than one or more acquisitions the grant of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets nonexclusive licenses in the ordinary course of business and in amounts substantially consistent with past practice, or make any material adverse change to any privacy policy published by the Company or any Company Subsidiaries, except as required by Applicable Law;
(ixx) sellmake, assignrescind or change any material Tax election, leasesettle or compromise any claim relating to a material amount of Taxes, licensesurrender any right to claim a refund of a material amount of Taxes, pledgewaive or extend the statute of limitations in respect of a material amount of Taxes, transferenter into any closing agreement or request any ruling with respect to a material amount of Taxes, abandon, subject amend any Tax Return relating to a material amount of Taxes or make any Lien, permit to lapse or otherwise dispose of material change in any assets, properties, or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregate, except in the ordinary course of the Company’s methods, principles or its Subsidiaries’ business substantially consistent with past practicepractices used by it for Tax accounting except as required by Applicable Law;
(jxxi) agree enter into any material transaction or Contract with any Affiliate, holder of five percent (5%) or more of the Shares, director or executive officer of the Company or any of the Company Subsidiaries or enter into any other material transaction or Contract with any other Person that would be required to be reported by the Company pursuant to Item 404 of Regulation S-K under the Exchange Act;
(xxii) engage in any exclusivity, non-competition “plant closing” or “mass layoff” which would trigger the notice requirements pursuant to the WARN Act;
(xxiii) enter into or adopt any “poison pill” or similar provision stockholder rights plan;
(xxiv) enter into any Contract or covenant limiting commitment which materially restrains, restricts, limits or impedes the ability of the Company or any of its Subsidiaries Affiliates to compete with or engage in conduct any line of business, with any Person or its respective businesses in any geographic area; or
(xxv) fail to maintain in full force and effect, materially modify or pursuant to which any benefit renew the existing insurance policies (or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection alternative policies with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of comparable terms and conditions) covering the Company and its Subsidiaries or similar arrangementsand their respective properties, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement assets and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Timebusinesses;
(kxxvi) adopt authorize any of, or change agree or commit to take, any of the accounting methods used by actions described in the Company materially affecting its assets, liabilities or business, except for such changes that are required by foregoing clauses (i) GAAP through (or any interpretation thereofxxv) of this Section 6.1(b), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);.
(lc) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse Notwithstanding anything to the Company or its Subsidiaries contrary in this Section 6.1, the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person parties hereto acknowledge and agree that nothing contained in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;
(o) institute, settle or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by shall give Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than in the ordinary course of business or as contemplated by this Agreement (i) amend, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an Affiliate of the Company;
(s) voluntarily terminate, amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Act; or
(u) authorize, commit or agree to take any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise the right to control or direct the Company’s operations (including for purposes of the HSR Act) prior to the Offer Acceptance Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions hereof, complete control and supervision over its operations.
(d) At or prior to Closing, if any form examination of control over the title records with respect to the Owned Real Property performed by Parent reveals any inaccuracy in the representation set forth in the last sentence of Section 4.23(a) and Parent presents reasonable evidence of such inaccuracy to the Company, any of its subsidiariesthe Company shall deliver, or any of cause its applicable Subsidiary to deliver, to Parent (or to the Governmental Permitstitle insurance company engaged by Parent) such reasonable and customary affidavits, within the meaning of the FCC Rules and the FCC’s orders indemnities and other published rulings thereunder. In additionagreements, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety evidence of the Company’s or any Subsidiary’s employeesauthority, suppliers, customers Lien releases and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shalldocuments and instruments, in each case to the extent legally permissible and only if time permits, consult with Parent prior reasonably required in order to taking the actions described in this sentencecure such inaccuracy.
Appears in 2 contracts
Samples: Merger Agreement (Goldfield Corp), Merger Agreement (Goldfield Corp)
Conduct of the Company. The From the date hereof until the Effective Time, the Company covenants and agrees thatits Subsidiaries shall conduct their business in the ordinary course consistent with past practice and shall use their best efforts to preserve intact their business organizations and relationships with third parties and to keep available the services of their present officers and employees. Without limiting the generality of the foregoing, except for matters (i) expressly permitted or expressly contemplated by this Agreement, (ii) set forth on Part 6.01 of the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken with the prior written consent of Parent or as contemplated by this Agreement or as set forth in Schedule 7.01 (which shall not be unreasonably withheld, conditioned or delayedexcept with respect to the Proposed Amended First American Credit Facility (as defined in Schedule 5.10), (vwhich the Company will not enter into without Parent's prior written consent) required by Applicable Law or the rules and regulations of Nasdaq, from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereof, Time:
(i) the Company (A) shallwill not, and shall cause each will not permit any of its Subsidiaries to use commercially reasonable efforts to (1) conduct its business in the ordinary course in all material respects, substantially consistent with past practice, (2) to the extent consistent with the foregoing clause (1), maintain its business as a going concern and (3) keep available the services of its current officers and key employees and to preserve the goodwill of and maintain satisfactory relationships with those Persons having material business relationships with the Company and its Subsidiaries, and (B) shall not, and shall cause each of its Subsidiaries not to:
(a) amend the Company’s certificate of incorporation or bylaws, or amend any certificate of incorporation or bylaws, or other comparable charter or organizational documents, of the Company’s Subsidiaries;
(b) other than with respect to a direct or indirect wholly owned Subsidiary of the Company, (i) establish a record date for, declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock, property or otherwise) in respect of, or enter into any agreement with respect to the voting of, any capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), (ii) split, reverse split, combine, subdivide or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) of the Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c), issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), or (iv) purchase, redeem or otherwise acquire or offer to purchase, redeem or acquire any Company Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPP;
(c) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company Securitiesstock, other than (i) the issuance of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement or (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP dividends and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a distributions by any wholly owned Subsidiary of the Company to the Company or another a wholly owned Subsidiary of the Company, (ii) split, combine or reclassify any of its capital stock or (iii) purchase, redeem or otherwise acquire any shares of capital stock or options to acquire any such shares or other securities;
(b) the Company will not, and will not permit any of its Subsidiaries to, issue, deliver, sell, pledge or otherwise encumber any shares of its capital stock, any other voting securities or any securities convertible into, or any rights, warrants or options to acquire, any such shares, voting securities or convertible securities (other than, in the case of the Company, the issuance of Shares upon the exercise of stock options outstanding on the date of this Agreement in accordance with their current terms or the issuance of Shares in connection with the ESPP in accordance with its current terms);
(c) the Company will not adopt or propose any change to its charter or bylaws;
(d) mergethe Company will not, and will not permit any of its Subsidiaries to, merge or consolidate or, other than in the ordinary course of business substantially consistent with past practice, enter into strategic alliance or similar legal partnership with any other Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, of complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization liquidation of the Company or any of its Subsidiaries, or acquire a material amount of stock or assets of any other Person;
(e) the Company will not, and will not permit any of its Subsidiaries to, sell, lease, license, mortgage, pledge or xxxxx x Xxxx on or otherwise encumber or dispose of any material Subsidiary or material amount of assets or property except (i) increase the salary, wages, benefits, bonuses or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms of existing employment contracts or other compensation agreements commitments or arrangements in effect as of the date hereof, (Bii) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
(f) the Company will not, and will not permit any of its Subsidiaries to, incur, assume or guarantee any indebtedness for borrowed money, except for such borrowings (i) sell, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse or otherwise dispose under the Company's existing letters of any assets, properties, or Company Intellectual Property, in each case having a value in excess credit for purchases of $500,000 individually or $5,000,000 in the aggregate, except merchandise inventory in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice;
, (jii) agree to any exclusivity, non-competition or similar provision or covenant limiting under the ability Company's existing credit facilities (other than letters of the Company or any of its Subsidiaries to compete or engage credit) that would not result in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers total outstanding indebtedness of the Company and its Subsidiaries on a consolidated basis in excess of $1,000,000 at any one time and (iii) in connection with new capital leases for data processing software and hardware not in excess of $1,000,000;
(g) the Company will not, and will not permit any of its Subsidiaries to, increase the compensation or similar arrangementsbenefits of any director, that (x) are made officer or employee, except for normal increases in the ordinary course of business substantially consistent with past practicepractice or as required by applicable law or any existing agreement or commitment;
(h) the Company will not, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would will not have any such effect (or otherwise restrict or bind) on Parent or permit any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or Subsidiaries to, change any method of the accounting methods or accounting principles used by the Company materially affecting its assets, liabilities or businessit, except for any such changes that are change required by (i) reason of a concurrent change in GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities 1934 Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(li) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company will not, and will not permit any of its wholly-owned Subsidiaries to, make or between change any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(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 material amended Tax Return or file any material Tax Return in a manner inconsistent with past practiceReturn, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceedingclaim or assessment, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside or take or omit to take any other action, if any such action or omission would have the effect of increasing the Tax liability or reducing any Tax Asset of the Company, any of its Subsidiaries, Parent or any Affiliate of Parent, other than a settlement or settlements relating to pending state tax disputes specified on Schedule 5.20(c) that do not exceed, in the aggregate, $325,000;
(j) the Company will not, and will not permit any of its Subsidiaries to, conduct any unusual liquidation of inventory or going out of business sale or any discount or other sale other than in the ordinary course of businessbusiness consistent with past practice, including with respect to time of year, pricing, location and goods sold;
(nk) the Company will not, and will not permit any of its Subsidiaries to, enter into or make any contract or commitment with (including in respect to of capital expenditures expenditures) or series of related contracts or commitments involving payments in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedulecontracts or commitments contemplated by the Company's 1999 and 2000 capital expenditure plans previously provided to Parent;
(o) institute, settle or agree to settle any Proceedings, other than (il) the settlement of claimsCompany will not, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor and will not permit any of its Subsidiaries shall settle to, fail to maintain insurance upon all its properties and with respect to the conduct of its business of such kinds and in such amounts as is currently in effect;
(m) the Company will not, and will not permit any of its Subsidiaries to, (i) take any action that would make any representation and warranty of the Company hereunder inaccurate in any material respect at, or agree to settle as of any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on time prior to, the Company’s business Effective Time or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than in the ordinary course of business or as contemplated by this Agreement (i) amend, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an Affiliate of the Company;
(s) voluntarily terminate, amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Act; or
(u) authorize, commit or agree omit to take any of action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time; and
(n) the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the MergerCompany will not, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, and will not permit any of its subsidiariesSubsidiaries to, agree or commit to do any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentenceforegoing.
Appears in 2 contracts
Samples: Merger Agreement (Charming Shoppes Inc), Merger Agreement (Catherines Stores Corp)
Conduct of the Company. The From the date hereof until the Effective Time, the Company covenants and agrees that, except for matters (i) expressly permitted or expressly contemplated by this Agreement, (ii) set forth on Part 6.01 its Subsidiaries shall conduct their business in the ordinary course consistent with past practice and shall use their commercially reasonable efforts to preserve intact their respective business organizations and relationships with third parties and to keep available the services of their present officers and employees. Without limiting the generality of the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken with the prior written consent of Parent (which shall not be unreasonably withheld, conditioned or delayed), (v) required by Applicable Law or the rules and regulations of Nasdaqforegoing, from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereofTime, the Company shall not (A) shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) conduct its business in the ordinary course in all material respects, substantially consistent with past practice, (2) to the extent consistent with the foregoing clause (1), maintain its business as a going concern and (3) keep available the services of its current officers and key employees and to preserve the goodwill of and maintain satisfactory relationships with those Persons having material business relationships with the Company and its Subsidiaries, and (B) shall not, and shall cause each of its Subsidiaries not to:) without the prior written consent of Gateway (which consent shall not be unreasonably withheld or delayed):
(a) amend the Company’s certificate adopt or propose any change in its Memorandum of incorporation Association or bylawsAmended and Restated Bye-Laws or similar organizational documents or any reclassification, recapitalization, stock split or combination, exchange or readjustment of Shares, or amend any certificate of incorporation or bylaws, or other comparable charter or organizational documents, of the Company’s Subsidiariesstock dividend thereon;
(b) amalgamate, merge or consolidate with any other than with respect to Person or acquire a direct material amount of assets of any other Person;
(c) sell, lease, license or indirect wholly owned Subsidiary otherwise dispose of the Company, any material assets or property except (i) establish a record date for, declare, set aside pursuant to existing contracts or pay any dividends on, or make any other distributions (whether in cash, stock, property or otherwise) in respect of, or enter into any agreement with respect to the voting of, any capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), commitments and (ii) splitin the ordinary course consistent with past practice;
(d) knowingly take or omit to take any actions, reverse splitthat, combine, subdivide individually or reclassify in the aggregate with other such actions or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) of omissions by the Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c), issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), or (iv) purchase, redeem or otherwise acquire or offer would reasonably be expected to purchase, redeem or acquire any Company Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPP;
(c) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company Securities, other than (i) the issuance of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement or (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to have a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company;
(d) merge, consolidate or, other than in the ordinary course of business substantially consistent with past practice, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its SubsidiariesMaterial Adverse Effect;
(e) (i) increase the salary, wages, benefits, bonuses or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
(i) sell, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregate, except in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice;
(j) agree to any exclusivity, non-competition or similar provision or covenant limiting the ability of the Company or any of its Subsidiaries to compete or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;
(o) institute, settle or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than in the ordinary course of business consistent with past practice, waive, release, grant, or as contemplated by this Agreement transfer any assets of material value;
(f) other than in the ordinary course of business consistent with past practice, modify or change in any material respect any existing material license or customer contract;
(g) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person (other than any majority-owned Subsidiary) which, are in excess of $15 million in the aggregate;
(h) make any loans, advances or capital contributions to, or investments in, any other Person (other than any majority-owned Subsidiary) which are in excess of $15 million in the aggregate;
(i) amendother than in the ordinary course of business consistent with past practice, modifymake or change any material tax election or settle or compromise any material income tax liability in excess of $15 million in the aggregate;
(j) adopt, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) propose or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement(i) employment, or (ii) renew or enter into any Contract with an Affiliate of the Company;
(s) voluntarily terminatedeferred compensation, amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees severance, retirement or other service providers similar agreement with any director or otherwise implement any layoffs, in each case that could implicate the WARN Act; or
(u) authorize, commit or agree to take any executive officer of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary (or any amendment to any such existing agreement), (ii) grant of any severance or termination pay to any director or executive officer of the Company or any Subsidiary or (including iii) material increase in compensation, bonus or other benefits payable to any COVID-19 Measuresdirector or executive officer of the Company or any Subsidiary pursuant to any employment agreement or severance or retirement plans or policies thereof, other than, in the case of clause (ii) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shalliii), any increase prior to the extent legally permissible and only if time permits, consult date hereof in the ordinary course of business consistent with Parent prior past practice or as otherwise required by law; or
(k) agree or commit to taking do any of the actions described in this sentenceforegoing.
Appears in 2 contracts
Samples: Amalgamation Agreement (Flag Telecom Group LTD), Amalgamation Agreement (Flag Telecom Group LTD)
Conduct of the Company. The Company covenants and agrees that, except for matters (i) expressly permitted or expressly contemplated by this Agreement, (ii) Except as set forth on Part 6.01 of the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken with the prior written consent of Parent (which shall not be unreasonably withheld, conditioned Schedule 5.01 or delayed), (v) required by Applicable Law or the rules and regulations of Nasdaqas otherwise contemplated herein, from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereof, the Company (A) shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) conduct its business in the ordinary course in all material respects, substantially consistent with past practice, (2) to the extent consistent with the foregoing clause (1), maintain its business as a going concern and (3) keep available the services of its current officers and key employees and to preserve the goodwill of and maintain satisfactory relationships with those Persons having material business relationships with the Company and its Subsidiaries, and (B) shall not, and shall cause each of its Subsidiaries not to:
(a) amend the Company’s certificate of incorporation or bylaws, or amend any certificate of incorporation or bylaws, or other comparable charter or organizational documents, of the Company’s Subsidiaries;
(b) other than with respect to a direct or indirect wholly owned Subsidiary of the Company, (i) establish a record date for, declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock, property or otherwise) in respect of, or enter into any agreement with respect to the voting of, any capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), (ii) split, reverse split, combine, subdivide or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) of the Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c), issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), or (iv) purchase, redeem or otherwise acquire or offer to purchase, redeem or acquire any Company Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPP;
(c) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company Securities, other than (i) the issuance of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement or (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company;
(d) merge, consolidate or, other than in the ordinary course of business substantially consistent with past practice, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries;
(e) (i) increase the salary, wages, benefits, bonuses or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
(i) sell, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregate, except in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice;
(j) agree to any exclusivity, non-competition or similar provision or covenant limiting the ability of the Company or any of its Subsidiaries to compete or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;
(o) institute, settle or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than in the ordinary course of business or as contemplated by this Agreement (i) amend, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an Affiliate of the Company;
(s) voluntarily terminate, amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Act; or
(u) authorize, commit or agree to take any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially shall conduct their business in the ordinary course consistent with past practice in all material respects and shall use their best efforts to preserve intact their business organizations and relationships with third parties and to keep available the services of their present officers and employees in all material respects and shall use reasonable actions necessary best efforts to implement in all material respects their 1998 Capital Plan which is attached hereto as Schedule 5.01 (x) respond to emergencies or protect the health and safety Capital Plan). Without limiting the generality of the Company’s or any Subsidiary’s employeesforegoing, suppliersand except as contemplated herein, customers and other individuals having business dealings with from the date hereof until the Effective Time without the consent of Buyer which shall not be unreasonably withheld:
(a) the Company or will not, and will not permit any Subsidiary of the Company to, adopt or propose any change in its Articles of Incorporation or Bylaws;
(including b) the Company will not, and will not permit any COVID-19 MeasuresSubsidiary of the Company to, merge or consolidate with any other Person or acquire assets from any other Person in excess of $500,000;
(c) the Company will not, and will not permit any Subsidiary of the Company to, sell, lease, license or otherwise dispose of any material assets or property except (i) pursuant to existing contracts or commitments disclosed herein and (ii) in excess of $500,000;
(d) other than as set forth in the Capital Plan, the Company will not, and will not permit any Subsidiary of the Company to, make any capital expenditure in excess of $500,000;
(e) the Company will not, and will not permit any Subsidiary of the Company to, enter into or amend in any material respect any agreement (other than, in the case of amendments, a Franchise) that would be required to be disclosed on Schedule 3.22 or Schedule 3.23;
(f) the Company will not, and will not permit any Subsidiary of the Company to, take any action described in subsections (b), (c), (d), (e), (f), (h), (i), or (yj) respond to third-party supply or service disruptions caused by the coronavirus of Section 3.12;
(COVID-19g) pandemic; provided that the Company shallwill not, and will not permit any Subsidiary of the Company to, agree or commit to do any of the foregoing; or
(h) with such exceptions as do not, in the aggregate, have a Material Adverse Effect, the Company will not, and will not permit any Subsidiary of the Company, to take or agree or commit to take any action that would knowingly make any representation and warranty of the Company hereunder inaccurate (disregarding any qualification therein for materiality or Material Adverse Effect) at, or as of any time prior to, the Effective Time. The Companys obligations under this Section 5.01 and each other covenant in this Agreement are subject, in the case of Mercom and the Mercom Subsidiaries, to the extent legally permissible and only if time permits, consult with Parent prior to taking fiduciary duties of the actions described in this sentenceCompany as the controlling shareholder of Mercom.
Appears in 2 contracts
Samples: Merger Agreement (Level 3 Communications Inc), Merger Agreement (Cable Michigan Inc)
Conduct of the Company. (a) The Company covenants and agrees that, during the period from the date hereof through the earlier of the Effective Time or the date of termination of this Agreement in accordance with the terms hereof, except for matters (i) expressly permitted or expressly contemplated by this Agreement, (ii) set forth on Part 6.01 of the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken with the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed), (vii) set forth in Section 6.1 of the Company Disclosure Schedule, (iii) as expressly required by Applicable this Agreement, or (iv) as may be required to facilitate compliance with any Law or the rules and regulations of Nasdaq, from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereofOrder, the Company (A) shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) to, conduct its business in the ordinary course in all material respectsrespects and, substantially consistent with past practice, (2) to the extent consistent with the foregoing clause (1)therewith, maintain its business as a going concern and (3) keep available the services of its current officers and key employees and to preserve the goodwill of and maintain satisfactory relationships with those Persons having material business relationships with the Company and its Subsidiaries, and (B) shall notshall, and shall cause each of its Subsidiaries not to:, use its reasonable best efforts to preserve substantially intact its and its Subsidiaries’ business organization, to keep available the services of its and its Subsidiaries’ current officers and employees, to preserve its and its Subsidiaries’ present relationships with customers, suppliers, distributors, licensors, licensees, and other Persons having business relationships with it. The Company shall prepare and file, or cause to be prepared and filed, any Tax Return required to be filed by or with respect to the Acquired Companies on or before the Closing Date (“Company Tax Returns”), and pay any liability for Taxes reflected thereon. The Company shall prepare all Company Tax Returns, in accordance with applicable Law and, unless otherwise required by applicable Law, consistent with past practice.
(a) Between the date of this Agreement and the earlier of the Acceptance Time and the date of termination of this Agreement, except for matters (i) undertaken with the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed), (ii) as set forth in Section 6.1 of the Company Disclosure Schedule, (iii) as expressly required by this Agreement, (iv) as may be necessary to carry out the Transactions, or (v) as may be required to facilitate compliance with any Law or Order, the Company shall not, nor shall it permit any of its Subsidiaries to, do any of the following:
(i) amend the Company’s certificate Company Certificate of incorporation Incorporation or bylawsthe Company By-laws, or amend any certificate of incorporation or bylaws, or other comparable charter or organizational documents, Organizational Documents of the Company’s Subsidiaries;
(bii) other than with respect to a direct or indirect wholly owned Subsidiary of the Company, (iA) establish a record date for, declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock, property property, or otherwise) in respect of, or enter into any agreement with respect to the voting of, any capital stock of any Acquired Company, other than dividends and distributions by a direct or indirect wholly owned Subsidiary of the Company or any of to its Subsidiaries (or securities convertible or exchangeable therefor)parent, (iiB) split, reverse split, combine, subdivide combine or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) of the Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c), issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor)Acquired Companies, or (ivC) purchase, redeem redeem, or otherwise acquire acquire, or offer to purchase, redeem redeem, or acquire otherwise acquire, any Company Securitiessecurities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Company, in each case, Company in satisfaction by holders of Company Equity Compensatory Awards of the applicable exercise price or withholding taxes or in accordance Taxes with the terms of the ESPPrespect to such Company Compensatory Award;
(ciii) (A) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber Encumbrance (other than transfer restrictions arising under applicable Law) or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company Securitiessecurities, other than (ix) the issuance of shares of Company Common Stock pursuant to (A) upon the terms exercise, conversion or settlement of the Company Equity Compensatory Awards that are outstanding on the date hereofhereof or issued in compliance with the terms of this Agreement, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement or Compensatory Awards, and (By) grants or awards of Company Securities or securities (including Company Equity Awards required to be Compensatory Awards) made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company;
(d) merge, consolidate or, other than in the ordinary course of business substantially consistent with past practice, enter into strategic alliance including in connection with new hires, performance recognition and promotions, in aggregate amount of up to $50,000, or similar legal partnership with (B) amend any Personterm of any security of the Acquired Companies (in each case, file a voluntary petition for bankruptcy whether by merger, consolidation, or liquidation, dissolve, liquidate, restructure or recapitalize or otherwise);
(iv) adopt a plan or agreement of, or resolutions providing for or authorizing, of complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization recapitalization, or other reorganization reorganization, both with respect to the Acquired Companies;
(v) except as set forth on Section 6.1(b)(v) of the Company Disclosure Schedule, (i) establish, adopt, enter into, terminate or materially amend any Company Benefit Plan (or any plan, program, arrangement or agreement that would be a Company Benefit Plan if it were in existence on the date hereof), (ii) amend or waive any of its Subsidiaries;
rights under, or accelerate the vesting under, any provision of any Company Benefit Plan (eor any plan, program, arrangement or agreement that would be a Company Benefit Plan if it were in existence on the date hereof), (iii) grant or increase any severance, retention or termination pay to any current or former employee, officer, director or independent contractor of any Acquired Company, (iiv) unless required to be made pursuant to the terms of Company Benefit Plans in effect as of the date hereof, grant or increase the salary, wages, benefits, bonuses bonuses, or other cash compensation payable or to become payable to the Company’s current or former directors, officers or employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements Company Benefit Plans in effect as of the date hereof, (Bv) required under grant any Company Employee Plan pursuant to equity, equity-based, or other incentive awards to, or discretionarily accelerate the terms in effect as vesting or payment of any such awards held by, any current or former employee, officer, director or independent contractor of any of the date hereof or Collective Bargaining Agreement or under Applicable LawAcquired Companies, (Cvi) made in hire any employees (at the ordinary course level of business and substantially consistent with past practiceVice President or higher), (vii) terminate the employment of any employees at the level of Vice President or higher other than for cause, or (Dviii) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan employment, consulting, change in control, severance or plan, agreement, arrangement, similar agreement with the Company’s officers (at the level of Vice President or policy that would be a Company Employee Plan if in effect on the date hereofhigher);
(fvi) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property assets or capital stock of, or make any loans, advances or capital contribution to of any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate), other than one (A) the purchase of materials from suppliers or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets vendors in the ordinary course of business and in amounts substantially consistent with past practicepractice or (B) one or more acquisitions in the ordinary course of business that, individually or in the aggregate, involve a purchase price of not more than $100,000;
(ivii) sell, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse Encumbrance or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value in excess material assets or material properties except (A) pursuant to Contracts or commitments existing as of $500,000 individually the date hereof, (B) non-exclusive licenses of Intellectual Property assets to its customers, contractors, partners or $5,000,000 in the aggregate, except suppliers in the ordinary course of the Company’s business, or its Subsidiaries’ business substantially consistent with past practice(C) Permitted Encumbrances;
(jviii) agree to any exclusivity, non-competition or similar provision or covenant limiting the ability of the Company or any of its Subsidiaries to compete or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X promulgated under the Securities Exchange Act;
(ix) (A) incur or assume any indebtedness for borrowed money, or (iiiB) by assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for indebtedness for borrowed money of any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization)other Person;
(lx) incur any capital expenditures other than (i) consistent with the Company’s capital expenditure budget previously made available to Parent, or (ii) in excess of $100,000 in the aggregate;
(xi) institute or settle any Legal Proceeding involving monetary damages in excess of $100,000 individually or $250,000 in the aggregate; provided that the settlement, release, waiver or compromise of any Legal Proceeding or claim brought by the stockholders of the Company against the Company and/or its directors or officers relating to the Transactions or a breach of this Agreement or any other agreements contemplated hereby shall be subject to Section 3.8 or Section 6.16, as applicable;
(xii) commence any preclinical or clinical development, study, trial or test with respect to any products or product candidates;
(xiii) fail to file, report, complete or otherwise make any submission required under Healthcare Laws;
(xiv) adopt, modify, or terminate any collective bargaining or other agreement of any type with a Union, in each case whether written or oral;
(xv) enter into or amend or modify in any material respect, or consent to the termination of (other than at its stated expiry date), any Company Material Contract, any Contract with respect to any joint venture, strategic partnership or alliance, or any agreement concerning Leased Real Property or any other Contract that, if in effect as of the date hereof would constitute a Material Contract hereunder, in each case, except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and consistent with past practice;
(xvi) except for intercompany loansas otherwise required by Law, guarantees, advance (A) fail to file any income or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries other material Tax Return of the CompanyAcquired Companies when due (after giving effect to any properly obtained extensions of time in which to make such filings), (iB) incur, issue, make or otherwise become liable for change any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify material Tax election in a manner which is materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practice, enter into or change any “closing agreement” within the meaning Tax accounting period or method of Section 7121 Tax accounting of the Code Acquired Companies; (C) amend any income or similar provision of stateother material Tax Return, local (D) settle or non-U.S. law) in respect of any material Tax, settle compromise any material Tax Proceeding, surrender any right audit or Tax proceeding relating to claim a material Tax refund, offset the Acquired Companies; (E) change the U.S. federal income tax classification; or other reduction in Tax liability, or consent (F) agree to any an extension or waiver of the statute of limitations period applicable to in respect of any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;
Acquired Companies (o) institute, settle or agree to settle any Proceedings, other than pursuant to (ix) the settlement extensions of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree time to settle any Proceeding which settlement involves file a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than Tax Return obtained in the ordinary course of business or as contemplated by this Agreement (iy) amendan audit of Taxes to defend the Acquired Company against the assessment or collection of a Tax);
(xvii) adopt or implement any stockholder rights plan or similar arrangement;
(xviii) engage in any transaction with, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreementagreement, arrangement or (ii) renew or enter into understanding with, any Contract with an Affiliate of the Company;
(s) voluntarily terminate, amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case Person covered by Item 404 of Regulation S-K promulgated by the SEC that could implicate would be required to be disclosed pursuant to Item 404 of Regulation S-K promulgated by the WARN ActSEC; or
(uxix) authorize, commit or agree to take any of the foregoing actions. Notwithstanding anything set forth the foregoing, nothing contained in this Agreement shall give to Parent or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shallSub, directly or indirectly, exercise any form of rights to control over or direct the Company, any of its subsidiaries, or any operations of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, Acquired Companies prior to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentenceEffective Time.
Appears in 2 contracts
Samples: Merger Agreement (Harmony Biosciences Holdings, Inc.), Merger Agreement (Harmony Biosciences Holdings, Inc.)
Conduct of the Company. The From the date of this Agreement until the Effective Time, the Company covenants shall, and agrees thatshall cause each of its Subsidiaries to, conduct its business in all material respects in the ordinary course consistent with past practice and in compliance with all material Applicable Laws and all material governmental authorizations, and use its commercially reasonable efforts to preserve intact its present business organization, maintain in effect all Company Permits, keep available the services of its directors, officers and employees and maintain satisfactory relationships with its customers, lenders, suppliers and others having material business relationships with it. Without limiting the generality of the foregoing and to the fullest extent permitted by Applicable Law, from the date of this Agreement until the Effective Time, except for matters (i) expressly permitted or expressly contemplated by this Agreement, (ii) as set forth on Part in Section 6.01 of the Company Disclosure Schedule, (iii) reasonably undertaken in connection or with any COVID-19 Measures, (iv) undertaken with the Parent’s prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed), (v) or to the extent permitted or required by Applicable Law or the rules and regulations of Nasdaq, from the date hereof until the earlier of the Effective Time and the termination another Section of this Agreement in accordance with Article 8 hereofAgreement, the Company (A) shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) conduct its business in the ordinary course in all material respects, substantially consistent with past practice, (2) to the extent consistent with the foregoing clause (1), maintain its business as a going concern and (3) keep available the services of its current officers and key employees and to preserve the goodwill of and maintain satisfactory relationships with those Persons having material business relationships with the Company and its Subsidiaries, and (B) shall not, and shall cause each not permit any of its Subsidiaries not to:
(a) amend the Company’s its certificate or articles of incorporation or bylawsincorporation, or amend any certificate of incorporation or bylaws, bylaws or other comparable charter similar organizational documents (whether by merger, consolidation or organizational documents, of otherwise) or the Company’s SubsidiariesCompany Rights Agreement;
(b) other than with respect to a direct or indirect wholly owned Subsidiary of the Company, (i) establish a record date forsplit, combine or reclassify any shares of its capital stock, (ii) declare, set aside or pay any dividends on, dividend or make any other distributions distribution (whether in cash, stock, property or otherwiseany combination thereof) in respect of any shares of its capital stock or other securities (other than dividends or distributions by any of its wholly-owned Subsidiaries), or (iii) redeem, repurchase, cancel or otherwise acquire or offer to redeem, repurchase, or otherwise acquire, any of its securities or any securities of any of its Subsidiaries, other than the cancellation of Company Stock Options in connection with the exercise thereof;
(c) (i) grant, issue, deliver or sell, or authorize the grant, issuance, delivery or sale of, any Company Securities or enter into Company Subsidiary Securities, other than the issuance of any agreement shares of the Company Stock upon the exercise of Company Stock Options that are outstanding on the date of this Agreement in accordance with the terms of those options on the date of this Agreement or (ii) amend any term of any Company Security or any Company Subsidiary Security (in each case, whether by merger, consolidation or otherwise);
(d) directly or indirectly (i) acquire (including by merger, consolidation, or acquisition of stock or assets) all or substantially all of the equity interest or assets of any corporation, partnership, other business organization or any division thereof from any other Person, (ii) merge or consolidate with any other Person or (iii) adopt a plan of complete or partial liquidation, dissolution, recapitalization or restructuring;
(e) sell, lease, license or otherwise dispose of any Subsidiary or any material amount of assets, securities or property having in the aggregate either a book value or fair market value in excess of $1,000,000, except (i) pursuant to existing Contracts, copies of which have been previously provided to Parent or (ii) sales of inventory in the ordinary course consistent with past practice;
(f) create or incur any Lien on any material asset other than Permitted Liens;
(g) make any loan, advance or investment either by purchase of stock or securities, contributions to capital, property transfers, or purchase of any property or assets of any Person other than (i) loans or advances to, or investments in, its wholly-owned Subsidiaries, (ii) advances to suppliers in the ordinary course of business consistent with past practice, in each case, that do not exceed the advance received by the Company from its customer under the order or Contract for which such supplier is providing supplies to the Company, or (iii) advances in an amount not in excess of $50,000;
(h) (i) create, incur, assume, suffer to exist or otherwise be liable with respect to the voting ofany indebtedness for borrowed money, any capital stock obligations under conditional or installment sale Contracts or other Contracts relating to purchased property, debt securities, options, warrants, calls or other rights to acquire any debt securities of the Company or its Subsidiaries, any “keepwell” or other agreement to maintain any financial statement condition of any other Person or any guarantees of any of the foregoing (collectively, “Indebtedness” ) other than (A) such Indebtedness pursuant to Contracts that exist on the date hereof, copies of which have been provided to Parent or (B) new Indebtedness of up to $50,000 in the aggregate or (ii) amend, modify or refinance any Indebtedness other than Indebtedness in an amount not to exceed $50,000 in the aggregate;
(i) (i) enter into or offer or propose to enter into, amend or terminate any Contract (other than any Contract with any customer or supplier of the Company or its Subsidiaries entered into in the ordinary course of business consistent with past practice) that provides for payments to or from the Company or any of its Subsidiaries in excess of $500,000 over any twelve month period or (ii) or waive any material right under any such Contract;
(j) terminate, suspend, abrogate, amend or modify in any material respect any material Company Permit;
(k) except as required by this Agreement, Applicable Laws or existing Employee Plans or Contracts, (i) grant, increase or accelerate any severance, termination pay or benefits to (or securities convertible amend any existing arrangement providing for such severance, termination pay or exchangeable therefor)benefits with) any of their respective directors, officers or employees, (ii) splitenter into any employment, reverse split, combine, subdivide deferred compensation or reclassify or otherwise amend the terms of any capital stock other similar agreement (or securities convertible or exchangeable thereforany amendment to any such existing agreement) of the Company or with any of its Subsidiariestheir respective existing directors, officers or employees, (iii) establish, adopt or amend (except as expressly provided in Section 6.01(c)required by Applicable Law) any collective bargaining, issue bonus, profit-sharing, thrift, pension, retirement, deferred compensation, severance, compensation, stock option, restricted stock or authorize other benefit plan or arrangement covering any of their respective directors, officers or employees or (iv) increase or accelerate the issuance compensation, bonus or other benefits payable to any of any other securities in respect oftheir respective directors, executives, employees or independent contractors, except, in lieu the case of employees who are not officers, increases that are not material and that are made in the ordinary course of business consistent with past practice;
(l) make any material change in any method of accounting or accounting principles or practice, except for any such change required by reason of a concurrent change in substitution forGAAP or Regulation S-X under the 1934 Act, shares as approved by its independent public accountants;
(m) settle or compromise any material liability for Taxes, amend any material Tax Return, make or revoke any material Tax election, adopt or change any material method of capital stock accounting for Tax purposes, surrender any right to a claim for refund of material Taxes, or change any material Tax reporting method policy or procedure;
(n) commence any Action or settle, or offer or propose to settle, any Action or other claim involving or against the Company or any of its Subsidiaries (involving a payment by or securities convertible to the Company or exchangeable therefor)its Subsidiaries in excess of $100,000 or that would impose any equitable relief on, or (iv) purchasethe admission of wrongdoing by, redeem or otherwise acquire or offer to purchase, redeem or acquire any Company Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPP;
(co) issue, deliverfail to use reasonable efforts to maintain existing material insurance policies or comparable replacement policies to the extent available for a similar reasonable cost;
(p) assign, sell, grant, announce, pledge, transfer, subject otherwise transfer or grant any license or other rights with respect to any LienCompany Owned Intellectual Property or fail to prosecute and maintain all patents, otherwise encumber or dispose of any equity interests of registrations and applications included in the Company Owned Intellectual Property, including by paying any related fees when due;
(q) (i) pay, discharge, settle or incur satisfy any obligation to make any payments to any Person based on the price claims, liabilities or value of any Company Securitiesobligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (i) the issuance payment, discharge or satisfaction in the ordinary course of shares of Company Common Stock pursuant to (A) the business consistent with past practice or as required by their terms of Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement or (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company;
(d) merge, consolidate or, other than in the ordinary course of business substantially consistent with past practice, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries;
(e) (i) increase the salary, wages, benefits, bonuses or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
(i) sell, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregate, except in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice;
(j) agree to any exclusivity, non-competition or similar provision or covenant limiting the ability of the Company or any of its Subsidiaries to compete or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;
(o) institute, settle or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reflected or reserved against on in the most recent balance sheet audited financial statements (or the notes thereto) of the Company included in the Company SEC Documents (for amounts not in excess of such reserves) or incurred since the date of such financial statements in the ordinary course of business consistent with past practice, (ii) cancel any material Indebtedness or (Biii) involving payments waive, release, grant or transfer any right of less than $500,000 individually material value;
(r) renew or $1,000,000 enter into any non-compete, exclusivity, non-solicitation or similar agreement that would restrict or limit, in any material respect, the aggregate; provided that neither operations of the Company nor or any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Subother than as permitted in Section 6.02(b);
(ps) enter into any material new line of business outside of its existing business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than in the ordinary course of business or as contemplated by this Agreement (i) amend, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an Affiliate of the Company;
(s) voluntarily terminate, amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct enter into any reduction-in-force new lease or amend the terms of employees any existing lease with respect to the Leased Real Property;
(u) intentionally take any action (or other service providers intentionally omit to take any action) that would, to the knowledge of the Company at the time the action is taken, result in any of the conditions set forth in Article 9 not to be satisfied;
(v) intentionally take any action (or otherwise implement intentionally omit to take any layoffsaction) that would, to the knowledge of the Company at the time the action is taken, materially and adversely affect Parent’s and Merger Subsidiary’s ability to consummate the Financing;
(w) purchase, lease or license or make any commitment to purchase, lease or license, any real property or personal property (including any software) or incur or commit to incur any capital expenditure or authorization or commitment with respect thereto, in each case that could implicate case, at a cost in excess of $300,000 for any individual item or $3,000,000 in the WARN Actaggregate; or
(ux) authorizeagree, resolve or commit or agree to take do any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentenceforegoing.
Appears in 2 contracts
Samples: Merger Agreement (Labarge Inc), Merger Agreement (Ducommun Inc /De/)
Conduct of the Company. The Company covenants and agrees that, except for matters (ia) expressly Except as otherwise contemplated or permitted or expressly contemplated by this Agreement, (ii) set forth on Part 6.01 of the Company Disclosure Scheduleas required by applicable Law, (iii) reasonably undertaken in connection or with any COVID-19 Measures, (iv) undertaken with the prior written Parent’s consent of Parent (which shall not be unreasonably withheld, conditioned or delayed), (v) required by Applicable Law or during the rules and regulations of Nasdaq, period from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereofTime, the Company (A) shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) to, conduct its business in the ordinary course in all material respects, substantially a manner that is consistent with past practicepractice and in compliance in all material respects with applicable Law and all Material Contracts. Without limiting the generality of the foregoing, (2) to during the extent consistent with period from the foregoing clause (1)date hereof until the Effective Time, maintain its business as a going concern and (3) keep available the services of its current officers and key employees and to preserve the goodwill of and maintain satisfactory relationships with those Persons having material business relationships with the Company and its Subsidiaries, and (B) shall notshall, and shall cause each of its Subsidiaries not to, use its reasonable best efforts to (i) preserve intact its present business organization, (ii) maintain in effect all of its foreign, federal, state and local Permits, (iii) keep available the services of its directors, officers, Employees and consultants, and (iv) maintain its existing business relationships and goodwill with those Persons having significant business relationships with it.
(b) Without limiting the generality of the foregoing, except as expressly required by this Agreement, as required by applicable Law or as set forth in the applicable subsection of Section 5.01(b) of the Disclosure Letter, or with Parent’s consent, during the period from the date hereof until the Effective Time, the Company shall not, nor shall it permit any of its Subsidiaries to:
(ai) amend the Company’s its certificate of incorporation or bylawsincorporation, or amend any certificate of incorporation or bylaws, bylaws or other comparable charter similar organizational documents (whether by merger, consolidation or organizational documents, of the Company’s Subsidiariesotherwise);
(bii) (A) split, combine or reclassify any shares of its capital stock or any other than with equity securities (including the Shares), (B) declare, set aside, establish a record date for or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect to a direct or indirect of its capital stock, except for dividends payable by any of wholly owned Subsidiary of the Company, (i) establish a record date for, declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock, property or otherwise) in respect of, or enter into any agreement with respect to the voting of, any capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), (ii) split, reverse split, combine, subdivide or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) of the Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c), issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), or (ivC) purchase, redeem or otherwise acquire or offer other than to purchase, redeem or acquire satisfy any Company Securities, except for Tax withholding obligations upon the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPP;
(c) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value vesting of any Company Securities, other than (i) the issuance of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards RSUs that are outstanding on the date hereof, hereof in accordance with the applicable their respective terms of such Company Equity Awards as in effect on the date of this Agreement hereof, redeem, repurchase or (B) grants or awards of otherwise acquire, any Company Securities or any Company Equity Awards required to be made pursuant to Subsidiary Securities;
(iii) (A) issue, sell or otherwise deliver any Company Securities or any Company Subsidiary Securities, other than the issuance of (I) any Shares upon the vesting of any Company RSUs that are outstanding on the date hereof in accordance with their respective terms of existing employment or other compensation agreements or arrangements in effect as of on the date hereof; provided , (II) any Shares upon the exercise of any Company Warrants that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or outstanding on the date hereof in accordance with their respective terms on the date hereof, and (iiIII) the issuance of shares of any Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company Securities to the Company or another any other wholly owned Subsidiary of the Company;
(d) merge, consolidate or, other than in the ordinary course of business substantially consistent with past practice, enter into strategic alliance ; or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries;
(e) (i) increase the salary, wages, benefits, bonuses or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under amend any term of any Company Employee Plan pursuant to the terms in effect as of the date hereof Security or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
Subsidiary Security (f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
(i) sell, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregate, except in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice;
(j) agree to any exclusivity, non-competition or similar provision or covenant limiting the ability of the Company or any of its Subsidiaries to compete or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customerswhether by merger, contractors, distributors, resellers, partners consolidation or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organizationotherwise);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;
(o) institute, settle or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than in the ordinary course of business or as contemplated by this Agreement (i) amend, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an Affiliate of the Company;
(s) voluntarily terminate, amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Act; or
(u) authorize, commit or agree to take any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentence.
Appears in 2 contracts
Samples: Merger Agreement (Timber Pharmaceuticals, Inc.), Merger Agreement (Timber Pharmaceuticals, Inc.)
Conduct of the Company. The Company covenants and agrees that, except for matters (i) expressly permitted or expressly contemplated by this Agreement, (ii) Except as set forth on Part in Section 6.01 of the Company Disclosure Schedule, (iii) reasonably undertaken as expressly contemplated in connection with any COVID-19 Measuresthis Agreement, (iv) undertaken with the prior written consent of Parent (which shall not be unreasonably withheld, conditioned or delayed), (v) as required by Applicable Law or the rules and regulations of NasdaqGovernmental Authority, from the date hereof until the earlier of the Effective Time and or the termination of this Agreement in accordance with Article 8 hereofits terms, the Company (A) shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) to, conduct its business in the ordinary course (including, without limitation, managing its cash and working capital (including the payment of accounts payable and the receipt of accounts receivable) in all material respects, substantially consistent with past practice, (2the ordinary course of business) and use its commercially reasonable efforts to the extent consistent with the foregoing clause (1), maintain preserve intact its business as a going concern organizations and (3) maintain relationships with third parties, and to keep available the services of its current present officers and key employees and to preserve employees. Without limiting the goodwill generality of and maintain satisfactory relationships with those Persons having material business relationships the foregoing, except with the prior written consent of Parent (Parent’s decision as to whether to grant any such consent (which decision can be made in Parent’s discretion) shall not be unreasonably delayed) or as expressly contemplated by this Agreement, as required by Applicable Law or Governmental Authority or set forth in Section 6.01 of the Company and its SubsidiariesDisclosure Schedule, and (B) the Company shall not, and nor shall cause each it permit any of its Subsidiaries not to:
(a) amend the Company’s certificate its articles of incorporation or bylawsincorporation, or amend any certificate of incorporation or bylaws, bylaws or other comparable charter or similar organizational documents, of the Company’s Subsidiaries;
(b) other than with respect to a direct or indirect wholly owned Subsidiary of the Company, (i) establish a record date forsplit, combine or reclassify any shares of its capital stock, (ii) declare, set aside or pay any dividends on, dividend or make any other distributions distribution (whether in cash, stock, stock or property or otherwiseany combination thereof) in respect ofof its capital stock, or enter into any agreement with respect to the voting of, any capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), (ii) split, reverse split, combine, subdivide or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) of the Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c)redeem, issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), or (iv) purchase, redeem repurchase or otherwise acquire or offer to purchaseredeem, redeem repurchase, or otherwise acquire any Company Securities or any Company Subsidiary Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPP;
(c) (i) issue, deliver, deliver or sell, grantor authorize the issuance, announcedelivery or sale of, pledge, transfer, subject to any Lien, otherwise encumber or dispose shares of any equity interests Company Securities or Company Subsidiary Securities, including the grant of Company Stock Awards, other than the issuance of (A) any shares of the Company Stock upon the exercise or incur any obligation to make any payments to any Person based on the price or value of any Company Securities, other than (i) the issuance of shares settlement of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereof, of this Agreement in accordance with the applicable terms of such Company Equity Awards as in effect those awards on the date of this Agreement or Agreement, (B) grants any Company Subsidiary Securities to the Company or awards any other Subsidiary of the Company and (C) any Company Stock Awards, or shares of Company Securities Stock issued upon the exercise or Company Equity Awards required settlement thereof, granted to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of new employees hired after the date hereof; provided , provided, however, that such grants Company Stock Awards may not exceed an amount of shares of Company Stock upon exercise or awards are settlement thereof in excess of 15,000 per new employee hired, and 75,000 in the aggregate for all such Company Stock Awards allowed pursuant to a form this subsection (C), and any such Company Stock Award shall exclude the transactions contemplated by this Agreement from any change of award agreement that has been made available control acceleration provisions therein; or (ii) amend any term of any Company Security or any Company Subsidiary Security;
(d) acquire (by merger, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, any material amount of assets, securities, properties, interests or businesses, other than pursuant to existing contracts or commitments disclosed to Parent on Section 6.01(d) of the Company Disclosure Schedule;
(e) sell, lease or otherwise transfer any of its material assets, securities, properties, interests or businesses, other than (i) pursuant to existing contracts or commitments or (ii) the issuance sale of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company;
(d) merge, consolidate or, other than in the ordinary course of business substantially consistent with past practice, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries;
(e) (i) increase the salary, wages, benefits, bonuses or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made inventory in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of (other than for causein connection with actions permitted by Section 6.01(d), as determined by the Company) make any employeematerial loans, officer, directoradvances or capital contributions to, or Independent Contractor whose annual base cash compensation exceeds $250,000investments in, any other Person;
(g) negotiate, enter into, amend or extend incur any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregateIndebtedness, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
(i) sell, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregate, except in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice;
(j) agree to any exclusivity, non-competition or similar provision or covenant limiting the ability of the Company or any of its Subsidiaries to compete or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution Indebtedness incurred between the Company and any of its wholly-owned Subsidiaries or between any of such wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse an amount not to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of exceed $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;
(o) institute, settle or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
employment (q) fail to maintain in all material respects any Insurance Policies;
(r) other than an at-will offer letter with a U.S. employee or an employment agreement with a non-U.S. employee that is entered into in the ordinary course of business and that does not provide for notice periods or as contemplated by this Agreement material benefits in excess of the minimum requirements under applicable Law or customary practice), deferred compensation or other similar agreement or amend any such existing agreement), (ii) increase benefits or compensation payable under any existing severance or termination pay plans, agreements or policies, (iii) establish, adopt or materially amend any collective bargaining, works council, bonus, profit-sharing, thrift, pension, retirement, severance, deferred compensation, stock option, restricted stock or other benefit plan, agreement, trust, fund, policy or arrangement, including any Employee Plan, or (iv) increase compensation, bonus or other benefits payable to any employee of the Company or any of its Subsidiaries;
(i) amendchange the Company’s methods of accounting, modifyexcept as required by concurrent changes in GAAP or in Regulation S-X of the 1934 Act, renew as agreed to by its independent public accountants;
(j) settle, or terminateoffer or propose to settle, (i) any material litigation, investigation, arbitration, proceeding or other claim involving or against the Company or any of its Subsidiaries, (ii) any stockholder litigation or dispute against the Company or any of its officers or directors or (iii) any litigation, arbitration, proceeding or dispute that relates to the transactions contemplated hereby;
(k) make, revoke or change any material Tax election or method of Tax accounting or settle or compromise any material liability with respect to Taxes;
(l) (i) abandon, disclaim, dedicate to the public, sell, assign or grant any release security interest in, to or waiver underunder any Owned Intellectual Property, including failing to perform or cause to be performed all necessary filings, recordings and other acts in respect of Registered Intellectual Property and, for the avoidance of doubt, any Material Contract Internet domain names, or to pay or cause to be paid all required fees and Taxes, and to maintain and protect its interest in the Owned Intellectual Property, (excluding the expiration of ii) grant to any Material Contract in accordance with its terms) third party any license, or enter into any new Contract covenant not to xxx, with respect to any Company Intellectual Property, except nonexclusive licenses in the ordinary course of business consistent with past practice, and (iii) disclose or allow to be disclosed any confidential information or confidential Company Intellectual Property to any Person, other than Persons that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof except where such confidential information is embodied by the Company Products;
(m) enter into any contract, arrangement, commitment or understanding that would have been constitute a Material Contract if in existence on the date of this Agreementor terminate, materially amend or modify, or (ii) renew or enter into waive any Contract with an Affiliate of the Company;
(s) voluntarily terminate, amend or fail to renew or preserve material right under any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffsMaterial Contract, in each case other than (i) any such customer contracts in the ordinary course of business consistent with past practice and (ii) any ordinary course amendment or modification to any Material Contract that could implicate does not result in an increase in aggregate liabilities of the WARN ActCompany or any of its Subsidiaries under such Material Contract; or
(un) authorizeagree, resolve or commit or agree to take do any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentenceforegoing.
Appears in 2 contracts
Samples: Merger Agreement (STG Ugp, LLC), Merger Agreement (MSC Software Corp)
Conduct of the Company. The Company covenants and agrees that, except Except for matters (i) expressly permitted set forth in SECTION 7.1 of the Disclosure Letter or expressly as otherwise contemplated by or specifically provided in this Agreement, (ii) set forth on Part 6.01 of the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken with without the prior written consent of Parent (which shall not be unreasonably withheld, conditioned or delayed), (v) required by Applicable Law or the rules UMI and regulations of Nasdaq, MergerSub from the date hereof until the earlier of to the Effective Time and the termination of this Agreement in accordance with Article 8 hereofTime, the Company (A) shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) conduct carry on its business in the ordinary and usual course in all material respects, substantially of business and consistent with past practicepractice and shall use its reasonable best commercial efforts to (i) preserve intact its present business organization, (2ii) maintain in effect all material federal, state and local Permits that are required for the Company or any of its Subsidiaries to the extent consistent with the foregoing clause carry on its business, (1), maintain its business as a going concern and (3iii) keep available the services of its current key officers and key employees and to preserve the goodwill of and (iv) maintain satisfactory relationships with those Persons its customers, lenders, suppliers and others having material business relationships with it. Without limiting the generality of the foregoing, and except for matters set forth in SECTION 7.1 of the Disclosure Letter attached hereto or as otherwise contemplated by or specifically provided in this Agreement, without the prior written consent of UMI and MergerSub, prior to the Effective Time, the Company and its Subsidiaries, and (B) shall not, not and shall cause each of not permit its Subsidiaries not to:
(a) amend the Company’s adopt any change in its amended and restated certificate of incorporation or bylaws, bylaws or amend any certificate of incorporation or bylaws, or other comparable charter or organizational documents, of the Company’s Subsidiaries;
(b) other than with respect except pursuant to existing agreements or arrangements (i) acquire (by merger, consolidation, acquisition of stock or assets, joint venture or otherwise of a direct or indirect wholly owned Subsidiary of the Companyownership interest or investment) any corporation, (i) establish a record date for, declare, set aside partnership or pay any dividends onother business organization or division thereof, or make sell, lease or otherwise dispose of a material amount of assets (excluding sales of inventory or other assets in the ordinary course of business) or securities; (ii) waive, release, grant, or transfer any other distributions rights of material value; (iii) modify or change in any material respect any material Permit; (iv) except to refund or refinance commercial paper, incur, assume or prepay any indebtedness for borrowed money except in the ordinary course of business, consistent with past practice; (v) assume, guarantee, endorse or otherwise become liable or responsible (whether in cashdirectly, stock, property contingently or otherwise) in respect of, for any indebtedness for borrowed money or enter into any agreement with respect to the voting of, any capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), (ii) split, reverse split, combine, subdivide or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) of the Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c), issue or authorize the issuance trade payables of any other securities Person, except in respect ofthe ordinary course of business consistent with past practice; (vi) make any loans, advances or capital contributions to, or investments in, any other Person, except in lieu the ordinary course of business, consistent with past practice; (vii) authorize any capital expenditure or expenditures not in the ordinary course of business that have not been authorized and approved prior to the date hereof (other than the Company's computer upgrade currently in process) which individually or in substitution for, the aggregate is in excess of One Hundred Thousand Dollars ($100,000); (viii) pledge or otherwise encumber shares of capital stock of the Company or any of its Subsidiaries Subsidiaries; (ix) mortgage or securities convertible pledge any of its material assets, tangible or exchangeable therefor)intangible, or create or suffer to exist any material Lien thereupon; (ivx) purchase, redeem enter into any contract or otherwise acquire or offer to purchase, redeem or acquire any Company Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPP;
(c) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company Securities, other than (i) the issuance of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement or (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company;
(d) merge, consolidate or, other than in the ordinary course of business substantially consistent with past practice that would be material to the Company and its Subsidiaries, taken as a whole; or (xi) amend, modify or waive in any material respects any right under any material contract of the Company or any of its Subsidiaries;
(c) take any action that would result in any representation and warranty of the Company hereunder becoming untrue in any material respects as of the Effective Time;
(d) split, combine or reclassify any shares of, declare, set aside or pay any dividend (including, without limitation, an extraordinary dividend) or other distribution (whether in cash, stock or property or any combination thereof) in respect of Company Securities or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any Company Securities;
(e) adopt or amend any bonus, profit sharing, compensation, severance, termination, stock option, pension, retirement, deferred compensation, employment or employee benefit plan, agreement, trust, plan, fund or other arrangement for the benefit and welfare of any director, officer or employee, or increase in any manner the compensation or fringe benefits of any director, officer or any class of employees (or support any portion thereof) or pay any benefit not required by any existing plan or arrangement (including, without limitation, the granting of stock options or stock appreciation rights or the removal of existing restrictions in any benefit plans or agreements); provided, however, that notwithstanding the foregoing, the Company shall be entitled to adopt or amend any bonus, profit sharing, compensation, severance, deferred compensation, termination of employment agreement for the benefit and welfare of any individual employee (excluding officers), or increase in any manner the compensation or fringe benefits of any such employee in each case in the ordinary course of business and consistent with past practice;
(f) except as required by applicable Law or GAAP, enter into strategic alliance revalue in any material respect any of its assets, including writing down the value of inventory in any material manner or similar legal partnership write-off of notes or accounts receivable in any material manner;
(g) pay, discharge or satisfy any material claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise) other than the payment, discharge or satisfaction in the ordinary course of business, consistent with past practices, or as otherwise required by the terms thereof;
(h) make any Personmaterial Tax election or settle or compromise any material Tax liability;
(i) make any change in accounting methods, file principles or practices materially affecting the reported consolidated assets, liabilities or results of operations of the Company, except insofar as may have been required by a voluntary petition change in GAAP;
(j) authorize for bankruptcy issuance, issue, sell, deliver or liquidationagree or commit to issue, dissolvesell or deliver (whether through the issuance or granting of options, liquidatewarrants, restructure commitments, subscriptions, rights to purchase or recapitalize otherwise) any Company Securities or equity equivalents;
(k) adopt a plan or agreement of, or resolutions providing for or authorizing, of complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries;
(e) (i) increase the salary, wages, benefits, bonuses or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
(i) sell, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregate, except in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice;
(j) agree to any exclusivity, non-competition or similar provision or covenant limiting the ability of the Company or any of its Subsidiaries to compete or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organizationMerger);
(l) except for borrowings alter through merger, liquidation, reorganization, restructuring or any other fashion the corporate structure of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms ownership of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;; or
(m) make, change agree or revoke any material Tax election, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender any right commit to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;
(o) institute, settle or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than in the ordinary course of business or as contemplated by this Agreement (i) amend, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an Affiliate of the Company;
(s) voluntarily terminate, amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Act; or
(u) authorize, commit or agree to take do any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentenceforegoing.
Appears in 2 contracts
Samples: Merger Agreement (Laser Power Corp/Fa), Merger Agreement (Union Miniere S a /Fi)
Conduct of the Company. The Company covenants and agrees that, except Except for matters (i) expressly permitted or expressly contemplated by this Agreement, (ii) Agreement or as set forth on Part 6.01 in Section 7.01 of the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken except as required by Applicable Law or except with the prior written consent of Parent (which shall not be unreasonably withheld, conditioned or delayed), (v) required by Applicable Law or the rules and regulations of NasdaqParent, from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereofuntil the Effective Time, the Company (A) shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) to, conduct its business in the ordinary course in all material respectscourse, substantially consistent with past practice, and use its commercially reasonable efforts to (2i) to the extent consistent with the foregoing clause preserve intact its Intellectual Property, business organization and material assets, (1), maintain its business as a going concern and (3ii) keep available the services of its current directors, officers and key employees employees, (iii) maintain in effect all of its Governmental Authorizations and to preserve the goodwill of and (iv) maintain satisfactory relationships with those Persons customers, lenders, suppliers, licensors, licensees, distributors and others having material business relationships with the Company. Without limiting the generality of the foregoing, except for matters expressly permitted or contemplated by this Agreement, as set forth in Section 7.01 of the Company and its SubsidiariesDisclosure Schedule, and (B) or as required by Applicable Law, the Company shall not, and nor shall cause each it permit any of its Subsidiaries not to, do any of the following without the prior written consent of Parent:
(a) amend the Company’s or any of its Subsidiaries’ articles or certificate of incorporation or bylawsincorporation, or amend any certificate of incorporation or bylaws, bylaws or other comparable charter or organizational documentsdocuments (whether by merger, of the Company’s Subsidiariesconsolidation or otherwise);
(b) other than with respect to a direct or indirect wholly owned Subsidiary of the Company, (i) establish a record date for, declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock, property or otherwise) in respect of, or enter into any agreement with respect to the voting of, any capital stock of the Company or any of its Subsidiaries Subsidiaries, other than dividends and distributions by a direct or indirect wholly owned Subsidiary of the Company to its parent (except for distributions resulting from the vesting or securities convertible or exchangeable thereforexercise of Company Compensatory Awards), (ii) split, reverse split, combine, subdivide combine or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) of the Company or any of its Subsidiaries, (iii) except as expressly otherwise provided in Section 6.01(c)7.01(c) below, issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor)Subsidiaries, or (iv) purchase, redeem or otherwise acquire or offer to purchase, redeem or acquire any Company Securities or Company Subsidiary Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Company, in each case, Company in satisfaction by holders of Company Equity Compensatory Awards of the applicable exercise price and/or withholding taxes taxes, or (v) take any action that would result in accordance with the terms any amendment, modification or change of any term of any Indebtedness of the ESPPCompany or any of its Subsidiaries;
(c) (i) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, Lien or otherwise encumber or dispose of any equity interests of the Company Securities or incur any obligation to make any payments to any Person based on the price or value of any Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock pursuant to (A) upon the terms exercise of Company Equity Awards Stock Options that are outstanding on the date hereof, of this Agreement in accordance with the applicable Company Compensatory Award’s terms of such Company Equity Awards as in effect on the date of this Agreement or (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent Agreement, or (ii) the issuance amend any term of shares of any Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement Security or any Company Subsidiary Security (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company in each case, whether by merger, consolidation or another wholly owned Subsidiary of the Companyotherwise);
(d) merge, consolidate or, other than in the ordinary course of business substantially consistent with past practice, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of reorganization, each with respect to the Company or any of its Subsidiaries;
(e) (i) increase the salary, wages, benefits, bonuses make any capital expenditures or other cash compensation payable incur any obligations or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms liabilities in respect thereof in excess of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made $2,000,000 in the ordinary course of business and substantially consistent with past practice, or (D) aggregate in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereoffiscal quarter;
(f) hire, engage or terminate the employment or engagement of acquire (other than for cause, as determined by the Companyi) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property assets or capital stock of, or make any loans, advances or capital contribution to of any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise), or (ii) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, any other material assets (other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets acquired in the ordinary course of business and in amounts substantially consistent with past practice);
(ig) sell, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse Lien or otherwise dispose of any assets, properties, or Company of its Intellectual Property, material assets or material properties except (i) pursuant to Contracts or commitments as are in each case having a value in excess existence as of $500,000 individually or $5,000,000 in the aggregatedate of this Agreement, except (ii) sales of used equipment in the ordinary course of business consistent with past practice, or (iii) Permitted Liens incurred in the Company’s or its Subsidiaries’ ordinary course of business substantially consistent with past practice;
(h) (i) hire or engage any employees, consultants or contractors, or induce or encourage any employees, consultants or contractors to resign from the Company or any of its Subsidiaries, or promote any employees, or transfer any employees, or change the employment status or titles or terms of employment of any employees; or (ii) increase the salary or other compensation (of any type or form) payable or to become payable by the Company or any of its Subsidiaries to any of their employees, consultants, contractors, or advisors, or (iii) modify any existing salary, bonus, commission, severance, equity compensation or other equity arrangement or any other compensatory arrangement with any such Person (including under any profit sharing, management by objectives, incentive, gainsharing, competency or performance plan) or modify or waive any of the terms or conditions thereof or the performance or other criteria or conditions to payment or earning thereof, or (iv) reprice any right to acquire Company Securities or Company Subsidiary Securities or amend or accelerate or waive any vesting terms related to any award of, or award with respect to, any Company Securities or Company Subsidiary Securities held by any such Person, or (v) declare, pay, commit to, approve, or undertake any obligation of any other kind for the payment by the Company or any of its Subsidiaries of a bonus, commission or other additional salary, compensation or employee benefits to any such Person (including under any profit sharing, management by objectives, incentive, gainsharing, competency or performance plan);
(i) (A) write-down any of its material assets, including any Company IP, or (B) make any change in any method of financial accounting principles, method or practices, in each case except for any such change required by GAAP or Applicable Law, including Regulation S-X under the Exchange Act (in each case following consultation with the Company’s independent auditor);
(j) (A) repurchase, prepay or incur any Indebtedness, including by way of a guarantee or an issuance or sale of debt securities, or issue or sell options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, enter into any “keep well” or other Contract to maintain any financial statement or similar condition of another Person or enter into any arrangement having the economic effect of any of the foregoing (other than (i) in connection with the financing of ordinary course trade payables consistent with past practice or (ii) accounts payable in the ordinary course of business consistent with past practice), or (B) make any loans, advances or capital contributions to, or investments in, any other Person (other than (i) to the Company or any of its Subsidiaries or (ii) accounts receivable and extensions of credit in the ordinary course of business, and advances in expenses to employees, in each case in the ordinary course of business consistent with past practice);
(k) agree to any exclusivity, non-competition competition, most favored nation, or similar provision or covenant limiting restricting the ability of the Company or Company, any of its Subsidiaries to compete or engage any of their respective Affiliates from competing in any line of business, business or with any Person or in any geographic areaarea or engaging in any activity or business (including with respect to the development, manufacture, marketing or distribution of their respective products or services), or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time;
(l) enter into any Contract, exceptor relinquish or terminate any Contract or other right, in each case, any individual case with an annual value in connection excess of $1,000,000 or with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers a value over the life of the Contract in excess of $1,000,000, other than (i) entering into Software license agreements, or the renewal of any existing Software license agreements, where the Company and or any of its Subsidiaries or similar arrangements, that (x) are made is the licensor in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, entering into service or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases maintenance contracts in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between consistent with past practice pursuant to which the Company and or any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse is providing services to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereofcustomers, (iii) assumeentering into non-exclusive distribution, guarantee marketing, reselling or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit consulting agreements in the ordinary course of business, (v) amend, modify or waive any provision business consistent with past practice that provide for distribution of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver)a Company Product by a Third Party, or (viiv) other than entering into non-exclusive OEM agreements in the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreementordinary course of business consistent with past practice that are terminable without penalty within twelve months;
(mi) make, make or change or revoke any material Tax election, change any annual Tax accounting period, file adopt or change any material amended method of Tax Return accounting, amend any Tax Returns or file any material claim for Tax refunds, enter into any closing agreement or Tax ruling, enter into any Tax allocation agreement, Tax sharing agreement or Tax indemnity agreement (other than any customary commercial or financing agreements, entered into in the ordinary course of business consistent with past practices), consent to any waiver or extension with respect to any Tax Proceeding, file any Tax Return (other than an amendment to a Tax Return) in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 of the Code or (or similar provision of state, local or non-U.S. lawii) in respect of any material Tax, settle any material Tax Proceeding, or surrender any right to claim a material Tax refund, refund (including any such refund to the extent it is used to offset or other reduction in otherwise reduce Tax liability), in each case with respect to clause (ii), if such action would reasonably be expected to result in an increase in any Tax liability or consent to the surrender or any extension or waiver Tax refund of the limitations period applicable to Company or any material Tax claim or assessment outside the ordinary course of businessits Subsidiaries of more than $1,000,000;
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;
(oi) institute, pay, discharge, compromise, settle or satisfy (or agree to settle do any Proceedings, other than (iof the preceding with respect to) the settlement of any claims, liabilities or obligations (A) reserved against on the most recent balance sheet whether absolute, accrued, asserted or unasserted, contingent or otherwise), in excess of the Company included $250,000 in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) individual case, other than (x) as required by their terms as in the ordinary course of business or as contemplated by this Agreement (i) amend, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence effect on the date of this Agreement, (y) claims, liabilities or obligations reserved against on the Company Balance Sheet (for amounts not in excess of such reserves), or (z) claims, liabilities or obligations incurred since the Company Balance Sheet Date in the ordinary course of business consistent with past practice, provided that, in the case of each of (x), (y) or (z), the payment, discharge, settlement or satisfaction of such claim, liability or obligation does not include any material obligation (other than the payment of money) to be performed by the Company or any of its Subsidiaries following the Closing Date, (ii) renew waive, relinquish, release, grant, transfer or enter into assign any right with a value of more than $250,000 in any individual case except in the ordinary course of business consistent with past practice, (iii) waive any material benefits of, or agree to modify in any adverse respect, or fail to enforce, or consent to any matter with respect to which its consent is required under, any confidentiality, standstill or similar Contract to which the Company or any of its Subsidiaries is a party, or (iv) pay any fees and expenses incurred in connection with an Affiliate the transactions contemplated by this Agreement, in excess of $250,000 in the Companyaggregate;
(so) voluntarily terminateengage in (i) any trade loading practices or any other promotional sales or discount activity with any customers or distributors with any intent of accelerating to prior fiscal quarters (including the current fiscal quarter) sales to the trade or otherwise that would otherwise be expected (based on past practice) to occur in subsequent fiscal quarters, amend or fail (ii) any practice which would have the effect of accelerating to renew or preserve prior fiscal quarters (including the current fiscal quarter) collections of receivables that would otherwise be expected (based on past practice) to be made in subsequent fiscal quarters, (iii) any Company Communications License as set forth on Part 6.01(s) practice which would have the effect of postponing to subsequent fiscal quarters payments by the Company Disclosure Schedule;
or any of its Subsidiaries that would otherwise be expected (tbased on past practice) conduct to be made in prior fiscal quarters (including the current fiscal quarter) or (iv) any reduction-in-force of employees other promotional sales or other service providers or otherwise implement any layoffsdiscount activity, in each case that could implicate in clauses (i) through (iv) in a manner outside the WARN Actordinary course of business consistent with past practices;
(p) submit to the vote of the stockholders of the Company any Acquisition Proposal (whether or not a Superior Proposal) prior to the Effective Time; or
(uq) authorize, commit or agree to take any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentence.
Appears in 2 contracts
Samples: Merger Agreement (Micros Systems Inc), Merger Agreement (Oracle Corp)
Conduct of the Company. The Company covenants and agrees that, except for matters (i) expressly permitted or expressly contemplated by this Agreement, (ii) set forth on Part Section 6.01 of the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken with the prior written consent of Parent (which shall not be unreasonably withheld, conditioned or delayed; provided, that Parent shall be deemed to have approved in writing if it provides no written response within five Business Days after a written request by the Company for such approval in compliance with the terms of Section 9.01), (v) required by Applicable Law or the rules and regulations of Nasdaq, from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereof8, the Company (A) shall, and shall cause each of its Subsidiaries to to, use commercially reasonable efforts to (1) conduct its business in the ordinary course in all material respects, substantially consistent with past practice, (2) to the extent consistent with the foregoing clause (1), maintain its business as a going concern and concern, (3) keep available the services of its current officers and key employees and to preserve the goodwill of and maintain satisfactory relationships with those Persons having material business relationships with the Company and its SubsidiariesSubsidiaries and (4) preserve intact its business organization, and (B) shall not, and shall cause each of its Subsidiaries not to:
(a) amend the Company’s certificate of incorporation or bylaws, or amend any certificate of incorporation or bylaws, or other comparable charter or organizational documents, of the Company’s Subsidiaries;
(b) other than with respect to a direct or indirect wholly owned Subsidiary of the Company, (i) establish a record date for, declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock, property or otherwise) in respect of, or enter into any agreement with respect to the voting of, any capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), (ii) split, reverse split, combine, subdivide or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) of the Company or any of its Subsidiaries, or (iii) except as expressly provided in Section 6.01(c), issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), or (iv) purchase, redeem or otherwise acquire or offer to purchase, redeem or acquire any Company Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPP;
(c) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company Securities, other than (i) the issuance of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement Agreement, or (B) grants or awards of Company Securities or Company Equity Awards (x) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereofhereof or (y) as permitted by Section 6.01(c)(B)(y) of the Company Disclosure Schedule; provided that any such grants or awards are pursuant to a form of award agreement that has been made available to Parent Made Available or (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the CompanyAgreement;
(d) merge, consolidate or, other than in the ordinary course of business substantially consistent with past practice, or enter into a strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries;
(e) (i) increase the salary, wages, benefits, bonuses or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) increases required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) increases to employees below the level of Vice President due to annual increases consistent with past practice and in the ordinary course of business, (C) increases required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, Law or (D) payments permitted by Section 6.01(e)(i)(I) of the Company Disclosure Schedule; provided, that payments of cash bonuses accrued on the Company’s financial statements as of the end of the month immediately preceding the month in connection with changes to benefits which the Closing occurs (the “Accrued Cash Bonuses”) shall not, except as part set forth in Section 6.01(e)(i)(II) of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of businessCompany Disclosure Schedule, and be deemed restricted by this Section 6.01, or (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof; provided that, for the avoidance of doubt, in no event shall the Company or any of its Subsidiaries enter into or adopt any new agreement or arrangement which, in the event of a change of control of the Company, accelerates or increases any cash, equity award or other benefit payable or to become payable to any of their employees, officers, directors or Independent Contractors;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) (i) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000200,000 or (ii) any officer;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that), individually involve a purchase price or principal amount in each case, in excess of not more than $500,000 250,000 individually or $2,000,000 500,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
(i) sell, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregate, except in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice;
(j) agree to any exclusivity, non-competition or similar provision or covenant limiting the ability of the Company or any of its Subsidiaries to compete or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 500,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), ) or (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than (A) capital contributions and loans to any wholly owned Subsidiary, and (B) extensions of trade credit in the ordinary course of business, (vC) amendadvances to directors, modify officers and other employees for travel and other business-related expenses, in each case, in the ordinary course of business and in compliance in all material respects with the Company’s policies related thereto, (D) obligations incurred pursuant to business credit cards in the ordinary course of business and (E) advancement or waive any provision indemnification of expenses and losses incurred by current or former directors or officers of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof Company and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and its Subsidiaries required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate certificate of incorporation or refinance any Indebtedness arising under bylaws of the Existing Credit AgreementCompany as in effect on the date hereof or indemnification agreements that have been Made Available;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make effect any commitment with respect extraordinary transactions that would result in Tax liability to capital expenditures the Company or its Subsidiaries in a Taxable period (or portion thereof) beginning after the Closing Date that is materially in excess of Tax liability associated with the amounts conduct of their business in the ordinary course consistent with past practice;
(o) other than as set forth in Part 6.01(n)(ithe capital expenditure budget set forth on Section 6.01(o)(i) of the Company Disclosure Schedule, make, authorize, or make any commitment with respect to, any single capital expenditures that is in excess of $250,000 or capital expenditures that are in the aggregate in excess of $500,000 for the Company or any of its Subsidiaries, or (ii) enter into any lease of personal property or any renewals thereof in excess of $500,000 except in the ordinary course of business substantially consistent with past practice;
(op) instituteinstitute (other than (x) the institution of any Proceeding as a result of a Proceeding commenced against the Company or any of its Subsidiaries or (y) Proceedings for the collection of accounts receivable in the ordinary course of business), settle or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (Bi) involving payments of less than $500,000 250,000 individually or $1,000,000 500,000 in the aggregate, (ii) reflected or reserved against in the Company Balance Sheet or (iii) settled in compliance with Section 6.13; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Subbusiness;
(pq) enter into any material new line of business;
(qr) fail to maintain in all material respects any Insurance Policies, it being understood that the Company and its Subsidiaries may enter into revised insurance provisions or obtain replacement insurance policies that provide insurance coverage substantially consistent with the Insurance Policies currently in effect;
(rs) other than in the ordinary course of business or as contemplated by this Agreement (i) amend, materially amend or modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, except for Contracts contemplated by Section 4.14(a)(ii) or (iii) in the ordinary course of business, or (ii) renew or enter into any Contract with an Affiliate of the Company;
(s) voluntarily terminate, amend or fail to renew or preserve any a Company Communications License as set forth on Part 6.01(s) of the Company Disclosure ScheduleRelated Party;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could would implicate the WARN Act; or
(u) authorize, commit or agree to take any of the foregoing actions. Notwithstanding anything set forth the foregoing, nothing contained in this Agreement shall give to Parent or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shallSub, directly or indirectly, exercise any form rights to control or direct the operations of the Company and its Subsidiaries prior to the Effective Time. Prior to the Effective Time, without limiting or modifying the restrictions set forth in this Section 6.01, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over the Company, any of its subsidiaries, or any operations of the Governmental Permits, within the meaning of the FCC Rules Company and the FCC’s orders and other published rulings thereunderits Subsidiaries. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentence.
Appears in 2 contracts
Samples: Merger Agreement (DSP Group Inc /De/), Merger Agreement (DSP Group Inc /De/)
Conduct of the Company. The Except as set forth in Section 6.01 of the Company covenants and agrees that, except for matters (i) expressly permitted Disclosure Schedule or expressly in connection with the transactions contemplated by this Agreement, (ii) from the date hereof until the Effective Time, the Company shall, and shall cause its Subsidiaries to, conduct its businesses in the ordinary course consistent with past practice and shall use commercially reasonable efforts to preserve intact their current business organizations and relationships with Third Parties and to keep available the services of their present officers and employees. Without limiting the generality of the foregoing, other than as set forth on Part in Section 6.01 of the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken with the prior written consent of Parent (which shall not be unreasonably withheld, conditioned or delayed), (v) required by Applicable Law or the rules and regulations of Nasdaq, from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereofTime, the Company (A) shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) conduct its business in the ordinary course in all material respects, substantially consistent with past practice, (2) to the extent consistent with the foregoing clause (1), maintain its business as a going concern and (3) keep available the services of its current officers and key employees and to preserve the goodwill of and maintain satisfactory relationships with those Persons having material business relationships with the Company and its Subsidiaries, and (B) shall not, and shall cause each of its Subsidiaries not to, without Parent's prior written consent:
(a) amend the Company’s certificate amend, adopt or propose any change to its articles of incorporation or bylaws, or amend any certificate of incorporation or bylaws, bylaws or other comparable charter or organizational documents, of the Company’s Subsidiaries;
(b) other than with respect to a direct or indirect wholly owned Subsidiary of the Company, (i) establish a record date for, declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stockstock or property), property or otherwise) in respect of, or enter into any agreement with respect to the voting of, any of its capital stock of (other than to the Company or any a wholly owned Subsidiary of its Subsidiaries (or securities convertible or exchangeable thereforthe Company), (ii) split, reverse split, combine, subdivide combine or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) of the Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c), capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution forfor shares of its capital stock (other than the issuance of shares of Common Stock upon the exercise of options to purchase shares of Common Stock outstanding on the date of this Agreement and in accordance with their present terms) or (iii) purchase, redeem or otherwise acquire any shares of capital stock of the Company or any of its Subsidiaries (or any other securities convertible thereof or exchangeable therefor)any rights, warrants or (iv) purchase, redeem or otherwise acquire or offer options to purchase, redeem or acquire any Company Securities, except for the net settlement of Company Equity Awards such shares or acquisitions of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPPother securities;
(c) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, pledge or otherwise encumber any shares of its capital stock, any other securities or dispose any securities convertible into, or any rights, warrants, options, calls, conversion rights, stock appreciation rights, redemption rights, repurchase rights, preemptive rights, subscriptions or other rights, enter into any commitments, agreements, arrangements or undertakings of any equity interests kind to acquire, any securities of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company Securities, (other than (i) the issuance of shares of Company Common Stock pursuant to (A) upon the terms exercise of Company Equity Awards that are Stock Options outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement or (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company;
(d) merge, consolidate or, other than in the ordinary course of business substantially consistent with past practice, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries;
(e) (i) increase the salary, wages, benefits, bonuses or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
(i) sell, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregate, except in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice;
(j) agree to any exclusivity, non-competition or similar provision or covenant limiting the ability of the Company or any of its Subsidiaries to compete or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (in accordance with their present terms or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings granting of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse options to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution acquire Common Stock pursuant to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of existing contractual obligations shown on Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i4.05(b) of the Company Disclosure Schedule);
(o) institute, settle or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than in the ordinary course of business or as contemplated by this Agreement (i) amend, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an Affiliate of the Company;
(s) voluntarily terminate, amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Act; or
(u) authorize, commit or agree to take any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentence.
Appears in 2 contracts
Samples: Merger Agreement (Sylvan Inc), Merger Agreement (Sylvan Inc)
Conduct of the Company. The (a) From the date hereof until the Closing Date, the Company covenants shall conduct its and agrees that, except for matters the Subsidiaries’ businesses in the ordinary course of business consistent with past practice and use its commercially reasonable efforts to (i) expressly permitted or expressly contemplated by this Agreementpreserve intact its present business organization and (ii) maintain relationships with its customers, lenders, suppliers and others having material business relationships with it.
(b) Without limiting the generality of the foregoing, except (i) as set forth in Section 5.01 of the Company Disclosure Schedules, (ii) set forth on Part 6.01 as required to comply with Applicable Law, GAAP or the provisions of the Company Disclosure Schedule, this Agreement or (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken with the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed), (v) required by Applicable Law or the rules and regulations of Nasdaq, from the date hereof until the earlier of the Effective Time Closing Date and the termination of this Agreement in accordance with Article 8 hereof, the Company (A) shall, shall not and shall cause each not permit any of its the Subsidiaries to use commercially reasonable efforts to (1) conduct its business in the ordinary course in all material respects, substantially consistent with past practice, (2) to the extent consistent with the foregoing clause (1), maintain its business as a going concern and (3) keep available the services of its current officers and key employees and to preserve the goodwill of and maintain satisfactory relationships with those Persons having material business relationships with the Company and its Subsidiaries, and (B) shall not, and shall cause each of its Subsidiaries not to:
(ai) amend adopt or propose any change in the Company’s certificate of incorporation or bylaws, bylaws or amend any certificate of incorporation or bylaws, or other comparable charter or similar organizational documents, documents of the Company’s SubsidiariesCompany or any Subsidiary (whether by merger, consolidation or otherwise);
(bii) other than with respect to a direct (A) split, combine or indirect wholly owned Subsidiary reclassify any shares of the CompanyCommon Stock or capital stock of any Subsidiary, (iB) establish a record date for, declare, set aside or pay any dividends on, dividend or make any other distributions distribution (whether in cash, stock, stock or property or otherwiseany combination thereof) in respect of, of the Common Stock or enter into any agreement with respect to the voting of, any capital stock of any Subsidiary (other than dividends paid by any Subsidiary to the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), (ii) split, reverse split, combine, subdivide or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) of the Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c), issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable thereforanother wholly-owned Subsidiary), or (ivC) purchaseredeem, redeem repurchase or otherwise acquire or offer to purchaseredeem, redeem repurchase, or otherwise acquire any Company Securities or any Subsidiary Securities;
(iii) (A) transfer, except for issue, pledge, deliver or sell, assign or authorize the net settlement of Company Equity Awards issuance, delivery or acquisitions of sale of, or otherwise dispose of, any shares of any Company Common Stock by Securities (other than in connection with the Companyexercise of any Option) or Subsidiary Securities or the right to receive distributions thereon, or (B) amend any term of any Company Security or any Subsidiary Security (in each case, in satisfaction whether by holders of Company Equity Awards of the applicable withholding taxes merger, consolidation or in accordance with the terms of the ESPPotherwise);
(civ) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber or dispose of any equity interests of the Company or incur any obligation commit to make any payments to capital expenditures following the Closing or any Person based on obligations, liabilities or commitments in respect thereof exceeding $250,000 for any individual project or $500,000 in the price or value of any Company Securities, other than (i) the issuance of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement or (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Companyaggregate;
(dv) mergemerge or consolidate with any other Person or acquire (whether by merger, consolidate orconsolidation, acquisition of stock or assets or otherwise), directly or indirectly, any assets, securities, properties, interests or businesses (or division thereof) other than the acquisition of assets or inventory in the ordinary course of business substantially consistent with past practice, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of and its Subsidiaries;
(evi) (i) increase the salary, wages, benefits, bonuses or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) than in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required actions permitted by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits underSection 5.01(b)(iv), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to contributions to, or investments in, any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practicePerson;
(ivii) sell, assign, lease, license, pledge, transfer, abandon, subject to enter into any Lien, permit to lapse agreement or arrangement that limits or otherwise dispose restricts the Company, any Subsidiary or any of their respective Affiliates or any assetssuccessor thereto from engaging or competing in any line of business, propertiesin any location or with any Person;
(viii) materially amend, materially modify or Company Intellectual Propertyterminate any Material Contract (other than Contracts with third-party managers and expiration in accordance with the terms thereof) or enter or commit to enter into any Contract that would be a Material Contract required to be disclosed pursuant to Section 3.10 (other than clause (v) of Section 3.10(a)) if entered into prior to the execution of this Agreement, except in each case having a value in excess for renewals of $500,000 individually or $5,000,000 in Material Contracts with substantially similar terms as the aggregate, except in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practiceexisting Material Contact;
(jix) agree cancel, compromise, waive or settle, or offer or propose to cancel, compromise, waive or settle, (A) any exclusivitymaterial Proceeding or other claim against the Company or any Subsidiary, non-competition (B) any stockholder litigation or similar provision or covenant limiting the ability of stockholder dispute against the Company or any of its Subsidiaries officers or directors or (C) any Proceeding or dispute that relates to compete or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates transactions contemplated hereby (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organizationaction with respect to Dissenting Shares in accordance with Section 2.08);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (ivx) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file adopt or change any material amended method of Tax Return or file any material Tax Return in a manner inconsistent with past practiceaccounting, enter into any “closing agreement” within the meaning of Section 7121 of the Code (agreement with a Taxing Authority, or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceedingclaim, surrender any right to claim a material Tax refund, offset audit or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of businessassessment;
(nxi) make other than as required by the terms of any commitment with respect Employee Plan as in effect on the date of this Agreement or Applicable Law, (i) grant or increase any severance, retention or termination pay to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) any employee of the Company Disclosure Schedule;
or any Subsidiary (o) instituteor amend any existing severance, settle retention or agree to settle any Proceedingstermination pay arrangement), other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent establish, adopt, amend or Merger Sub arising out of terminate any Employee Plan or establish or adopt a breach plan, agreement or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than in the ordinary course of business or as contemplated by this Agreement (i) amend, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract arrangement that would have been a Material Contract if an Employee Plan had it been in existence effect on the date of this Agreement, (iii) grant equity or (ii) renew or enter into equity-based awards to any Contract with an Affiliate employee of the Company;
(s) voluntarily terminate, amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Act; or
(u) authorize, commit or agree to take any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary or (iv) increase compensation, bonus or other benefits payable to any director or employee of the Company or any Subsidiary, other than increases in the ordinary course of business consistent with past practice;
(including xii) adopt a plan of or consummate a complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization or filing of a petition in bankruptcy under any COVID-19 Measuresprovisions of federal or state bankruptcy law or consent to the filing of any bankruptcy petition against it under any similar law;
(xiii) change any method of accounting or accounting practice of the Company or any Subsidiary, except for changes that are (A) required by GAAP or Applicable Law or (yB) respond to third-party supply or service disruptions caused made by the coronavirus Company’s ultimate parent on a company-wide basis;
(COVID-19xiv) pandemic; provided that (A) waive or abandon or otherwise dispose of any material Intellectual Property Rights of the Company shallor any Subsidiary or (B) sell, transfer, lease, license, convey or otherwise dispose of any material assets of the Company or any Subsidiary;
(xv) (A) hire or otherwise enter into any employment or independent contractor or individual consulting agreement or arrangement with any Person providing for base salary or base fees, on an annualized basis, in excess of $200,000 or terminate any employee, independent contractor or individual consultant whose base salary or base fees exceeds, on an annualized basis, $200,000 or (B) enter into any collective bargaining agreement with any labor organization;
(xvi) cancel, reduce or fail to maintain insurance coverage currently applicable to the extent legally permissible and only if time permitsCompany or any Subsidiary, consult except in for renewals or replacements of insurance coverage with Parent prior substantially similar terms as the existing coverage; or
(xvii) agree, resolve or commit to taking do any of the actions described foregoing set forth in this sentenceclauses (i) through (xvi).
Appears in 2 contracts
Samples: Merger Agreement (Actua Corp), Merger Agreement (Envestnet, Inc.)
Conduct of the Company. The Company covenants and agrees that, except for matters Except (i) expressly permitted or expressly contemplated by this Agreement, (ii) set forth on Part 6.01 of the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken with the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed), (vii) as expressly permitted or required by this Agreement, (iii) as set forth in Section 6.01 of the Company Disclosure Schedule or (iv) as required by Applicable Law or the rules and regulations of Nasdaq, from the date hereof until the earlier of the Effective Time and or the termination of this Agreement in accordance with Article 8 hereofits terms, the Company (A) shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) to, conduct its business in the ordinary course in all material respects, substantially consistent with past practice, (2) and, to the extent consistent with the foregoing clause therewith and permitted hereby, use commercially reasonable efforts to (1), a) maintain its properties and assets in good operating condition and repair, subject to normal wear and tear and natural obsolescence, (b) preserve intact its current business as a going concern organization and relationships with customers, suppliers and other Persons with whom the Company or its Subsidiaries have material business relationships, (3c) keep available the services of its current present officers and key employees and to preserve the goodwill of and maintain satisfactory relationships with those Persons having material business relationships with the Company and its Subsidiariesemployees, and (Bd) maintain an average of month-end Cash and Cash Equivalents for the three month period prior to the Closing Date in excess of US$424,000,000. Without limiting the generality of the foregoing, except (i) with the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed), (ii) as expressly permitted or required by this Agreement, (iii) as set forth in Section 6.01 of the Company Disclosure Schedule or (iv) as required by Applicable Law, from the date hereof until the Effective Time or the termination of this Agreement in accordance with its terms, the Company shall not, and nor shall cause each it permit any of its Subsidiaries not to:
(a) amend its Organizational Documents, except with respect to the Company’s certificate wholly-owned Subsidiaries in the ordinary course of incorporation or bylaws, or amend any certificate of incorporation or bylaws, or other comparable charter or organizational documents, of the Company’s Subsidiariesbusiness;
(b) other than with respect to adopt a direct plan or indirect wholly owned Subsidiary agreement of the Companycomplete or partial liquidation, (i) establish a record date for, declare, set aside winding up or pay any dividends on, or make any other distributions (whether in cash, stock, property or otherwise) in respect of, or enter into any agreement with respect to the voting of, any capital stock dissolution of the Company or any of its Subsidiaries (or securities convertible commence any proceeding for the voluntary liquidation, winding up or exchangeable therefor), (ii) split, reverse split, combine, subdivide or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) bankruptcy of the Company or any of its Subsidiaries, other than internal reorganizations of Subsidiaries for tax planning or cost-rationalization purposes in the ordinary course of business or with respect to dormant, non-operating Subsidiaries;
(iiic) split, combine, subdivide or reclassify any shares of its capital stock, except as expressly provided in Section 6.01(c)for any such transaction by a wholly-owned Subsidiary of the Company which remains a wholly-owned Subsidiary after consummation of such transaction;
(d) declare, issue set aside for payment or authorize the issuance of pay any dividend on, or make any other securities distribution (whether in cash, stock or property or any combination thereof) in respect of, in lieu of or in substitution for, shares of its capital stock or equity interests or otherwise make any payments to its stockholders or other equity-holders in their capacity as such, other than dividends by any of its Subsidiaries to the Company or any of its Subsidiaries the Company’s wholly-owned Subsidiaries;
(or securities convertible or exchangeable therefor)e) redeem, or (iv) purchase, redeem repurchase or otherwise acquire or offer to purchaseredeem, redeem repurchase, or otherwise acquire any Company Securities, except for the net settlement of Company Equity Awards Securities or acquisitions of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPP;
(c) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company Subsidiary Securities, other than (i) the issuance withholding of shares of Company Common Stock to satisfy tax obligations with respect to awards granted pursuant to (A) the terms of Company Equity Awards Stock Plans that are outstanding on the date hereofof this Agreement, (ii) the acquisition by the Company of Company Stock Options, Company Restricted Shares and Company RSUs in accordance connection with the applicable terms forfeiture of such Company Equity Awards awards or (iii) as contemplated by any applicable Employee Plan as in effect on the date of this Agreement Agreement;
(f) issue, deliver, grant or (B) grants sell, or awards authorize the issuance, delivery, grant or sale of, any shares of any Company Securities or Company Equity Awards Subsidiary Securities, or amend any term of any Company Security or any Company Subsidiary Security, other than the issuance of (i) any shares of the Company Stock upon the exercise of Company Stock Options, vesting of Company Restricted Shares or settlement of Company RSUs that are outstanding on the date of this Agreement, in each case in accordance with their terms on the date of this Agreement, (ii) as required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements by any Employee Plan as in effect as on the date of this Agreement, (iii) Company Stock Options, Company Restricted Shares or Company RSUs (or cash equivalent awards) to employees hired after the date hereof; provided that such grants , to employees in the context of promotions based on job performance or awards are pursuant workplace requirements or to employees as part of the Company’s annual grant process, in each case in a form of award agreement that has been made available to Parent or (iimanner consistent with past practice and in an aggregate amount no more than the amount set forth on Section 6.01(f) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company Disclosure Schedule or (iv) any Company Subsidiary Securities to the Company or another wholly any other wholly-owned Subsidiary of the Company;
(dg) mergeauthorize or make, consolidate oror make any commitment with respect to, any single capital expenditure in excess of US$25,000,000 or capital expenditures in excess of US$100,000,000 in the aggregate, except for capital expenditures that are contemplated by the Company’s capital expenditures forecast set forth on Section 6.01(g) of the Company Disclosure Schedule;
(h) acquire (by merger, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, any amount of assets, securities, properties, interests or businesses in any single transaction in excess of US$25,000,000 or in excess of US$100,000,000 in the aggregate, other than (i) pursuant to existing contracts or commitments, (ii) pursuant to the proposals set forth on Section 6.01(h) of the Company Disclosure Schedule or (iii) in accordance with any other subsection of this Section 6.01 or (iv) acquisitions of inventory and supplies in the ordinary course of business substantially consistent with past practice, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries;
(e) (i) increase the salary, wages, benefits, bonuses or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
(i) sell, assignlease or otherwise transfer (by merger or otherwise), leaselicense out, license, or pledge, transfer, abandon, subject to any Lien, permit to lapse mortgage or otherwise dispose encumber, any of any its or its Subsidiaries’ assets, securities, properties, interests or businesses if the amount of consideration paid or transferred to the Company Intellectual Property, in each case having a value in excess of $500,000 or its Subsidiaries would exceed US$25,000,000 individually or $5,000,000 in the aggregate, except other than (i) pursuant to existing contracts, proposals or commitments set forth in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice;
(jSection 6.01(i) agree to any exclusivity, non-competition or similar provision or covenant limiting the ability of the Company Disclosure Schedule or any for transactions permitted by Section 6.01(h), (ii) sales of its Subsidiaries to compete inventory or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made obsolete equipment in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;
(o) institute, settle or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than in the ordinary course of business or as contemplated by this Agreement (i) amend, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an Affiliate of the Company;
(s) voluntarily terminate, amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Act; or
(u) authorize, commit or agree to take any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentence.,
Appears in 2 contracts
Samples: Merger Agreement, Merger Agreement (Ingram Micro Inc)
Conduct of the Company. The Company covenants and agrees thatFrom the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement in accordance with ARTICLE 10 (the “Pre-Closing Period”), except for matters (i) expressly permitted or as expressly contemplated by this Agreement, (ii) as set forth on Part in Section 6.01 of the Company Disclosure ScheduleLetter, (iii) reasonably undertaken as consented to in connection with any COVID-19 Measures, (iv) undertaken with the prior written consent of writing by Parent (which shall such consent not to be unreasonably withheld, conditioned or delayed), (v) or as required by Applicable applicable Law or the rules and regulations of Nasdaq, from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereofOrder, the Company (A) shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) to, conduct its business in the ordinary course in all material respects, substantially consistent with past practicepractice and, (2) to the extent consistent with the foregoing clause foregoing, use reasonable best efforts to (1), maintain i) preserve intact its business as a going concern organization, goodwill and reputation, (ii) preserve in all material respects its business relationships with its customers, lenders, suppliers, licensors, licensees, distributors and others having business relationships with it and with Governmental Authorities with jurisdiction over the Company’s operations and (3iii) keep available the services of its current officers and key employees and to preserve employees. In addition, without limiting the goodwill generality of and maintain satisfactory relationships with those Persons having material business relationships with the foregoing, during the Pre-Closing Period, except as expressly contemplated by this Agreement, as set forth in Section 6.01 of the Company and its SubsidiariesDisclosure Letter, and as consented to in writing by Parent (Bsuch consent not to be unreasonably withheld, conditioned or delayed) or as required by applicable Law or Order, the Company shall not, and nor shall cause each it permit any of its Subsidiaries not to:
(a) amend the Company’s certificate of incorporation or bylawsincorporation, or amend any certificate of incorporation or bylaws, bylaws or other comparable charter similar organizational documents (whether by merger, consolidation or organizational documentsotherwise), in each case, of the Company or any Subsidiary of the Company’s Subsidiaries;
(b) other than with respect to a direct directly or indirect wholly owned Subsidiary indirectly split, combine or reclassify any shares of the Company, (i) establish a record date for, declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock, property or otherwise) in respect of, or enter into any agreement with respect to the voting of, any capital stock of the Company or any of its Subsidiaries or declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of the capital stock of the Company or its Subsidiaries, or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any Company Securities or any Company Subsidiary Securities, except for (i) the declaration, setting aside or payment of any dividends or other distributions by any of its wholly owned Subsidiaries or (ii) acquisitions, or deemed acquisitions, of Shares in connection with (A) the payment of the exercise price of Company Stock Options with Company Stock Options or Shares (including in connection with “net exercises”) and (B) required Tax withholding in connection with the exercise of Company Stock Options, in each case to the extent such Company Stock Options are outstanding on the date of this Agreement and in accordance with their applicable terms on the date of this Agreement;
(c) (i) issue, deliver or sell, or authorize the issuance, delivery or sale of, any Company Securities or Company Subsidiary Securities or any securities convertible into or exchangeable thereforor exercisable for Company Securities or Company Subsidiary Securities, other than (x) the issuance of any Shares upon the exercise of Company Stock Options that are outstanding on the date of this Agreement in accordance with their applicable terms thereof on the date of this Agreement and (y) the issuance, delivery or sale of any shares of Company Subsidiary Securities to the Company or any of its wholly owned Subsidiaries or (ii) amend any term of any Company Security or Company Subsidiary Security (in each case, whether by merger, consolidation or otherwise);
(d) incur or commit to any capital expenditures, except for those as may be contemplated by the Company’s fiscal 2015 budget and capital expenditure plan made available to Parent prior to the date of this Agreement (whether or not such capital expenditures are made during the 2015 fiscal year);
(e) acquire (by merger, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, any assets, securities, properties, interests or businesses, other than (i) supplies and materials in the ordinary course of business of the Company and its Subsidiaries in a manner that is consistent with past practice, (ii) pursuant to Contracts in effect on the date of this Agreement or (iii) assets, securities, properties, interests or businesses of the Company or any of its wholly owned Subsidiaries;
(f) sell, license, lease or otherwise transfer, exchange, swap dispose of or abandon or create or incur any Lien on, directly or indirectly, any of the Company’s or its Subsidiaries’ assets, securities, properties, interests, leases or businesses, other than (i) sales of inventory or obsolete equipment in the ordinary course of business consistent with past practice, (ii) sales, leases or transfers that are pursuant to Contracts in effect on the date of this Agreement, which Contracts are set forth on Section 6.01(f) of the Company Disclosure Letter, (iii) Permitted Liens, or (iv) sales, licenses, leases or other transfers to, or Liens in favor of, the Company or any of its wholly owned Subsidiaries in the ordinary course of business and consistent with past practice;
(g) other than in connection with actions permitted by Sections 6.01(d) or (e), make any loans, advances or capital contributions to, or investments in, any other Person, or form or acquire any Subsidiary that is not wholly owned by the Company or any of its wholly owned Subsidiaries, other than loans, advances or capital contributions to, or investments in, the Company or any of its wholly owned Subsidiaries in the ordinary course of business and consistent with past practice;
(h) redeem, repurchase, prepay (other than prepayments of revolving loans in the ordinary course of business), defease, incur, assume, endorse, guarantee or otherwise become liable for or modify in any material respect the terms of any indebtedness for borrowed money or guarantees thereof in a manner that increases the aggregate liability (including any contingent liability) of the Company or any Subsidiary thereunder, or issue or sell any debt securities, except for indebtedness or guarantees between or among the Company and any of its wholly owned Subsidiaries in the ordinary course of business and consistent with past practice;
(i) enter into any agreement or arrangement that limits or otherwise restricts in any material respect the Company or any of its Subsidiaries from engaging or competing in any line of business, in any location or with any Person, or would purport to limit, after the Effective Time, Parent or any of its Subsidiaries in any material respect;
(j) enter into any new line of business outside of the existing business of the Company and its Subsidiaries;
(k) (i) other than (x) in the ordinary course of business (including renewals consistent with the terms thereof) or (y) in a manner not material to the Company and its Subsidiaries, taken as a whole, amend or modify in any material respect or terminate (excluding terminations or renewals upon expiration of the term thereof in accordance with the terms thereof) any Company Material Contract or Real Property Lease or waive, release or assign any material rights, claims or benefits under any Company Material Contract or Real Property Lease, or (ii) enter into any Contract that would have been a Company Material Contract had it been entered into prior to the date of this Agreement or enter into any new Real Property Lease;
(i) recognize any new labor organization, union, employee association, trade union, works council or other similar employee representative, or (ii) negotiate, enter into, amend, modify or terminate any Collective Bargaining Agreement;
(m) grant any equity or equity-based awards (including Company Stock Options or restricted shares of Company Stock);
(n) except (x) as required pursuant to a Company Plan or a Contract in effect prior to the date of this Agreement, (y) as otherwise required by applicable Law, or (z) as otherwise contemplated by this Agreement or as set forth on the Company Disclosure Letter, (i) grant or provide any severance or termination payments or benefits to any current or former employee, officer, non-employee director, independent contractor or consultant of the Company or any of its Subsidiaries (including any obligation to gross-up, indemnify or otherwise reimburse any such individual for any Tax incurred by any such individual, including under Section 409A or 4999 of the Code), (ii) splitaccelerate the time of payment or vesting of, reverse splitor the lapsing of restrictions with respect to, combine, subdivide or reclassify fund or otherwise amend secure the terms of payment of, any capital stock (compensation or securities convertible benefits to any current or exchangeable therefor) former employee, officer, non-employee director, independent contractor or consultant of the Company or any of its Subsidiaries, (iii) except increase the compensation payable to any current or former employee, officer, non-employee director, independent contractor or consultant of the Company or any of its Subsidiaries, other than (A) increases in base salaries or hourly base wage rates, as expressly provided applicable, to employees in Section 6.01(c)the ordinary course of business consistent with past practice and (B) awards of bonuses in the ordinary course of business consistent with past practice, issue (iv) establish, adopt, terminate or authorize amend any material Company Plan or any plan, program, arrangement, policy or agreement that would be a material Company Plan if it were in existence on the issuance date of this Agreement, (v) hire any other securities in respect of, in lieu of or in substitution for, shares of capital stock employee of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), or (iv) purchase, redeem or otherwise acquire or offer engage any other individual to purchase, redeem or acquire any Company Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPP;
(c) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company Securities, other than (i) the issuance of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement or (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company provide services to the Company or another wholly owned Subsidiary any of the Company;
(d) merge, consolidate orits Subsidiaries, other than in the ordinary course of business substantially consistent with past practice; (vi) terminate the employment of any current employee with a title of Vice President or above or the engagement of any individual independent contractor of the Company or any of its Subsidiaries other than for cause or for performance-related reasons or (vii) promote any employee of the Company or any of its Subsidiaries to a position that reports directly to the Chief Executive Officer of the Company;
(o) waive, enter into strategic alliance release, limit or similar legal partnership condition any restrictive covenant obligation of any current or former employee or independent contractor of the Company or any of its Subsidiaries in a manner that would reasonably be expected to adversely affect the business of the Company and its Subsidiaries, taken as a whole;
(p) change the Company’s methods of financial accounting, except as required by concurrent changes in GAAP or in Regulation S-X of the Exchange Act (or any interpretation thereof), any Governmental Authority or applicable Law;
(q) (i) make or change any material election with respect to Taxes, (ii) adopt or change any Personmethod of Tax accounting, file a voluntary petition (iii) amend any material Tax Return, (iv) agree or settle any material claim or assessment in respect of Taxes, (v) agree to an extension or waiver of the limitation period for bankruptcy any material claim or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement ofassessment in respect of Taxes, or resolutions providing for (vi) take or authorizingomit to take any other action with respect to Taxes, complete in each case, if any such action or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization omission would have the effect of materially increasing the Tax liability or other reorganization accrual of Tax liability under FASB Interpretation No. 48 or materially reducing any Tax asset or accrual of Tax asset under FASB Interpretation No. 48 of the Company or any of its Subsidiaries;
(er) (i) increase compromise or settle any Proceeding, in each case made or pending by or against the salaryCompany or any of its Subsidiaries (for the avoidance of doubt, wagesincluding any compromise or settlement with respect to matters in which any of them is a plaintiff), benefits, bonuses or other cash compensation payable or to become payable to the Company’s any of their employees, officersofficers or directors in their capacities as such, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required by the terms compromise or settlement of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend Proceedings that: (including by accelerating the vesting, payment or funding x) are for an amount (in excess of any benefits underinsurance proceeds), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one equal to $250,000, (y) do not involve an admission of guilt or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment impose any injunctive relief or similar assets in a material restriction on the ordinary course of business and in amounts substantially consistent with past practice;
(i) sell, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregate, except in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice;
Subsidiaries and (jz) agree to any exclusivity, non-competition or similar provision or covenant limiting the ability do not involve material Intellectual Property Rights of the Company or any of its Subsidiaries to compete or engage in (ii) commence any line of businessProceeding, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made other than in the ordinary course of business substantially consistent with past practice;
(s) take any actions or intentionally omit to take any actions required to be taken hereunder, in each case that would or would be reasonably likely to (i) result in any of the conditions set forth in ARTICLE 10 or any of the Offer Conditions not being satisfied, (yii) are on result in new or additional required approvals from any Governmental Authority in connection with the Transactions that would materially delay the consummation of the Transactions or (iii) materially impair the ability of Parent, the Company or Merger Sub to consummate the Transactions in accordance with the terms substantially similar to any such restrictions existing on the date of this Agreement or materially delay such consummation;
(t) fail to pay any maintenance and (z) would not have similar fees or fail to take any such effect (other appropriate actions as necessary to prevent the abandonment, loss or otherwise restrict impairment of any Intellectual Property Rights owned or bind) on Parent licensed by the Company or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes Subsidiaries that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under material to the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries conduct of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of ’s business;
(nu) make authorize, apply for or cause to be approved the listing of Shares on any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedulestock exchange;
(ov) institutecancel, settle terminate, fail to keep in place or agree to settle reduce the amount of any Proceedings, other than insurance coverage provided by existing insurance policies without obtaining substantially equivalent (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) substitute insurance coverage, other than in the ordinary course of business or as contemplated by this Agreement if the Company, in its reasonable judgment, determines that such cancellation, termination or failure to keep in place would not result in the Company and its Subsidiaries having inadequate coverage, including after giving effect to any insured self-retention or co-insurance feature;
(iw) amendadopt or publicly propose a plan of complete or partial liquidation or resolutions providing for or authorizing such a liquidation or a dissolution, modifyin each case, renew of the Company or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an Affiliate material Subsidiary of the Company;
(sx) voluntarily terminate, amend or fail to renew or preserve acquire any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Scheduleinterest in real property;
(ty) conduct enter into any reductionmaterial interest rate swaps, non-in-force of employees U.S. exchange or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Actsimilar hedging arrangements other than for purposes of offsetting a bona fide exposure (including counterparty risk); or
(uz) authorizeagree, resolve or commit or agree to take do any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentenceforegoing.
Appears in 2 contracts
Samples: Merger Agreement (Mitel Networks Corp), Merger Agreement (Mavenir Systems Inc)
Conduct of the Company. The Company covenants and agrees thatthat from the date hereof until the Effective Time, except for matters (i) expressly permitted or expressly contemplated by this Agreement, (ii) set forth on Part 6.01 of the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken with the prior written consent of Parent (which Parent, the Company and its subsidiaries shall not be unreasonably withheld, conditioned or delayed), (v) required by Applicable Law or conduct their business in the rules ordinary course consistent with past practice and regulations shall use their reasonable best efforts to preserve intact their business organizations and relationships with third parties and to keep available the services of Nasdaqtheir present officers and employees. Without limiting the generality of the foregoing, from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8 hereof, the Company (A) shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) conduct its business in the ordinary course in all material respects, substantially consistent with past practice, (2) to the extent consistent with the foregoing clause (1), maintain its business as a going concern and (3) keep available the services of its current officers and key employees and to preserve the goodwill of and maintain satisfactory relationships with those Persons having material business relationships with the Company and its Subsidiaries, and (B) shall not, and shall cause each of its Subsidiaries not toTime:
(a) amend the Company’s Company will not adopt or propose any change in its certificate of incorporation or bylaws, or amend any certificate of incorporation or bylaws, or other comparable charter or organizational documents, of the Company’s Subsidiaries;
(b) other than with respect to a direct or indirect wholly owned Subsidiary of the Company, (i) establish a record date for, declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock, property or otherwise) in respect of, or enter into any agreement with respect to the voting of, any capital stock of the Company or will not, and will not permit any of its Subsidiaries (subsidiaries to, merge or securities convertible consolidate with any other person or exchangeable therefor), (ii) split, reverse split, combine, subdivide or reclassify or otherwise amend the terms acquire a material amount of any capital stock (or securities convertible or exchangeable therefor) of the Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c), issue or authorize the issuance assets of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable therefor), or (iv) purchase, redeem or otherwise acquire or offer to purchase, redeem or acquire any Company Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the Company, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or in accordance with the terms of the ESPPperson;
(c) issuethe Company will not, deliverand will not permit any of its subsidiaries to, sell, grantlease, announce, pledge, transfer, subject to any Lien, license or otherwise encumber or dispose of any equity interests of the Company material assets or incur any obligation to make any payments to any Person based on the price or value of any Company Securities, other than (i) the issuance of shares of Company Common Stock property except pursuant to (A) the terms of Company Equity Awards that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement existing contracts or (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP commitments and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company;
(d) merge, consolidate or, other than in the ordinary course of business substantially consistent with past practice, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries;
(e) (i) increase the salary, wages, benefits, bonuses or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
(id) sellthe Company will not, assignand will not permit any of its subsidiaries, leaseto take any action that would make any representation and warranty of the Company hereunder materially inaccurate in any respect at, license, pledge, transfer, abandon, subject to any Lien, permit to lapse or otherwise dispose as of any assetstime prior to, properties, or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregate, except in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practiceEffective Time;
(je) agree the Company will not, and will not permit any of its subsidiaries to enter into any licensing agreement or other similar arrangement with respect to any exclusivityCompany Intellectual Property Right, except that:
(i) ServerNet software may be licensed to non-competition or similar provision or covenant limiting the ability affiliates of the Company or any of its Subsidiaries to compete or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions and conditions not materially different than under ServerNet software licenses existing on as of the date hereof;
(ii) NonStop software may be licensed to non-affiliates of this Agreement the Company identified in writing to Parent prior to the date hereof on terms and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than conditions mutually acceptable to the Company and its Subsidiaries) after the Effective Time;Parent; and
(k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including operating systems and other software products may be licensed to the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases Company's customers in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between consistent with past practices.
(f) the Company will not, and will not permit any of its wholly-owned Subsidiaries subsidiaries to, agree or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse commit to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;
(o) institute, settle or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than in the ordinary course of business or as contemplated by this Agreement (i) amend, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an Affiliate of the Company;
(s) voluntarily terminate, amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Act; or
(u) authorize, commit or agree to take do any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentenceforegoing.
Appears in 2 contracts
Samples: Merger Agreement (Tandem Computers Inc /De/), Merger Agreement (Compaq Computer Corp)
Conduct of the Company. The Company covenants (a) During the period commencing on the date of this Agreement and agrees thatending on the earlier of the termination of this Agreement in accordance with Article 8 and the Effective Time (the “Pre-Closing Period”), except for matters to the extent (i) expressly permitted or expressly contemplated required by this AgreementApplicable Law, (ii) set forth on Part 6.01 of the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken with the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed), or (iii) expressly permitted, prohibited or required by this Agreement, the Company shall, and shall cause each of its Subsidiaries to, conduct its business in the ordinary course of business, and use commercially reasonable efforts to (A) maintain and preserve intact its business organization, assets, technology, present lines of business, rights and franchises, (B) keep available the services of Company Employees who are important to the operation of the business of the Company and its Subsidiaries as is presently conducted, (C) maintain in effect all of its material Permits, and (D) preserve its relationships with those Persons having significant business relationships with the Company or any of its Subsidiaries.
(b) Without limiting the generality of the foregoing in Section 6.01(a), during the Pre‑Closing Period, except to the extent (w) required by Applicable Law, (x) undertaken with the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed), (vy) expressly required by Applicable Law this Agreement or (z) set forth in the rules and regulations correspondingly numbered subsection of Nasdaq, from the date hereof until the earlier Section 6.01(b) of the Effective Time and the termination of this Agreement in accordance with Article 8 hereofCompany Disclosure Schedules, the Company (A) shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to (1) conduct its business in the ordinary course in all material respects, substantially consistent with past practice, (2) to the extent consistent with the foregoing clause (1), maintain its business as a going concern and (3) keep available the services of its current officers and key employees and to preserve the goodwill of and maintain satisfactory relationships with those Persons having material business relationships with the Company and its Subsidiaries, and (B) shall not, and shall cause each not permit any of its Subsidiaries not to:
(ai) amend the Company’s certificate of incorporation Company Organizational Documents or bylawsthe Company Subsidiary Organizational Documents (including by merger, consolidation, corporate migration, redomiciliation or otherwise), or amend otherwise take any certificate of incorporation or bylaws, or other comparable charter or organizational documents, action to exempt any Person from any provision of the Company’s SubsidiariesCompany Organizational Documents or the Company Subsidiary Organizational Documents;
(bii) other than with respect to a direct split, combine, subdivide or indirect wholly owned Subsidiary reclassify any of the Companyits capital stock;
(iii) amend any term of any Company Security or any security of any of its Subsidiaries (in each case, including by merger, consolidation or otherwise);
(iiv) establish a record date formake, declare, accrue, set aside or pay any dividends ondividend, or make any other distributions distribution on (whether in cash, stock, property or otherwise) in respect of), or enter into any agreement with respect to the voting ofdirectly or indirectly redeem, purchase or otherwise acquire, any shares of its capital stock, or any other securities or obligations convertible (whether currently convertible or convertible only after the passage of time or the occurrence of certain events) into or exchangeable for any shares of its capital stock (except (A) dividends paid by any of the wholly owned Subsidiaries of the Company or any (to the extent such dividends would not result in a material Tax Liability and are paid in the ordinary course of its Subsidiaries (or securities convertible or exchangeable therefor), (ii) split, reverse split, combine, subdivide or reclassify or otherwise amend the terms of any capital stock (or securities convertible or exchangeable therefor) of the Company or any of its Subsidiaries, (iii) except as expressly provided in Section 6.01(c), issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries (or securities convertible or exchangeable thereforbusiness), or (ivB) purchase, redeem or otherwise acquire or offer to purchase, redeem or acquire any Company Securities, except for the net settlement of Company Equity Awards or acquisitions acceptance of shares of Company Common Stock by as payment for the Companyexercise price of Company Options or for withholding Taxes incurred in connection with the exercise of Company Options or the vesting or settlement of Company Stock Awards outstanding as of the date hereof or granted after the date hereof in compliance with this Agreement, in each case, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes or case in accordance with the terms of the ESPPapplicable award agreements);
(cv) issue, deliver, sell, grant, announce, pledge, transfer, subject to any Lien (other than a Permitted Lien), pledge or otherwise encumber or dispose of or permit to become outstanding any equity interests additional shares of the Company its capital stock or incur securities convertible or exchangeable into, or exercisable for, any obligation to make shares of its capital stock or any payments to any Person based on the price options, warrants, or value other rights of any Company Securities, other than (i) the issuance of kind to acquire any shares of Company Common Stock its capital stock, except pursuant to (A) the terms exercise of Company Equity Options or the settlement of Company Stock Awards that are outstanding on as of the date hereof, in each case in accordance with the applicable terms of such Company Equity Awards as in effect on the date of this Agreement their terms, or (B) grants enter into any agreement, understanding or awards of Company Securities or Company Equity Awards required to be made pursuant arrangement with respect to the terms sale or voting of existing employment its capital stock or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Companyinterests;
(dvi) merge, consolidate or, other than in the ordinary course adopt any plan of business substantially consistent with past practice, enter into strategic alliance or similar legal partnership with any Person, file a voluntary petition for bankruptcy or liquidation, dissolve, liquidate, restructure or recapitalize or adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization recapitalization, corporate migration, redomiciliation or other reorganization of the Company or any of its Subsidiaries or file a petition in bankruptcy under any provisions of Applicable Law on behalf of the Company or any of its Subsidiaries or consent to the filing of any bankruptcy petition against any the Company or any of its Subsidiaries under any similar Applicable Law;
(vii) create any Subsidiary of the Company or any of its Subsidiaries;
(eviii) other than renewals of existing letters of credit, redeem, repurchase, prepay (i) increase other than prepayments of revolving loans), defease, incur, assume, endorse, guarantee or otherwise become liable for or modify in any material respects the salaryterms of any Indebtedness or issue or sell any debt securities or calls, wagesoptions, benefits, bonuses warrants or other cash compensation payable rights to acquire any debt securities (directly, contingently or otherwise);
(ix) grant or suffer to become payable to exist any material Liens on any properties or assets, tangible or intangible, of the Company or any of its Subsidiaries, other than Permitted Liens;
(x) make any capital investment in, loan or advance to, or make or forgive any loan to, any other Person, except for (A) loans, advances, or capital contributions solely among the Company and its wholly owned Subsidiaries or solely among the Company’s employeeswholly owned Subsidiaries, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made each case in the ordinary course of business and substantially consistent with past practiceonly to the extent that such loan, advance or (D) capital would not be recharacterized as an equity investment under the provisions of Treasury Regulations promulgated under Section 385 of the Code and is not made in connection with changes any restructuring or reorganization plan, (B) advances for reimbursable employee expenses in the ordinary course of business and (C) extensions of credit to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made customers in the ordinary course of business, and ;
(iixi) other than in the ordinary course of business or in accordance with any Contract in effect on the date hereof, (A) sell, transfer, mortgage, lease, license, pledge, abandon, encumber or otherwise dispose of any of its material tangible properties or assets to any Person other than to the Company or a wholly owned Subsidiary of the Company (including any assets relating to Fitbit Pay™), (B) waive, cancel, forgive, release, settle or assign any material Indebtedness (other than Indebtedness solely among the Company and its wholly owned Subsidiaries or solely among the Company’s wholly owned Subsidiaries, in each case in the ordinary course of business and only to the extent such waiver, cancellation, forgiveness, release, settlement or assignment would not result in the recognition of material cancellation of debt income or incurrence of material withholding Taxes by the Company or any of its Subsidiaries and is not made in connection with any restructuring or reorganization plan) owed to the Company or any of its Subsidiaries or any material claims held by the Company or any of its Subsidiaries against any Person or (C) grant any new material refunds, credits, rebates or allowances to any customers;
(xii) (A) acquire (whether by merger or consolidation, acquisition of stock or assets or by formation of a joint venture or otherwise) any other Person or business or any material assets, deposits or properties of any other Person or (B) make any material investment in any other Person either by purchase of stock or securities, contributions to capital, property transfers or purchase of property or assets of any Person, other than a wholly owned Subsidiary of the Company;
(xiii) make any capital expenditures that are in excess of the capital expenditure budget of the Company set forth in Section 6.01(b)(xiii) of the Company Disclosure Schedules by more than five percent (5%) in the aggregate;
(xiv) except in the ordinary course of business (A) (1) terminate, cancel, renew, fail to exercise an expiring renewal option, amend, grant a waiver under or otherwise modify any Company Material Contract or Company Real Property Lease or any Contract that would constitute a Material Contract or a Company Real Property Lease if in effect as of the date of this Agreement (including any buyout of such Contract) or (2) enter into any Contract that would constitute a Material Contract, except, in each case, as otherwise expressly permitted by this Section 6.01(b) with respect to the subject matter of such Material Contract, or a Company Real Property Lease if in effect as of the date of this Agreement or (B) without prior consultation with Parent, enter into any Contract expected to result in payment by the Company and its Subsidiaries in excess of $1,000,000 annually that (1) will not expire by its terms in twelve (12) months or fewer and (2) cannot be terminated by the Company or any of its Subsidiaries without material penalty upon no more than twelve (12) months’ notice;
(xv) except as may be required by Applicable Law or as required by pursuant to the terms and conditions of the applicable any Company Employee Plan or under Applicable Lawin effect on the date hereof, enter into, (A) adopt, amend (including by accelerating the vestingamend, payment or funding of any benefits under), modify or terminate any Company Employee Plan (or any plan, agreementprogram, arrangementpolicy, agreement or policy arrangement that would be a Company Employee Plan if in effect on as of the date hereof), (B) make any deposits or contributions of cash or other property to or take any other action to fund or in any other way secure the payment of compensation or benefits under the Company Employee Plans, (C) increase in any manner the compensation (including severance, change-in-control and retention compensation) or benefits of any Company Employee or other service providers of the Company or its Subsidiaries or (D) grant, or commit to grant, any equity-related, performance, incentive or similar awards or bonuses to any Company Employee or take any action that would result in the acceleration of vesting or adjustment of exercisability of any outstanding equity-based award, including Company Stock Awards;
(fxvi) hire(A) hire or promote the employment or services of (1) any employee at the level of Senior Director or above or (2) any employee at a compensation level commensurate with compensation generally provided to employees at the level of Senior Director and above (other than with respect to (x) a vacancy for a position at the level of Senior Director or above in existence as of or following the date hereof, engage or (y) a promotion in the ordinary course of business) or (B) terminate the employment or engagement services of any officer or any employee at the level of Senior Director or above except as a direct result of such officer’s or employee’s (other than for cause1) willful failure to perform the duties or responsibilities of his or her employment, as determined by the Company(2) any employee, officer, directorengaging in serious misconduct, or Independent Contractor whose annual base cash compensation exceeds $250,000(3) being convicted of or entering a plea of guilty or no contest to any crime;
(gxvii) negotiateexcept as required by Applicable Law or non-U.S. custom, enter into, amend into or extend negotiate to enter into any Collective Bargaining Agreement, works council or other labor agreement or arrangement;
(hxviii) acquire implement or commit adopt any change in its accounting principles, policies, practices or methods, other than as may be required by GAAP or Applicable Law;
(xix) change in any material respect the policies or practices regarding accounts receivable or accounts payable or fail to acquire manage working capital materially in accordance with past practices; (xx) commence, settle, pay, discharge, satisfy or compromise any businessProceeding (other than a Tax audit or Proceeding governed by Section 6.01(b)(xxi)), assetsexcept for (A) settlements or compromises that (1) involve monetary remedies with a value not in excess of $500,000, real property or capital stock ofwith respect to any individual Proceeding, or make any loans$1,000,000, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one (2) do not impose any material restriction on its business or more acquisitions the business of inventoryits Subsidiaries or materially restrict the use or registration or affect the validity or enforceability of any material Company Owned IP, suppliesand (3) do not relate to any Stockholder Litigation (the settlement or compromise of which shall be governed exclusively by Section 6.09), intellectual property assets, raw materials, equipment or similar assets and (B) the commencement of any Proceeding that is in the ordinary course of business and in amounts substantially consistent with past practice;
(i) sellit being understood that responses, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse or otherwise dispose of any assets, propertiescounter-claims, or Company Intellectual Property, similar filings in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregate, except in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice;
(j) agree to any exclusivity, non-competition or similar provision or covenant limiting the ability of the Company or any of its Subsidiaries to compete or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;
(o) institute, settle or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than in the ordinary course of business or as contemplated by this Agreement (i) amend, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an Affiliate of the Company;
(s) voluntarily terminate, amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Act; or
(u) authorize, commit or agree to take any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, commenced prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise date hereof will not be deemed to commence any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentence.Proceeding);
Appears in 2 contracts
Conduct of the Company. The Company covenants and agrees that, except for matters (i) expressly permitted or expressly contemplated by this Agreement, (ii) set forth on Part 6.01 of the Company Disclosure Schedule, (iii) reasonably undertaken in connection with any COVID-19 Measures, (iv) undertaken with the prior written consent of Parent (which shall not be unreasonably withheld, conditioned or delayed), (v) required by Applicable Law or the rules and regulations of Nasdaq, from From the date hereof until the earlier of the Effective Time and the or termination of this Agreement in accordance with Article 8 hereofits terms, except (i) as required by applicable Law, (ii) as expressly contemplated by this Agreement, (iii) as set forth in Section 6.01 of the Company Disclosure Schedule, (iv) to the extent Parent shall otherwise consent in writing, which consent shall not unreasonably be withheld, delayed or conditioned, or (v) after the Acceptance Date and the appointment of directors pursuant to Section 1.03(a), as approved by or completed with the actual knowledge of a majority of the Board of Directors of the Company, the Company (A) shall, and shall cause each of its Subsidiaries to to, use their respective commercially reasonable efforts to (1) conduct its business their businesses in the ordinary course of business consistent with past practices and that the Company and its Subsidiaries shall use their respective commercially reasonable efforts to preserve their business organizations intact and maintain existing relations and goodwill with Governmental Authorities, customers, suppliers, employees and business associates in all material respectseach case, substantially consistent with past practice. Furthermore, except as set forth in clauses (2i) to through (v) in the extent consistent with the foregoing clause (1)prior sentence, maintain its business as a going concern and (3) keep available the services of its current officers and key employees and to preserve the goodwill of and maintain satisfactory relationships with those Persons having material business relationships with the Company and its Subsidiaries, and (B) shall not, and nor shall cause each it permit any of its Subsidiaries not to:
(a) amend the Company’s certificate its articles of incorporation or bylawsincorporation, or amend any certificate of incorporation or bylaws, bylaws or other comparable charter similar organizational documents (whether by merger, consolidation or organizational documents, of the Company’s Subsidiaries;
(botherwise) other than with respect to a the Company Subsidiaries, immaterial amendments required by applicable law;
(b) split, combine or reclassify any shares of its capital stock or declare, set aside or pay any dividend or other distribution (whether in cash, equity interests, stock or property or any combination thereof) in respect of its capital stock except for cash dividends payable by any direct or indirect wholly-owned Subsidiaries of the Company, or redeem, repurchase or otherwise acquire or offer to redeem, repurchase or otherwise acquire any Company Securities or any Company Subsidiary Securities;
(c) other than in connection with the Top-Up Option, (i) issue, sell or otherwise deliver, or authorize the issuance, sale or other delivery of, any Company Securities or Company Subsidiary Securities, other than the issuance by any direct or indirect wholly-owned Subsidiary of the Company of Company Subsidiary Securities to the Company or to another direct or indirect wholly owned Subsidiary of the Company, or (iii) establish a record date foramend any term of any Company Security or any Company Subsidiary Security (whether by merger, declare, set aside consolidation or pay any dividends on, otherwise);
(d) enter into or make any other distributions (whether in cashloans, stock, property advances or otherwise) in respect ofcapital contributions to, or enter into any agreement with respect to the voting ofinvestments in, any other Person except for loans, advances and capital stock contributions to direct or indirect wholly-owned Subsidiaries of the Company or business expense advances in the ordinary course of business consistent with past practice to employees of the Company or any of its Subsidiaries Subsidiaries;
(i) acquire any material assets or securities convertible property or exchangeable therefor)directly or indirectly acquire (by merger, consolidation or acquisition of stock or assets) any other Person or any equity interest therein, in each case other than in the ordinary course of business consistent with past practice or (ii) splitauthorize, reverse splitor enter into any commitment for, combineany new material capital expenditure other than as set forth in the Company’s 2015 budget materials attached as Section 6.01(e) of the Company Disclosure Schedule;
(f) sell, subdivide or reclassify lease, license or otherwise amend transfer any material assets or property other than sales, leases, licenses or transfers in the ordinary course of business consistent with past practices;
(g) sell, assign, license or otherwise transfer any material Company Intellectual Property Rights (or any rights therein) or acquire any material Intellectual Property other than in the ordinary course of business consistent with past practices;
(h) (i) incur, assume, guaranty or otherwise become liable for any long-term or short-term indebtedness for borrowed money other than in the ordinary course of business consistent with past practices and pursuant to any credit agreement to which the Company or any of its Subsidiaries is a party as of the date of this Agreement, other than indebtedness existing solely between the Company and its Subsidiaries or between such Subsidiaries or (ii) pre-pay any long-term debt or short-term debt for borrowed money other than in the ordinary course of business consistent with past practices;
(i) except in connection with any indebtedness not prohibited by this Agreement, create or incur any Lien on any material assets or property;
(j) except as required by the terms of a Plan in effect on the date hereof or as required pursuant to applicable Law, (i) increase compensation, bonuses or other benefits (including severance or termination pay) payable to any capital stock (employee, agents or securities convertible or exchangeable therefor) consultants of the Company or any of its Subsidiaries, except in the ordinary course of business in the case of employees, agents or consultants (iiiwho are natural persons) except as expressly provided in Section 6.01(c)who are not Directors or Officers, issue (ii) enter into, adopt or authorize the issuance amend any employment, change of any control, severance, compensation, bonus, profit-sharing, stock option or other securities in respect ofstock related rights or other forms of incentive or deferred compensation, in lieu of retirement benefits or in substitution forother benefit agreement, shares of capital stock plan, arrangement or policy applicable to (A) employees of the Company or any of its Subsidiaries Subsidiaries, except in the case of employees, agents or consultants (who are natural persons) who are not Directors or securities convertible or exchangeable therefor)Officers in the ordinary course of business, or (ivB) purchaseXxxxxx Xxxx, redeem Xxxxxx Xxxxx, Xxxx Xxxxx, Xxxxx Xxxxxxx, Xxxx Xxxxxxx, Xxxx Xxxxx or otherwise acquire or offer Xxxxx Xxxxxxx which increases the benefits to purchase, redeem or acquire any Company Securities, except for the net settlement of Company Equity Awards or acquisitions of shares of Company Common Stock by the CompanyPersons set forth in this clause (B) in excess of, in each casethe aggregate, in satisfaction by holders of Company Equity Awards of the applicable withholding taxes $100,000, (iii) adopt or in accordance with the terms of the ESPP;
(c) issueestablish any new plan, deliverpolicy, sellcommitment, grant, announce, pledge, transfer, subject to any Lien, otherwise encumber program or dispose of any equity interests of the Company or incur any obligation to make any payments to any Person based on the price or value of any Company Securities, other than (i) the issuance of shares of Company Common Stock pursuant to (A) the terms of Company Equity Awards agreement that are outstanding on the date hereof, in accordance with the applicable terms of such Company Equity Awards as in effect would be a Plan on the date of this Agreement or amend or terminate any Plan, (iv) provide for the grant or acceleration of Stock Options or any other equity-based compensation awards, (v) enter into any collective bargaining agreement or similar labor agreement, (vi) terminate without “cause” any Officer, or (vii) except for the hiring or engagement of non-officer employees or individual independent contractors in the ordinary course of business who have aggregate annual compensation that is not in excess of $100,000, hire or engage any employee or individual independent contractor of the Company or any of its Subsidiaries;
(k) change the Company’s accounting practices or principles, except as required by changes in GAAP or by applicable Law;
(l) except as may be required by Law, make or change any material Tax election, change any annual Tax accounting period, change any material method of Tax accounting, materially amend any Tax Returns, except to claim Tax refunds, enter into any material closing agreement, settle any material Tax claim, audit or assessment, or surrender any right to claim a material Tax refund, offset or other reduction in Tax liability;
(m) settle or compromise any pending or threatened Legal Proceeding for an amount equal to, or greater than, $500,000, except for the settlement of any Legal Proceeding for an amount not to exceed 125% of the amount reserved against in the Balance Sheet and which does not include any obligation (other than the payment of money) to be performed by the Company or its Subsidiaries to be performed following the Effective Time;
(n) (A) enter into, terminate, amend or waive any rights under any Material Contract or enter into any new Contract that, if entered into prior to the date of this Agreement, would have been required to be filed as an exhibit to the Company SEC Documents pursuant to Regulation S-K of the Securities Act; (B) grants or awards of Company Securities or Company Equity Awards required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof; provided that such grants or awards are pursuant to a form of award agreement that has been made available to Parent or (ii) the issuance of shares of Company Common Stock under the ESPP and pursuant to the terms thereof and Section 2.06 of this Agreement or (iii) the issuance of equity interests of a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company;
(d) merge, consolidate or, other than in the ordinary course of business substantially consistent with past practice, enter into strategic alliance any other Contract that is material to the Company and its Subsidiaries taken as a whole; (C) enter into or extend the term or scope of any Contract that purports to restrict the Company or any existing or future Subsidiary or Affiliate of the Company from engaging in any line of business or in any geographic area; (D) enter into any Contract that would be breached by, or require the consent of any third party in order to continue in full force following, consummation of the Transactions contemplated hereby; or (E) release any Person from or modify or waive any provision of any material confidentiality, standstill or similar legal partnership with any PersonContract;
(o) adopt, file renew or implement a voluntary petition for bankruptcy rights plan or liquidation, dissolve, liquidate, restructure or recapitalize similar arrangement;
(p) propose or adopt a plan or agreement of, or resolutions providing for or authorizing, of complete or partial bankruptcy, liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries;
(eq) (i) increase the salary, wages, benefits, bonuses create or other cash compensation payable or to become payable to the Company’s employees, officers, directors or Independent Contractors, except for increases (A) required to be made pursuant to the terms of existing employment or other compensation agreements or arrangements in effect as of the date hereof, (B) required under have any Company Employee Plan pursuant to the terms in effect as of the date hereof or Collective Bargaining Agreement or under Applicable Law, (C) made in the ordinary course of business and substantially consistent with past practice, or (D) in connection with changes to benefits as part of annual enrollment; provided that such changes made as part of annual enrollment are made in the ordinary course of business, and (ii) other than as required by the terms of the applicable Company Employee Plan or under Applicable Law, enter into, adopt, amend (including by accelerating the vesting, payment or funding of any benefits under), modify or terminate any Company Employee Plan or plan, agreement, arrangement, or policy that would be a Company Employee Plan if in effect on the date hereof;
(f) hire, engage or terminate the employment or engagement of (other than for cause, as determined by the Company) any employee, officer, director, or Independent Contractor whose annual base cash compensation exceeds $250,000;
(g) negotiate, enter into, amend or extend any Collective Bargaining Agreement;
(h) acquire or commit to acquire any business, assets, real property or capital stock of, or make any loans, advances or capital contribution to any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, entrance into a joint venture or otherwise) that, individually involve a purchase price or principal amount of not more than $500,000 individually or $2,000,000 in the aggregate, other than one or more acquisitions of inventory, supplies, intellectual property assets, raw materials, equipment or similar assets in the ordinary course of business and in amounts substantially consistent with past practice;
(i) sell, assign, lease, license, pledge, transfer, abandon, subject to any Lien, permit to lapse or otherwise dispose of any assets, properties, or Company Intellectual Property, in each case having a value in excess of $500,000 individually or $5,000,000 in the aggregate, except in the ordinary course of the Company’s or its Subsidiaries’ business substantially consistent with past practice;
(j) agree to any exclusivity, non-competition or similar provision or covenant limiting the ability new Subsidiary of the Company or any of its other than the Subsidiaries to compete or engage in any line of business, with any Person or in any geographic area, or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time, except, in each case, in connection with Contracts entered into with customers, contractors, distributors, resellers, partners or suppliers of the Company and its Subsidiaries or similar arrangements, that (x) are made in the ordinary course of business substantially consistent with past practice, (y) are on terms substantially similar to any such restrictions existing on the date of this Agreement and (z) would not have any such effect (or otherwise restrict or bind) on Parent or any of its Affiliates (other than the Company and its Subsidiaries) after the Effective Time;
(k) adopt or change any of the accounting methods used by the Company materially affecting its assets, liabilities or business, except for such changes that are required by (i) GAAP (or any interpretation thereof), (ii) by any Applicable Law, including Regulation S-X under the Securities Act, or (iii) by any Governmental Authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);
(l) except for borrowings of revolving loans under the Existing Credit Agreement and capital leases in the ordinary course of business and except for intercompany loans, guarantees, advance or capital contribution between the Company and any of its wholly-owned Subsidiaries or between any wholly-owned Subsidiaries of the Company, (i) incur, issue, or otherwise become liable for any additional Indebtedness in excess of $5,000,000 in the aggregate, (ii) modify in a manner materially adverse to the Company or its Subsidiaries the terms of any material Indebtedness existing as of the date hereof, (iii) assume, guarantee or endorse the obligations of any Person (other than a wholly-owned Subsidiary of the Company), (iv) make any loan, advance or capital contribution to any Person in excess of $500,000 in the aggregate, other than capital contributions and loans to any wholly owned Subsidiary, and extensions of trade credit in the ordinary course of business, (v) amend, modify or waive any provision of the Existing Credit Agreement (other than to waive or otherwise cure any “Default” or “Event of Default” thereunder provided that Parent has been provided prior written notice thereof and consented to such amendment, modification or waiver), or (vi) other than the regularly scheduled and required amortization payments under the Existing Credit Agreement, repurchase, prepay, terminate or refinance any Indebtedness arising under the Existing Credit Agreement;
(m) make, change or revoke any material Tax election, change any annual Tax accounting period, file any material amended Tax Return or file any material Tax Return in a manner inconsistent with past practice, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or similar provision of state, local or non-U.S. law) in respect of any material Tax, settle any material Tax Proceeding, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, or consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment outside the ordinary course of business;
(n) make any commitment with respect to capital expenditures in excess of the amounts set forth in Part 6.01(n)(i) of the Company Disclosure Schedule;
(o) institute, settle or agree to settle any Proceedings, other than (i) the settlement of claims, liabilities or obligations (A) reserved against on the most recent balance sheet of the Company included in the Company SEC Documents or (B) involving payments of less than $500,000 individually or $1,000,000 in the aggregate; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business or (ii) Proceedings brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub;
(p) enter into any material new line of business;
(q) fail to maintain in all material respects any Insurance Policies;
(r) other than in the ordinary course of business or as contemplated by this Agreement (i) amend, modify, renew or terminate, or grant any release or waiver under, any Material Contract (excluding the expiration of any Material Contract in accordance with its terms) or enter into any new Contract that would have been a Material Contract if in existence on the date of this Agreement, or (ii) renew or enter into any Contract with an Affiliate of the Company;
(s) voluntarily terminate, amend or fail to renew or preserve any Company Communications License as set forth on Part 6.01(s) of the Company Disclosure Schedule;
(t) conduct any reduction-in-force of employees or other service providers or otherwise implement any layoffs, in each case that could implicate the WARN Act; or
(ur) authorize, commit or agree to take do any of the foregoing actions. Notwithstanding anything set forth in this Agreement or any other documents related to the Merger, prior to the Closing, neither Parent nor Merger Sub shall, directly or indirectly, exercise any form of control over the Company, any of its subsidiaries, or any of the Governmental Permits, within the meaning of the FCC Rules and the FCC’s orders and other published rulings thereunder. In addition, the Company and its Subsidiaries may take such further commercially reasonable actions necessary to (x) respond to emergencies or protect the health and safety of the Company’s or any Subsidiary’s employees, suppliers, customers and other individuals having business dealings with the Company or any Subsidiary of the Company (including any COVID-19 Measures) or (y) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic; provided that the Company shall, to the extent legally permissible and only if time permits, consult with Parent prior to taking the actions described in this sentenceforegoing.
Appears in 2 contracts
Samples: Merger Agreement (Tecumseh Products Co), Merger Agreement (Tecumseh Products Co)
