Conduct Prior to Effective Time. Except as expressly contemplated by this Agreement or with the prior written consent of Parent, from and after the date of this Agreement until the earlier of the termination of this Agreement in accordance with its terms or the Effective Time, the Company shall, and shall cause each of its Subsidiaries to, act in the Ordinary Course of Business, and use commercially reasonable efforts to maintain and preserve its and each Subsidiary’s business organization, assets, and properties, keep available the services of its present Company Persons and preserve its advantageous business relationships with customers, strategic partners, suppliers, distributors and others having business dealings with it to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time. Without limiting the generality of the foregoing, from and after the date of this Agreement until the earlier of the termination of this Agreement in accordance with its terms or the Effective Time, the Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, without the prior written consent of Parent: (a) (i) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, securities or other property) in respect of, any of its capital stock; (ii) 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 for shares of its capital stock or any of its other securities; or (iii) purchase, redeem or otherwise acquire any shares of its capital stock or any other securities or any rights, warrants or options (other than the forfeiture (at no cost to the Company or its Subsidiaries) of Company Stock Options pursuant to any Company Stock Plan, by employees in connection with the termination of such employee’s employment) to acquire any such shares or other securities or securities the value of which is measured by such securities; (b) issue, deliver, sell, grant, pledge or otherwise dispose of or encumber any shares of its capital stock, any other voting securities or any securities convertible into or exchangeable for, or any rights, warrants or options to acquire, any such shares, voting securities or convertible or exchangeable securities, “phantom” stock, “phantom” stock rights, stock appreciation rights or stock-based performance units or securities the value of which is measured by such securities (other than the issuance of shares of Company Common Stock upon the exercise of Company Stock Options outstanding on the date of this Agreement in accordance with their present terms), issue or accept contributions for the purchase of shares of Company Common Stock pursuant to the ESPP, or amend the terms of any of the foregoing, except as expressly contemplated by Section 3.3 of this Agreement; (c) amend its Certificate of Incorporation, By-laws or other comparable charter or organizational documents, except as expressly provided by this Agreement; (d) acquire (A) by merging or consolidating with, or by purchasing all or a substantial portion of the assets or any stock of, or by any other manner, any business or any other Person or division thereof or (B) any assets that are material, in the aggregate, to the Company and its Subsidiaries, taken as a whole, except purchases of inventory and components in the Ordinary Course of Business; (e) except in the Ordinary Course of Business, sell, lease, license, pledge, or otherwise dispose of or encumber any properties or assets of the Company or of any of its Subsidiaries; (f) whether or not in the Ordinary Course of Business, sell, dispose of, or otherwise transfer any assets material to the Company and its Subsidiaries, taken as a whole (including any accounts, leases, Contracts or Intellectual Property or any assets or the stock of any Subsidiaries); (g) adopt or implement any stockholder rights plan; (h) enter into a Contract with respect to any merger, consolidation, liquidation, dissolution, restructuring, recapitalization or other reorganization or business combination, or any acquisition or disposition of all or any substantial portion of the assets or securities of the Company or any of its Subsidiaries; (i) (i) incur or suffer to exist any indebtedness for borrowed money other than such indebtedness reflected on the Company Balance Sheet or guarantee any such indebtedness of another Person, (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans or advances (in each case other than for employee travel or other business purposes or for employee tuition reimbursement in each case in the Ordinary Course of Business) or capital contributions to, or investments in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries or (iv) enter into any hedging agreement or other financial agreement or arrangement the value of which may change with fluctuations in commodities or equities, prices or exchange rates or other derivative instruments; (j) make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $100,000 in the aggregate for the Company and its Subsidiaries, taken as a whole; (k) make any change in its accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve or revalue any assets, or make any change in its fiscal year; (i) pay, discharge, settle, satisfy, fund or accept any claims, liabilities, disputes, audit or investigation finding or result or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than in accordance with their terms as in effect on the date of this Agreement, of claims, liabilities or obligations reflected or reserved against in, the most recent consolidated financial statements (or the notes thereto) of the Company included in the Company SEC Reports filed prior to the date of this Agreement (to the extent so reflected or reserved against), or (ii) waive any material benefits of, modify in any adverse respect, fail to enforce, or consent to any matter with respect to which its consent is required under, any confidentiality, standstill or similar Contracts to which the Company or any of its Subsidiaries is a party; (m) terminate any material Contract to which the Company or any of its Subsidiaries is party, or waive, release or assign any material rights or claims (including any write-off or other compromise of any accounts receivable of the Company or any of its Subsidiaries), or except in the Ordinary Course of Business modify or amend any material Contract to which the Company or any of its Subsidiaries is party; (i) except in the Ordinary Course of Business enter into, or modify the terms of, any Contract relating to the rendering of services or the distribution, sale or marketing by third parties of the products of, or products licensed by, the Company or any of its Subsidiaries or (ii) license, or modify the terms of any license of, any material intellectual property rights to or from any third party, other than non-exclusive licenses which may be canceled without penalty by the Company or its Subsidiaries upon written notice of thirty (30) days or less; (o) except as expressly provided by Section 3.3, (i) take any action with respect to, adopt, enter into, terminate or amend any employment, severance or similar agreement, policy, practice or arrangement or benefit plan or compensation for the benefit or welfare of any current or former Company Person or any collective bargaining agreement (including with respect to the existing collective bargaining agreement of Integrated Information Technology Corporation (a Subsidiary of the Company), make any offer or take any bargaining position without Parent’s prior written consent, which consent shall not be unreasonably withheld), (ii) increase in any material respect the compensation or benefits of, or pay any bonus to, any Company Person, (iii) amend or accelerate the right to payment or vesting of any compensation or benefits, including any outstanding options or any restricted stock awards, (iv) pay any material benefit not provided for as of the date of this Agreement under any Company Employee Plan, (v) grant any awards under, or otherwise expand the benefits of or the persons entitled to participate in, any bonus, incentive, performance or other compensation plan or arrangement or benefit or compensation plan, policy, practice or arrangement (including the Company’s Executive Severance Plan, and offer additional persons the opportunity to participate in, or to participate in, the Company’s Executive Severance Plan), including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, (vi) terminate the employment or take other adverse actions with respect to any of the Company executives and other employees identified in Section 6.1(o) of the Company Disclosure Schedules (the “Key Employees”), (vii) employ or offer to employ or promote or offer to promote, terminate or give notice of intent to terminate, any Person at Pay Grade 8 or above (or its equivalent for Subsidiaries using a different pay scale) (based upon the Company’s or its Subsidiaries’ respective existing pay scales) or (viii) take any action (other than (x) in the Ordinary Course of Business with respect to payment of compensation or (y) pursuant to retention agreements entered into prior to December 31, 2004) to fund or in any other way secure the payment of compensation or benefits under any Employee Plan or Contract; (p) (i) make or rescind any Tax election, (ii) settle or compromise any Tax liability, (iii) amend any Tax Return, (iv) make a request for a written ruling of a taxing authority relating to Taxes or file a request for a pre-filing agreement or similar procedure or (v) enter into a legally binding agreement with a taxing authority with respect to Taxes; (q) close (except pursuant to the existing terms of leases disclosed in Section 4.12(b) of the Company Disclosure Schedule entered into prior to the date of this Agreement (and without giving effect to the transactions contemplated by this Agreement)) or open any material facility or office, or initiate, compromise or settle any material Proceeding; (r) permit any transfer or exercise of rights with respect to shares of Company Common Stock in violation of the Stockholder Agreements; (s) fail to maintain insurance at levels substantially comparable to levels existing as of the date of this Agreement or to timely file claims thereunder (provided that the Company shall not pay or incur liability for any materially increased premium without Parent’s consent, not to be unreasonably withheld); (t) fail to pay accounts payable and other obligations in the Ordinary Course of Business; (u) agree to any covenant of the Company or any of its Subsidiaries not to compete or other covenant of the Company or any of its Subsidiaries restricting the development, manufacture, marketing or distribution of the products or services of the Company or any of its Subsidiaries or otherwise limiting the freedom of the Company or any of its Subsidiaries to compete in any line of business (other than conflict of interest requirements that are included in any outstanding Bid as of the date hereof, as disclosed in Section 6.1(u) of the Company Disclosure Schedule, that may become effective without the right of negotiation or refusal by Company or its Subsidiaries, by virtue of such Bid being accepted) or with any Person or in any area or to own, operate, sell, transfer, pledge or otherwise dispose of or encumber any material assets or that would so limit the freedom of Parent or any of its affiliates after the consummation of the Offer or the Merger; (v) with respect to Building, permit Building to take any of the actions listed in paragraphs (a) through (u) of this Section 6.1, to the extent reasonably within the Company’s control, and without limiting the scope of the foregoing, authorize or agree to any such action in the Company’s capacity as a member of Building; or (w) authorize any of, or commit or agree, in writing or otherwise, to take any of, the foregoing actions or any action which would cause any representation or warranty of the Company set forth in this Agreement to be inaccurate under the applicable standard included in paragraph (vi)(E) of Annex I, or would materially impair or prevent the satisfaction of any condition in Annex I or Article VIII.
Appears in 3 contracts
Samples: Merger Agreement (Pec Solutions Inc), Merger Agreement (Nortel Networks LTD), Merger Agreement (Nortel Networks Inc.)
Conduct Prior to Effective Time. Except as expressly contemplated consented to in writing by this Agreement or with the prior written consent of Parent, from and after the date of this Agreement until the earlier of the termination of this Agreement in accordance with its terms or the Effective Time, the Company shall, and shall cause each of its Subsidiaries to, act and carry on its business in the Ordinary Course of Business, pay its debts and Taxes and perform its other obligations when due (subject to good faith disputes over such debts, Taxes or obligations), comply in all material respects with all applicable laws, rules and regulations (including its obligations to make filings with the SEC), and use commercially reasonable efforts best efforts, consistent with past practices, to maintain and preserve its and each Subsidiary’s of its Subsidiaries’ business organization, assets, and properties, keep make reasonably available the services of its present Company Persons officers and employees (subject to any separation or termination of employment in the Ordinary Course of Business) and preserve its advantageous material business relationships with customers, strategic partners, suppliers, distributors and others having material business dealings with it to the end that its goodwill and ongoing business shall be unimpaired in all material respects at and after the Effective Time. Without limiting the generality of the foregoing, from and after the date of this Agreement until the earlier of the termination of this Agreement in accordance with its terms or the Effective Time, except as specifically set forth in Section 5.1 of the Company Disclosure Schedule or as otherwise contemplated by this Agreement, the Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, do any of the following without the prior written consent of the Parent, provided that in the case of paragraphs (e), (f), (i), (j), (k), (l), (m), (n), (p), (q), (r) and (s) below, such prior written consent of the Parent shall not be unreasonably withheld or conditioned:
(a) (i) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, securities or other property) in respect of, any of its capital stockstock (other than dividends and distributions by a direct or indirect wholly owned Subsidiary of the Company to its parent); (ii) 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 for shares of its capital stock or any of its other securities; or (iii) purchase, redeem or otherwise acquire any shares of its capital stock or any other securities or any rights, warrants or options (other than the forfeiture (at no cost to the Company or its Subsidiaries) of Company Stock Options pursuant to any Company Stock Plan, by employees in connection with the termination of such employee’s employment) to acquire any such shares or other securities except, in the case of this clause (iii), for (A) the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or securities partial payment of the value of which is measured exercise price payable by such securitiesholder upon exercise of Company Stock Options to the extent required under the terms of such Company Stock Options as in effect on the date hereof; or (B) from former employees, directors and consultants in accordance with agreements as in effect on the date hereof providing for the repurchase of shares in connection with any termination of services to the Company or any of its Subsidiaries;
(b) issue, deliver, sell, grant, pledge or otherwise dispose of or encumber any shares of its capital stock, any other voting securities or any securities convertible into or exchangeable for, or any rights, warrants or options to acquire, any such shares, voting securities or convertible or exchangeable securities, “phantom” stock, “phantom” stock rights, stock appreciation rights or stock-based performance units or securities the value of which is measured by such securities (other than the issuance of shares of Company Common Stock upon the exercise of Company Stock Options to the extent outstanding on the date of this Agreement in accordance with their present terms), issue or accept contributions for the purchase of shares of Company Common Stock pursuant to the ESPP, or amend the terms of any of the foregoing, except as expressly contemplated by Section 3.3 of this Agreement;.
(c) amend its Certificate certificate of Incorporationincorporation, Byby-laws or other comparable charter or organizational documents, except as expressly provided by this Agreement;
(d) acquire (Ai) by merging or consolidating with, or by purchasing all or a substantial portion of the assets or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other Person business organization or division thereof or (Bii) any assets that are material, in the aggregate, to the Company and its Subsidiaries, taken as a whole, except purchases of inventory and components in the Ordinary Course of Business;
(e) except in the Ordinary Course of Business, sell, lease, license, pledge, or otherwise dispose of or encumber any properties or assets of the Company or of any of its Subsidiaries;
(f) whether or not in the Ordinary Course of Business, sell, dispose of, license, or otherwise transfer any assets material to the Company and its Subsidiaries, taken as a whole (including any accounts, leases, Contracts contracts or Intellectual Property or any assets or the stock of any Subsidiaries), except sales of inventory or licenses of software in the Ordinary Course of Business and transfers among the Company and its directly or indirectly wholly owned Subsidiaries;
(g) amend, alter, or terminate the Company Rights Plan, make any determination that the Parent or the Merger Sub is an Adverse Person under the Company Rights Plan, take any other action that would cause the rights granted under the Company Rights Plan not to expire immediately prior to the Effective Time, or adopt or implement any new stockholder rights plan;
(h) except for a confidentiality agreement or as otherwise contemplated or permitted by Section 6.1, enter into a Contract an agreement with respect to any merger, consolidation, liquidation, dissolution, restructuring, recapitalization or other reorganization liquidation or business combination, or any acquisition or disposition of all or any substantial portion substantially all of the assets or securities of the Company or any of its Subsidiaries;
(i) (i) incur or suffer to exist any indebtedness for borrowed money other than such indebtedness reflected on the Company Balance Sheet or guarantee any such indebtedness of another Personperson, (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Personperson, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans or loans, advances (in each case other than for employee travel or other business purposes or for employee tuition reimbursement in each case routine advances to employees of the Company in the Ordinary Course of Business) or capital contributions to, or investments in, any other Personperson, other than the Company or any of its direct or indirect wholly owned Subsidiaries Subsidiaries, or (iv) enter into any hedging agreement or other financial agreement or arrangement designed to protect the value of which may change with Company or its Subsidiaries against fluctuations in commodities or equitiesprices, prices or exchange rates or other derivative instrumentsinterest rates;
(j) make any individual capital expenditure or other expenditure with respect to property, plant or equipment in excess of $100,000, or make capital expenditures or other expenditures with respect to property, plant or equipment in excess of $100,000 500,000 in the aggregate for the Company and its Subsidiaries, taken as a whole;
(k) make any material change in its accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve or revalue any assets, or make any change in its fiscal yearreserve;
(il) pay, discharge, settle, satisfy, fund settle or accept satisfy any claims, liabilities, disputes, audit or investigation finding or result liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of claims, liabilities or obligations in the Ordinary Course of Business or in accordance with their terms as in effect on the date of this Agreement;
(m) materially modify, of claims, liabilities materially amend or obligations reflected or reserved against in, the most recent consolidated financial statements (or the notes thereto) of the Company included in the Company SEC Reports filed prior to the date of this Agreement (to the extent so reflected or reserved against), or (ii) waive terminate any material benefits of, modify in any adverse respect, fail to enforce, or consent to any matter with respect to which its consent is required under, any confidentiality, standstill or similar Contracts contract to which the Company or any of its Subsidiaries is a party;
(m) terminate any party that is material Contract to which the Company or any of and its Subsidiaries is party, taken as a whole or knowingly waive, release or assign any material rights or claims (including any write-off or other compromise of any accounts receivable of the Company or any of its Subsidiaries);
(n) enter into any contract that is material to the Company and its Subsidiaries taken as a whole, except in connection with the sale of inventory, provision of services or except licensing of software to end user customers pursuant to Outbound License Agreements in each case in the Ordinary Course of Business modify or amend any material Contract to which the Company or any of its Subsidiaries is party;
(i) except in the Ordinary Course of Business enter into, or modify the terms of, any Contract relating to the rendering of services or the distribution, sale or marketing by third parties of the products of, or products licensed by, the Company or any of its Subsidiaries or (ii) license, or modify the terms of any license of, any material intellectual property rights to or from any third party, other than non-exclusive licenses which may be canceled without penalty by the Company or its Subsidiaries upon written notice of thirty (30) days or lessBusiness;
(o) except as expressly provided by (1) required to comply with applicable law or pursuant to agreements, plans or arrangements existing on the date hereof, (2) specifically required elsewhere in this Agreement or (3) disclosed in Section 3.35.1(o) of the Company Disclosure Schedule, (i) take any action with respect to, adopt, enter into, terminate or amend any employment, severance or similar agreement, policy, practice or arrangement agreement or benefit plan or compensation for the benefit or welfare of any current or former Company Person director, officer, employee or consultant or any collective bargaining agreement (including with respect to the existing collective bargaining agreement of Integrated Information Technology Corporation (a Subsidiary of the Company), make any offer or take any bargaining position without Parent’s prior written consent, which consent shall not be unreasonably withheld)agreement, (ii) increase in any material respect the compensation or fringe benefits of, or pay any bonus to, any Company Persondirector, officer, employee or consultant, (iii) amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or any restricted stock awardsstock, (iv) pay any material benefit not provided for as of the date of this Agreement under any Company Employee Plan, benefit plan or (v) grant any awards under, or otherwise expand the benefits of or the persons entitled to participate in, any bonus, incentive, performance or other compensation plan or arrangement or benefit or compensation plan, policy, practice or arrangement (including the Company’s Executive Severance Plan, and offer additional persons the opportunity to participate in, or to participate in, the Company’s Executive Severance Plan), including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, (vi) terminate the employment or take other adverse actions with respect to any of the Company executives and other employees identified in Section 6.1(o) of the Company Disclosure Schedules (the “Key Employees”), (vii) employ or offer to employ or promote or offer to promote, terminate or give notice of intent to terminate, any Person at Pay Grade 8 or above (or its equivalent for Subsidiaries using a different pay scale) (based upon the Company’s or its Subsidiaries’ respective existing pay scales) or (viii) take any action (other than (x) in the Ordinary Course of Business with respect to payment of compensation or (y) pursuant to retention agreements entered into prior to December 31, 2004) to fund or in any other way secure the payment of compensation or benefits under any Employee Plan employee plan, agreement, contract or Contractarrangement or benefit plan;
(p) hire any new employees, except to fill a vacancy (iincluding current vacancies set forth in Section 5.1(p) of the Company Disclosure Schedule);
(q) make or rescind change any Tax election, (ii) change an annual accounting period, file any amendment to any Tax Return, enter into any closing agreement, waive or extend any statute of limitations with respect to Taxes, settle or compromise any Tax liability, (iii) amend claim or assessment, surrender any right to claim a refund of Taxes or take any other similar action relating to the filing of any Tax Return, (iv) make a request for a written ruling Return or the payment of a taxing authority relating to Taxes or file a request for a pre-filing agreement or similar procedure or (v) enter into a legally binding agreement with a taxing authority with respect to Taxesany Tax;
(qr) close (except pursuant to the existing terms of leases disclosed in Section 4.12(b) of the Company Disclosure Schedule entered into prior to the date of this Agreement (and without giving effect to the transactions contemplated by this Agreement)) or open any material facility or office, or initiate, compromise or settle any material Proceeding;
(r) permit any transfer litigation or exercise arbitration proceeding other than in the Ordinary Course of rights with respect to shares of Company Common Stock in violation of the Stockholder AgreementsBusiness;
(s) open or close any facility or office or enter into or amend any lease for real property;
(t) fail to maintain insurance at levels substantially comparable to levels existing as of the date of this Agreement or to timely file claims thereunder (provided that the Company shall not pay or incur liability for any materially increased premium without Parent’s consent, not to be unreasonably withheld)Agreement;
(tu) fail to pay accounts payable and other obligations in the Ordinary Course of Business;
(u) agree to any covenant of the Company or any of its Subsidiaries not to compete or other covenant of the Company or any of its Subsidiaries restricting the development, manufacture, marketing or distribution of the products or services of the Company or any of its Subsidiaries or otherwise limiting the freedom of the Company or any of its Subsidiaries to compete in any line of business (other than conflict of interest requirements that are included in any outstanding Bid as of the date hereof, as disclosed in Section 6.1(u) of the Company Disclosure Schedule, that may become effective without the right of negotiation or refusal by Company or its Subsidiaries, by virtue of such Bid being accepted) or with any Person or in any area or to own, operate, sell, transfer, pledge or otherwise dispose of or encumber any material assets or that would so limit the freedom of Parent or any of its affiliates after the consummation of the Offer or the Merger;
(v) with respect to Building, permit Building to take any of the actions listed in paragraphs (a) through (u) of this Section 6.1, to the extent reasonably within the Company’s control, and without limiting the scope of the foregoing, authorize or agree to any such action in the Company’s capacity as a member of Building; or
(wv) authorize any of, or commit or agree, in writing or otherwise, to take any of, the foregoing actions or any action which would cause any representation or warranty of the Company set forth in this Agreement to be inaccurate under the applicable standard included in paragraph (vi)(E) of Annex I, or would materially impair the ability to satisfy, or prevent the satisfaction of of, any condition in Annex I or Article VIIIVII of this Agreement.
Appears in 2 contracts
Samples: Merger Agreement (Performance Technologies Inc \De\), Merger Agreement (Sonus Networks Inc)
Conduct Prior to Effective Time. Except as expressly contemplated by this Agreement Agreement, as set forth in Section 6.1 of the Company Disclosure Schedule or with the prior written consent of ParentParent (which, in the cases of Sections 6.1(i), (j), (l), (m), (q) and (s), shall not be unreasonably withheld or delayed), from and after the date of this Agreement until the earlier of the termination of this Agreement in accordance with its terms or the Effective Time, the Company shall, and shall cause each of its Subsidiaries to, act in the Ordinary Course of Business, and use commercially reasonable efforts to maintain and preserve its and each Subsidiary’s business organization, assets, and properties, keep available the services of its present Company Persons and preserve its advantageous business relationships with customers, strategic partners, suppliers, distributors and others having business dealings with it to the end that its goodwill and ongoing business shall be unimpaired at the Effective Timeit. Without limiting the generality of the foregoing, from and after the date of this Agreement until the earlier of the termination of this Agreement in accordance with its terms or the Effective Time, the Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, without the prior written consent of Parent:Parent (which, in the cases of Sections 6.1(i), (j), (l), (m), (q) and (s), shall not be unreasonably withheld or delayed):
(a) (i) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, securities or other property) in respect of, any of its capital stock; (ii) 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 for shares of its capital stock or any of its other securities; or (iii) purchase, redeem or otherwise acquire any shares of its capital stock or any other securities or any rights, warrants or options (other than the forfeiture (at no cost to the Company or its Subsidiaries) of Company Stock Options pursuant to any Company Stock Plan, by employees in connection with the termination of such employee’s employment) to acquire any such shares or other securities or securities the value of which is measured by such securities;
(b) issue, deliver, sell, grant, pledge or otherwise dispose of or encumber any shares of its capital stock, any other voting securities or any securities convertible into or exchangeable for, or any rights, warrants or options to acquire, any such shares, voting securities or convertible or exchangeable securities, “phantom” stock, “phantom” stock rights, stock appreciation rights or stock-based performance units or securities the value of which is measured by such securities (other than the issuance of shares of Company Common Stock upon the exercise of Company Stock Options or Company Stock Awards outstanding on the date of this Agreement in accordance with their present terms), issue or accept contributions for the purchase of shares of Company Common Stock pursuant to the ESPP, or amend the terms of any of the foregoing, except as expressly contemplated by Section 3.3 of this Agreement;
(c) amend its Certificate (or permit any of its Subsidiaries to amend their respective) Articles of Incorporation, By-laws Bylaws or other comparable charter or organizational documents, except as expressly provided by this Agreement;
(d) acquire (A) by merging or consolidating with, or by purchasing all or a substantial portion of the assets or any stock of, or by any other manner, any business or any other Person or division thereof or (B) any assets that are material, in the aggregate, to the Company and its Subsidiaries, taken as a whole, except purchases of inventory and components in the Ordinary Course of Business;
(e) except in the Ordinary Course of Business, sell, lease, license, pledge, or otherwise dispose of or encumber any properties or assets of the Company or of any of its Subsidiaries;
(f) whether or not except for sales of inventory that are in the Ordinary Course of Business, sell, dispose of, or otherwise transfer any assets material to the Company and its Subsidiaries, taken as a whole (including any accounts, leases, Contracts or Intellectual Property or any assets or the stock of any Subsidiaries);
(g) adopt or implement any stockholder rights plan;
(h) except as contemplated in Sections 6.2(d) and 9.1(d)(i), enter into a Contract with respect to any merger, consolidation, liquidation, dissolution, restructuring, recapitalization or other reorganization or business combination, or any acquisition or disposition of all or any substantial portion of the assets or securities of the Company or any of its Subsidiaries;
(i) (i) incur or suffer to exist any new indebtedness for borrowed money money, other than such indebtedness as is reflected on the Company Balance Sheet or pursuant to existing lines of credit disclosed thereon, or guarantee any such indebtedness of another Person, (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans or advances (in each case other than for employee travel or other business purposes or for employee tuition reimbursement in each case in the Ordinary Course of Business) or capital contributions to, or investments in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries or (iv) except in the Ordinary Course of Business, enter into any hedging agreement or other financial agreement or arrangement the value of which may change with fluctuations in commodities or equities, prices or exchange rates or other derivative instruments;
(j) make any capital expenditures or other expenditures with respect to property, plant or equipment during any fiscal quarter period in excess of $100,000 300,000 in the aggregate for the Company and its Subsidiaries, taken as a whole;
(k) make any change in its accounting methods, principles or practices, except insofar as may have been be required by a change in GAAP or Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve or revalue any assets, or make any change in its fiscal year;
(l) other than in the Ordinary Course of Business, (i) pay, discharge, settle, satisfy, fund or accept any claims, liabilities, disputes, audit or investigation finding findings or result results or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise)) in existence as of the date hereof, other than in accordance with their terms as in effect on the date of this Agreement, of or claims, liabilities or obligations reflected or reserved against in, the most recent consolidated financial statements (or the notes thereto) of the Company included in the Company SEC Reports filed prior to the date of this Agreement (to the extent so reflected or reserved against), or (ii) waive any material benefits of, modify in any adverse respect, fail to enforce, or consent to any matter with respect to which its consent is required under, any confidentiality, standstill confidentiality or similar Contracts to which the Company or any of its Subsidiaries is a party;
(m) terminate any material Contract to which the Company or any of its Subsidiaries is partyparty (other than any such Contract that expires pursuant to its terms), or waive, release or assign any material rights or claims (including any write-off or other compromise of any accounts receivable of the Company or any of its Subsidiaries), or except in the Ordinary Course of Business modify or amend any material Contract to which the Company or any of its Subsidiaries is party;
(i) except in the Ordinary Course of Business enter into, or modify the terms of, any Contract relating to the rendering of services or the distribution, sale or marketing by third parties of the products of, or products licensed by, the Company or any of its Subsidiaries or (ii) license, or modify the terms of any license of, any material intellectual property rights to or from any third party, other than non-exclusive licenses which may be canceled without penalty by the Company or its Subsidiaries upon written notice of thirty (30) days or less;
(o) except as expressly provided by Section 3.33.3 or as may be required by applicable Law, (i) take any action with respect to, adopt, enter into, terminate or amend any employment, severance or similar agreement, policy, practice or arrangement or benefit plan or compensation for the benefit or welfare of any current or former Company Person (other than in the Ordinary Course of Business with respect to any employment-related actions taken with respect to a current or former Company Person) or any collective bargaining agreement (including with respect to the existing collective bargaining agreement of Integrated Information Technology Corporation (a Subsidiary of the Company), make any offer or take any bargaining position without Parent’s prior written consent, which consent shall not be unreasonably withheld)agreement, (ii) increase in any material respect the compensation or benefits of, or or, other than as may be required under an existing Contract, pay any bonus to, any Company Person, (iii) amend or accelerate the right to payment or vesting of any compensation or benefits, including any outstanding options or any restricted stock awards, (iv) pay any material benefit not provided for as of the date of this Agreement under any Company Employee Plan, (v) adopt, grant any awards under, or otherwise expand the benefits of or the persons entitled to participate in, any bonus, incentive, performance performance, severance or other compensation plan or arrangement or benefit or compensation plan, policy, practice or arrangement (including the Company’s Executive Severance Plan, and offer additional persons the opportunity to participate in, or to participate in, the Company’s Executive Severance Plan)arrangement, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, (vi) terminate the employment or take other adverse actions with respect to any of the Company executives and other employees identified in Section 6.1(o) of the Company Disclosure Schedules (the “Key Employees”)Schedule, (vii) employ or offer to employ or promote or offer to promote, terminate or give notice of intent to terminate, any executive officer of the Company or Person at Pay Grade 8 or above (or its performing an equivalent function for Subsidiaries using a different pay scale) (based upon any of the Company’s or its Subsidiaries’ respective existing pay scales) , or (viii) take any action (other than (x) in the Ordinary Course of Business with respect to payment of compensation or (y) pursuant to retention agreements entered into prior to December 31, 2004compensation) to fund or in any other way secure the payment of compensation or benefits under any Employee Plan or Contract;
(p) (i) make or rescind any Tax election, (ii) settle or compromise any Tax liability, (iii) amend any Tax Return, (iv) make a request for a written ruling of a taxing authority relating to Taxes or file a request for a pre-filing agreement or similar procedure or (v) enter into a legally binding agreement with a taxing authority with respect to Taxes;
(q) close (except pursuant to the existing terms of leases disclosed in Section 4.12(b) of the Company Disclosure Schedule entered into prior to the date of this Agreement (and without giving effect to the transactions contemplated by this Agreement)) or open any material facility or office, or initiate, compromise or settle any material Proceeding;
(r) permit authorize any transfer or exercise of rights with respect to any shares of Company Common Stock in violation of the Stockholder AgreementsAgreements or authorize the removal of any legend restricting the transfer of such shares;
(s) fail to maintain insurance at levels substantially comparable to levels existing as of the date of this Agreement or to timely file claims thereunder (provided that the Company shall not pay or incur liability for any materially increased premium without Parent’s consent, not to be unreasonably withheld);
(t) fail to pay accounts payable and other obligations in the Ordinary Course of Business;
(u) other than pursuant to the terms of supplier and distribution agreements entered into in the Ordinary Course of Business, agree to any covenant of the Company or any of its Subsidiaries not to compete or other covenant of the Company or any of its Subsidiaries restricting the development, manufacture, marketing or distribution of the products or services of the Company or any of its Subsidiaries or otherwise limiting in any material respect the freedom of the Company or any of its Subsidiaries to compete in any line of business (other than conflict of interest requirements that are included in any outstanding Bid as of the date hereof, as disclosed in Section 6.1(u) of the Company Disclosure Schedule, that may become effective without the right of negotiation or refusal by Company or its Subsidiaries, by virtue of such Bid being accepted) or with any Person or in any area or to own, operate, sell, transfer, pledge or otherwise dispose of or encumber any material assets or that would so limit the freedom of Parent or any of its affiliates after the consummation of the Offer or the Merger;
(v) with respect to Building, permit Building to take any of the actions listed in paragraphs (a) through (u) of this Section 6.1, to the extent reasonably within the Company’s control, and without limiting the scope of the foregoing, authorize or agree to any such action in the Company’s capacity as a member of Building; or
(wv) authorize any of, or commit or agree, in writing or otherwise, to take any of, the foregoing actions or any action which would cause any representation or warranty of the Company set forth described in this Agreement to be inaccurate under the applicable standard included in paragraph (vi)(Ea) of Annex I, or would materially impair or prevent the satisfaction of any condition in Annex I or Article VIIIthrough (u) above.
Appears in 2 contracts
Samples: Merger Agreement (Bell Microproducts Inc), Merger Agreement (Avnet Inc)
Conduct Prior to Effective Time. Except as a result of entering into or as expressly contemplated by this Agreement or with any Disclosure Schedule relating to this Article 5, the Company covenants and agrees that, unless the Parent shall otherwise agree in writing, prior written consent of Parent, from and after the date of this Agreement until the earlier of the termination of this Agreement in accordance with its terms or to the Effective Time, the business of the Company shalland its Subsidiaries shall in all material respects be conducted only in, and shall cause each of the Company and its Subsidiaries toshall not take any material action except in, act in the Ordinary Course ordinary course of Businessbusiness and consistent with past practice, and the Company shall use commercially all reasonable efforts efforts, consistent with past practice, to maintain and preserve its and each Subsidiary’s 's business organization, assets, employees and properties, keep available the services of its present Company Persons and preserve its advantageous business relationships with customers, strategic partners, suppliers, distributors and others having business dealings with it to the end that its goodwill and ongoing business shall be unimpaired at the Effective Timerelationships. Without limiting the generality of the foregoing, during the period from and after the date of this Agreement until the earlier of the termination of this Agreement in accordance with its terms or the Effective Time, except as a result of entering into or as expressly contemplated by this Agreement or any Disclosure Schedule
(i) other than dividends and distributions by a direct or indirect wholly owned subsidiary of the Company shall not, and shall not permit any of to its Subsidiaries to, directly or indirectly, without the prior written consent of Parent:
parent: (a) (iA) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, securities stock or other property) in respect of, any of its capital stock; (iiB) 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 for of shares of its capital stock or any of its other securitiesstock; or (iiiC) purchase, redeem or otherwise acquire any shares of its capital stock or any other securities thereof or any rights, warrants or options (other than the forfeiture (at no cost to the Company or its Subsidiaries) of Company Stock Options pursuant to any Company Stock Plan, by employees in connection with the termination of such employee’s employment) to acquire any such shares or other securities securities, other than the payment to holders of Company Options outstanding on the date hereof of an amount equal to the difference between the price per Share to be paid in the Offer and the exercise price of such Company Option in exchange for the cancellation or securities the value termination of which is measured by such securitiesCompany Option;
(bii) issue, deliver, sell, grant, pledge or otherwise dispose of or encumber any shares of its capital stock, any other voting securities or any securities convertible into or exchangeable forinto, or any rights, warrants or options to acquire, any such shares, voting securities or convertible or exchangeable securities, “phantom” stock, “phantom” stock rights, stock appreciation rights or stock-based performance units or securities the value of which is measured by such securities (other than the issuance of shares of Company Common Stock Shares upon the exercise of Company Stock Options or conversion of Convertible Notes outstanding on the date of this Agreement in accordance with their present terms), issue or accept contributions for the purchase of shares of Company Common Stock pursuant to the ESPP, or amend the terms of any of the foregoing, except as expressly contemplated by Section 3.3 of this Agreement;
(ciii) amend its Certificate of Incorporation, Incorporation or By-laws or other comparable charter or organizational documents, except as expressly provided by this Agreement;
(div) acquire or agree to acquire (A) by merging or consolidating with, or by purchasing all or a substantial portion of the assets or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other Person business organization or division thereof or (B) any assets that are material, in the aggregate, to the Company and its the Subsidiaries, taken as a whole, except purchases of inventory and components in the Ordinary Course ordinary course of Businessbusiness consistent with past practice;
(ev) except in the Ordinary Course ordinary course of Businessbusiness and consistent with past practice, sell, lease, license, pledge, pledge or otherwise dispose of or encumber any properties or assets of the Company or of any of its SubsidiariesSubsidiaries (including any indebtedness owned to them or any claims held by them);
(fvi) whether or not in the Ordinary Course ordinary course of Businessbusiness or consistent with past practice, sell, sell or dispose of, or otherwise transfer of any assets material to the Company and its Subsidiaries, taken as a whole (including any accounts, leases, Contracts contracts or Intellectual Property intellectual property or any assets or the stock of any Subsidiaries, but excluding the sale of products in the ordinary course of business consistent with past practice);
(gvii) adopt or implement any stockholder rights plan;
(h) except as permitted by Section 6.5, enter into a Contract an agreement with respect to any merger, consolidation, liquidation, dissolution, restructuring, recapitalization or other reorganization liquidation or business combination, or any acquisition or disposition of all or any substantial portion substantially all of the assets or securities of the Company or any of its SubsidiariesCompany;
(iviii) (iA) incur or suffer to exist any indebtedness for borrowed money money, other than such indebtedness reflected on the Company Balance Sheet Permitted Indebtedness (as defined below), or guarantee any such indebtedness of another Personperson, (ii) issue, issue or sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Personperson, enter into any “"keep well” " or other agreement to maintain any financial statement condition of another Person person or enter into any arrangement having the economic effect of any of the foregoing, or (iiiB) make any loans or loans, advances (in each case other than for employee travel or other business purposes or for employee tuition reimbursement in each case to employees of the Company in the Ordinary Course ordinary course of Businessbusiness) or capital contributions to, or investments in, any other Person, person other than the Company or any of its direct or indirect wholly owned Subsidiaries or (iv) enter into any hedging agreement or other financial agreement or arrangement the value of which may change with fluctuations in commodities or equities, prices or exchange rates or other derivative instruments;
(j) make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $100,000 in the aggregate for between the Company and its SubsidiariesSubsidiaries or any of them. For purposes of this Section 5.1, taken "Permitted Indebtedness" means (I) indebtedness for borrowed money that existed as a whole;
(k) make any change in its accounting methodsof September 30, principles or practices, except insofar 1998 as may have been required by a change in GAAP or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve or revalue any assets, or make any change in its fiscal year;
(i) pay, discharge, settle, satisfy, fund or accept any claims, liabilities, disputes, audit or investigation finding or result or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than in accordance with their terms as in effect reflected on the date of this Agreement, of claims, liabilities or obligations reflected or reserved against in, the most recent consolidated financial statements (or the notes thereto) of the Company balance sheet included in the Company SEC Reports filed prior September 30, 1998 Financial Information, (II) indebtedness for borrowed money of not more than $2,000,000 incurred thereafter in the ordinary course of business and consistent with past practice under loan agreements in existence as of September 30, 1998, and (III) indebtedness for borrowed money in an amount not exceeding the total amount paid to the date holders of this Agreement (to the extent so reflected or reserved against), or (ii) waive any material benefits of, modify in any adverse respect, fail to enforce, or consent to any matter with respect to which its consent is required under, any confidentiality, standstill or similar Contracts to which the Company or any of its Subsidiaries is a party;
(m) terminate any material Contract to which the Company or any of its Subsidiaries is party, or waive, release or assign any material rights or claims (including any write-off or other compromise of any accounts receivable of the Company or any of its Subsidiaries), or except in the Ordinary Course of Business modify or amend any material Contract to which the Company or any of its Subsidiaries is party;
(i) except in the Ordinary Course of Business enter into, or modify the terms of, any Contract relating to the rendering of services or the distribution, sale or marketing by third parties of the products of, or products licensed by, the Company or any of its Subsidiaries or (ii) license, or modify the terms of any license of, any material intellectual property rights to or from any third party, other than non-exclusive licenses which may be canceled without penalty by the Company or its Subsidiaries upon written notice of thirty (30) days or less;
(o) except Options as expressly provided by Section 3.3, (i) take any action with respect to, adopt, enter into, terminate or amend any employment, severance or similar agreement, policy, practice or arrangement or benefit plan or compensation payment for the benefit cancellation or welfare termination of any current or former such Company Person or any collective bargaining agreement (including with respect to the existing collective bargaining agreement of Integrated Information Technology Corporation (a Subsidiary of the Company), make any offer or take any bargaining position without Parent’s prior written consent, which consent shall not be unreasonably withheld), (ii) increase in any material respect the compensation or benefits of, or pay any bonus to, any Company Person, (iii) amend or accelerate the right to payment or vesting of any compensation or benefits, including any outstanding options or any restricted stock awards, (iv) pay any material benefit not provided for Options as of the date of this Agreement under any Company Employee Plan, (v) grant any awards under, or otherwise expand the benefits of or the persons entitled to participate in, any bonus, incentive, performance or other compensation plan or arrangement or benefit or compensation plan, policy, practice or arrangement (including the Company’s Executive Severance Plan, and offer additional persons the opportunity to participate in, or to participate in, the Company’s Executive Severance Plan), including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, (vi) terminate the employment or take other adverse actions with respect to any of the Company executives and other employees identified described in Section 6.1(o) of the Company Disclosure Schedules (the “Key Employees”), (vii) employ or offer to employ or promote or offer to promote, terminate or give notice of intent to terminate, any Person at Pay Grade 8 or above (or its equivalent for Subsidiaries using a different pay scale) (based upon the Company’s or its Subsidiaries’ respective existing pay scales) or (viii) take any action (other than (x) in the Ordinary Course of Business with respect to payment of compensation or (y) pursuant to retention agreements entered into prior to December 31, 2004) to fund or in any other way secure the payment of compensation or benefits under any Employee Plan or Contract;
(p) (i) make or rescind any Tax election, (ii) settle or compromise any Tax liability, (iii) amend any Tax Return, (iv) make a request for a written ruling of a taxing authority relating to Taxes or file a request for a pre-filing agreement or similar procedure or (v) enter into a legally binding agreement with a taxing authority with respect to Taxes;
(q) close (except pursuant to the existing terms of leases disclosed in Section 4.12(b) of the Company Disclosure Schedule entered into prior to the date of this Agreement (and without giving effect to the transactions contemplated by this Agreement)) or open any material facility or office, or initiate, compromise or settle any material Proceeding;
(r) permit any transfer or exercise of rights with respect to shares of Company Common Stock in violation of the Stockholder Agreements;
(s) fail to maintain insurance at levels substantially comparable to levels existing as of the date of this Agreement or to timely file claims thereunder (provided that the Company shall not pay or incur liability for any materially increased premium without Parent’s consent, not to be unreasonably withheld5.1(i)(C);
(t) fail to pay accounts payable and other obligations in the Ordinary Course of Business;
(u) agree to any covenant of the Company or any of its Subsidiaries not to compete or other covenant of the Company or any of its Subsidiaries restricting the development, manufacture, marketing or distribution of the products or services of the Company or any of its Subsidiaries or otherwise limiting the freedom of the Company or any of its Subsidiaries to compete in any line of business (other than conflict of interest requirements that are included in any outstanding Bid as of the date hereof, as disclosed in Section 6.1(u) of the Company Disclosure Schedule, that may become effective without the right of negotiation or refusal by Company or its Subsidiaries, by virtue of such Bid being accepted) or with any Person or in any area or to own, operate, sell, transfer, pledge or otherwise dispose of or encumber any material assets or that would so limit the freedom of Parent or any of its affiliates after the consummation of the Offer or the Merger;
(v) with respect to Building, permit Building to take any of the actions listed in paragraphs (a) through (u) of this Section 6.1, to the extent reasonably within the Company’s control, and without limiting the scope of the foregoing, authorize or agree to any such action in the Company’s capacity as a member of Building; or
(w) authorize any of, or commit or agree, in writing or otherwise, to take any of, the foregoing actions or any action which would cause any representation or warranty of the Company set forth in this Agreement to be inaccurate under the applicable standard included in paragraph (vi)(E) of Annex I, or would materially impair or prevent the satisfaction of any condition in Annex I or Article VIII.
Appears in 2 contracts
Samples: Merger Agreement (Lumen Technologies Inc), Merger Agreement (Eg&g Inc)
Conduct Prior to Effective Time. Except as expressly contemplated consented to in writing by the Parent or as expressly required or prohibited by this Agreement or with the prior written consent of ParentAgreement, from and after the date of this Agreement until the earlier of the termination of this Agreement in accordance with its terms or the Effective Time, the Company shall, and shall cause each of its Subsidiaries to, act and carry on its business in the Ordinary Course of Business, pay its debts and Taxes and perform its other obligations when due (subject to good faith disputes over such debts, Taxes or obligations), comply in all material respects with all applicable laws, rules and regulations, and use commercially reasonable efforts best efforts, consistent with past practices, to maintain and preserve its and each Subsidiary’s of its Subsidiaries’ business organization, assets, and properties, keep available the services of its present Company Persons officers and employees and preserve its advantageous business relationships with customers, strategic partners, suppliers, distributors and others having business dealings with it to the end that its goodwill and ongoing business shall be unimpaired in all material respects at the Effective Time. Without limiting the generality of the foregoing, from and after the date of this Agreement until the earlier of the termination of this Agreement in accordance with its terms or the Effective Time, except as specifically set forth in Section 6.1 of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, do any of the following without the prior written consent of the Parent:
(a) (i) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, securities or other property) in respect of, any of its capital stockstock (other than dividends and distributions by a direct or indirect wholly owned Subsidiary of the Company to its parent); (ii) 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 for shares of its capital stock or any of its other securities; or (iii) purchase, redeem or otherwise acquire any shares of its capital stock or any other securities or any rights, warrants or options (other than the forfeiture (at no cost to the Company or its Subsidiaries) of Company Stock Options pursuant to any Company Stock Plan, by employees in connection with the termination of such employee’s employment) to acquire any such shares or other securities except, in the case of this clause (iii), for (A) the acquisition of shares of Company Common Stock from holders of (x) Company Stock Options in full or securities partial payment of the value of which is measured exercise price payable by such securitiesholder upon exercise of Company Stock Options to the extent required under the terms of such Company Stock Options as in effect on the date hereof or (y) Company RSAs or Company RSUs in full or partial payment of any withholding Tax obligations of such holder upon vesting of any such Company RSA or Company RSU to the extent required under the terms thereof as in effect on the date hereof; or (B) from former employees, directors and consultants in accordance with agreements as in effect on the date hereof providing for the repurchase of shares in connection with any termination of services to the Company or any of its Subsidiaries;
(b) issue, deliver, sell, grant, pledge or otherwise dispose of or encumber any shares of its capital stock, any other voting securities or any securities convertible into or exchangeable for, or any rights, warrants or options to acquire, any such shares, voting securities or convertible or exchangeable securities, “phantom” stock, “phantom” stock rights, stock appreciation rights or stock-based performance units or securities the value of which is measured by such securities (other than the issuance of shares of Company Common Stock upon the exercise of Company Stock Options or settlement of Company RSUs outstanding on the date of this Agreement in accordance with their present terms), issue or accept contributions for the purchase of shares of Company Common Stock pursuant to the ESPP, or amend the terms of any of the foregoing, except as expressly contemplated by Section 3.3 of this Agreement;
(c) amend its Certificate certificate of Incorporationincorporation, Byby-laws or other comparable charter or organizational documents, except as expressly provided by this Agreement;
(d) acquire (Ai) by merging or consolidating with, or by purchasing all or a substantial portion of the assets or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other Person business organization or division thereof or (Bii) any assets that are material, in the aggregate, to the Company and its Subsidiaries, taken as a whole, except purchases of inventory and components in the Ordinary Course of Business;
(e) except in the Ordinary Course of Business, sell, lease, license, pledge, or otherwise dispose of or encumber any material properties or assets of the Company or of any of its Subsidiaries;
(f) whether or not in the Ordinary Course of Business, sell, dispose of, license, or otherwise transfer any assets material to the Company and its Subsidiaries, taken as a whole (including any accounts, leases, Contracts contracts or Intellectual Property or any assets or the stock of any Subsidiaries), other than sales of inventory in the Ordinary Course of Business;
(g) adopt or implement any stockholder rights plan;
(h) except for a confidentiality agreement as permitted by Section 7.1, enter into a Contract an agreement with respect to any merger, consolidation, liquidation, dissolution, restructuring, recapitalization or other reorganization liquidation or business combination, or any acquisition or disposition of all or any substantial portion substantially all of the assets or securities of the Company or any of its Subsidiaries;
(i) (i) incur or suffer to exist any indebtedness for borrowed money other than such indebtedness reflected on the Company Balance Sheet or guarantee any such indebtedness of another PersonIndebtedness, (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Personperson, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans or loans, advances (in each case other than for employee travel or other business purposes or for employee tuition reimbursement in each case routine advances to employees of the Company in the Ordinary Course of Business) or capital contributions to, or investments in, any other Personperson, other than the Company or any of its direct or indirect wholly owned Subsidiaries (including, for the avoidance of doubt, any of the foregoing that would limit the ability of the Parent and the Purchaser to utilize any cash or cash equivalents of the Company and its Subsidiaries promptly after the Effective Time), or (iv) enter into any hedging agreement or other financial agreement or arrangement designed to protect the value of which may change with Company or its Subsidiaries against fluctuations in commodities or equitiesprices, prices or exchange rates or other derivative instrumentsinterest rates;
(j) make any individual capital expenditures expenditure or other expenditures expenditure with respect to property, plant or equipment in excess of $100,000 3,000,000, or make capital expenditures or other expenditures with respect to property, plan or equipment in excess of $10,000,000 in the aggregate for the Company and its Subsidiaries, taken as a whole;
(k) make any change in its accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve or revalue any assets, or make any change in its fiscal yearreserve;
(il) pay, discharge, settle, satisfy, fund settle or accept satisfy any claims, liabilities, disputes, audit or investigation finding or result 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 or in accordance with their terms as in effect on the date of this Agreement, of claims, liabilities or obligations (i) reflected or reserved against in, or contemplated by, the most recent consolidated financial statements (or the notes thereto) of the Company included in the Company SEC Reports Documents filed prior to the date of this Agreement (to the extent so reflected or reserved against), ) or (ii) waive any material benefits of, modify incurred since the date of such financial statements in any adverse respect, fail to enforce, or consent to any matter with respect to which its consent is required under, any confidentiality, standstill or similar Contracts to which the Company or any Ordinary Course of its Subsidiaries is a partyBusiness;
(m) materially modify or amend or terminate (prior to expiration) any material Contract to which the Company or any of its Subsidiaries is partyMaterial Contract, or knowingly waive, release or assign any material rights or claims thereunder;
(including i) enter into any write-off contract or agreement that, if entered into prior to the date hereof, would constitute a Company Material Contract (other compromise of any accounts receivable of the Company than end user or any of its Subsidiaries), or except customer contracts entered into in the Ordinary Course of Business modify that would constitute a Company Material Contract solely under clause (xiv) of Section 4.11(a)), (ii) enter into any agreement with any customer that is not terminable (or amend any material Contract to which that does not terminate by its terms) within two years after the date hereof without prepayment or penalty, or (iii) except for nonexclusive licenses granted in connection with the sale of products by the Company or any Subsidiary of its Subsidiaries is party;
(i) except the Company in the Ordinary Course of Business enter intoBusiness, or modify the terms of, any Contract relating to the rendering of services or the distribution, sale or marketing by third parties of the products of, or products licensed by, the Company or any of its Subsidiaries or (ii) license, or modify the terms of any license of, any material intellectual property rights Intellectual Property to or from any third party, other than non-exclusive licenses which may be canceled without penalty by the Company or its Subsidiaries upon written notice of thirty (30) days or less;
(o) except as expressly provided by required to comply with applicable law or agreements, plans or arrangements existing on the date hereof and disclosed in Section 3.36.1(o) of the Company Disclosure Schedule, (i) take any action with respect to, adopt, enter into, terminate or amend any employment, severance or similar agreement, policy, practice or arrangement agreement or benefit plan or compensation for the benefit or welfare of any current or former Company Person director, officer, employee or consultant or any collective bargaining agreement (including with respect to the existing collective bargaining agreement of Integrated Information Technology Corporation (a Subsidiary of the Company), make any offer or take any bargaining position without Parent’s prior written consent, which consent shall not be unreasonably withheld)agreement, (ii) increase in any material respect the compensation or fringe benefits of, or pay any bonus to, any Company Persondirector, officer, employee or consultant, (iii) amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options Company Stock Options, Company RSUs or any restricted stock awardsCompany RSAs, (iv) pay any material benefit not provided for as of the date of this Agreement under any Company Employee Planbenefit plan, (v) grant any awards under, or otherwise expand the benefits of or the persons entitled to participate in, under any bonus, incentive, performance or other compensation plan or arrangement or benefit or compensation plan, policy, practice or arrangement (including the Company’s Executive Severance Plan, and offer additional persons the opportunity to participate in, or to participate in, the Company’s Executive Severance Plan), including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or the removal of remove existing restrictions in any benefit plans or agreements or awards made thereunder, or (vi) terminate the employment or take other adverse actions with respect to any of the Company executives and other employees identified in Section 6.1(o) of the Company Disclosure Schedules (the “Key Employees”), (vii) employ or offer to employ or promote or offer to promote, terminate or give notice of intent to terminate, any Person at Pay Grade 8 or above (or its equivalent for Subsidiaries using a different pay scale) (based upon the Company’s or its Subsidiaries’ respective existing pay scales) or (viii) take any action (other than (x) in the Ordinary Course of Business with respect to payment of compensation or (y) pursuant to retention agreements entered into prior to December 31, 2004) to fund or in any other way secure the payment of compensation or benefits under any Employee Plan employee plan, agreement, contract or Contractarrangement or benefit plan;
(p) hire any new employees at the director-level or above;
(iq) make or rescind any material Tax election, (ii) settle or compromise any material Tax liability, (iii) liability or amend any material Tax Return, (iv) make a request for a written ruling of a taxing authority relating to Taxes or file a request for a pre-filing agreement or similar procedure or (v) enter into a legally binding agreement with a taxing authority with respect to Taxes;
(qr) close (except pursuant to the existing terms of leases disclosed in Section 4.12(b) of the Company Disclosure Schedule entered into prior to the date of this Agreement (and without giving effect to the transactions contemplated by this Agreement)) or open any material facility or office, or initiate, compromise or settle any material Proceeding;
(r) permit litigation or arbitration proceeding, or any transfer actual or exercise threatened litigation arising out of rights or in connection with respect to shares of Company Common Stock in violation any of the Stockholder AgreementsTransactions (except to enforce the Company’s rights hereunder);
(s) open or close any material facility or office;
(t) fail to maintain insurance at levels substantially comparable to levels existing as of the date of this Agreement or to timely file claims thereunder (provided that the Company shall not pay or incur liability for any materially increased premium without Parent’s consent, not to be unreasonably withheld)Agreement;
(tu) fail to pay accounts payable and other obligations in the Ordinary Course of Business;
(u) agree to any covenant of the Company or any of its Subsidiaries not to compete or other covenant of the Company or any of its Subsidiaries restricting the development, manufacture, marketing or distribution of the products or services of the Company or any of its Subsidiaries or otherwise limiting the freedom of the Company or any of its Subsidiaries to compete in any line of business Business (other than conflict of interest requirements that are included those contested in any outstanding Bid as of the date hereof, as disclosed in Section 6.1(u) of the Company Disclosure Schedule, that may become effective without the right of negotiation or refusal by Company or its Subsidiaries, by virtue of such Bid being accepted) or with any Person or in any area or to own, operate, sell, transfer, pledge or otherwise dispose of or encumber any material assets or that would so limit the freedom of Parent or any of its affiliates after the consummation of the Offer or the Mergergood faith);
(v) with respect to Building, permit Building to take convene any annual or special meeting of the actions listed in paragraphs (a) through (u) of this Section 6.1, to the extent reasonably within the Company’s control, and without limiting the scope of the foregoing, authorize or agree to any such action in the Company’s capacity as a member of Buildingstockholders; or
(w) authorize any of, or commit or agree, in writing or otherwise, to take any of, the foregoing actions or any action which would cause any representation or warranty of the Company set forth in this Agreement to be inaccurate under the applicable standard included in paragraph (vi)(E) of Annex I, or would materially impair or prevent the satisfaction of any condition in Annex I or Article VIIIactions.
Appears in 1 contract
Conduct Prior to Effective Time. Except as expressly contemplated consented to in writing by the Parent (which consent shall not be unreasonably withheld, delayed or conditioned) or as listed on Section 6.1 of the Company Disclosure Schedule or otherwise required by the terms of this Agreement or with the prior written consent of ParentAgreement, from and after the date of this Agreement until the earlier of the termination of this Agreement in accordance with its terms or the Effective Time, the Company shall, and shall cause each of its Subsidiaries to, act and carry on its business in the Ordinary Course of Businessusual, regular and ordinary course in substantially the same manner as previously conducted, pay its debts and Taxes and perform its other obligations when due (subject to good faith disputes over such debts, Taxes or obligations), comply in all material respects with all applicable laws, rules and regulations, and use commercially its reasonable efforts best efforts, consistent with past practices, to maintain and preserve its and each Subsidiary’s of its Subsidiaries’ business organization, assets, and properties, keep available the services of its present Company Persons officers and employees and preserve its advantageous business relationships with customers, strategic partners, suppliers, distributors and others having business dealings with it to the end that its goodwill and ongoing business shall be unimpaired at and after the Effective Time. Without limiting the generality of the foregoing, from and after the date of this Agreement until the earlier of the termination of this Agreement in accordance with its terms or the Effective Time, except as specifically set forth in Section 6.1 of the Company Disclosure Schedule or otherwise required by the terms of this Agreement, the Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, do any of the following without the prior written consent of the Parent:
(a) (i) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, securities or other property) in respect of, any of its capital stockstock (other than dividends and distributions by a direct or indirect wholly owned Subsidiary of the Company to its parent); (ii) split, combine or reclassify any of its capital stock or, except for the issuance of shares of Company Common Stock upon the exercise of any Company Stock Options, IDM Pharma S.A. Stock Options or Company Warrants outstanding on the date of this Agreement, issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or any of its other securities; or (iii) purchase, redeem or otherwise acquire any shares of its capital stock or any other of its securities or any rights, warrants or options (other than the forfeiture (at no cost to the Company or its Subsidiaries) of Company Stock Options pursuant to any Company Stock Plan, by employees in connection with the termination of such employee’s employment) to acquire any such shares or other securities except, in the case of this clause (iii), for (A) the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or securities partial payment of the value of which is measured exercise price payable by such securitiesholder upon exercise of Company Stock Options to the extent required under the terms of such Company Stock Options as in effect on the date hereof; (B) the acquisition of shares of IDM Pharma S.A. from holders of Company Stock Options subject to Option Liquidity Agreements in full or partial payment of the transfer consideration payable by such holder upon exercise of Company Stock Options subject to Option Liquidity Agreements to the extent required under the terms of such Company Stock Options and Option Liquidity Agreements as in effect on the date hereof; or (C) from former employees, directors and consultants in accordance with agreements providing for the repurchase of shares in connection with any termination of services to the Company or any of its Subsidiaries;
(b) issue, deliver, sell, grant, pledge or otherwise dispose of or encumber any shares of its capital stock, any other voting securities or any securities convertible into or exchangeable for, or any rights, warrants or options to acquire, any such shares, voting securities or convertible or exchangeable securities, “phantom” stock, “phantom” stock rights, stock appreciation rights or stock-based performance units or securities the value of which is measured by such securities (other than the issuance of shares of Company Common Stock upon the exercise of Company Stock Options outstanding on the date of this Agreement in accordance with their present terms), issue or accept contributions for the purchase of shares of Company Common Stock pursuant to the ESPP, or amend the terms of any of the foregoing, except as expressly contemplated by Section 3.3 of this Agreement;
(c) amend its Certificate of Incorporation, By-laws or other comparable charter or organizational documents, except as expressly provided by this Agreement;
(d) acquire (A) by merging or consolidating with, or by purchasing all or a substantial portion of the assets or any stock of, or by any other manner, any business or any other Person or division thereof or (B) any assets that are material, in the aggregate, to the Company and its Subsidiaries, taken as a whole, except purchases of inventory and components in the Ordinary Course of Business;
(e) except in the Ordinary Course of Business, sell, lease, license, pledge, or otherwise dispose of or encumber any properties or assets of the Company or of any of its Subsidiaries;
(f) whether or not in the Ordinary Course of Business, sell, dispose of, or otherwise transfer any assets material to the Company and its Subsidiaries, taken as a whole (including any accounts, leases, Contracts or Intellectual Property or any assets or the stock of any Subsidiaries);
(g) adopt or implement any stockholder rights plan;
(h) enter into a Contract with respect to any merger, consolidation, liquidation, dissolution, restructuring, recapitalization or other reorganization or business combination, or any acquisition or disposition of all or any substantial portion of the assets or securities of the Company or any of its Subsidiaries;
(i) (i) incur or suffer to exist any indebtedness for borrowed money other than such indebtedness reflected on the Company Balance Sheet or guarantee any such indebtedness of another Person, (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans or advances (in each case other than for employee travel or other business purposes or for employee tuition reimbursement in each case in the Ordinary Course of Business) or capital contributions to, or investments in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries or (iv) enter into any hedging agreement or other financial agreement or arrangement the value of which may change with fluctuations in commodities or equities, prices or exchange rates or other derivative instruments;
(j) make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $100,000 in the aggregate for the Company and its Subsidiaries, taken as a whole;
(k) make any change in its accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve or revalue any assets, or make any change in its fiscal year;
(i) pay, discharge, settle, satisfy, fund or accept any claims, liabilities, disputes, audit or investigation finding or result or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than in accordance with their terms as in effect on the date of this Agreement, of claims, liabilities or obligations reflected or reserved against in, the most recent consolidated financial statements (or the notes thereto) of the Company included in the Company SEC Reports filed prior to the date of this Agreement (to the extent so reflected or reserved against), or (ii) waive any material benefits of, modify in any adverse respect, fail to enforce, or consent to any matter with respect to which its consent is required under, any confidentiality, standstill or similar Contracts to which the Company or any of its Subsidiaries is a party;
(m) terminate any material Contract to which the Company or any of its Subsidiaries is party, or waive, release or assign any material rights or claims (including any write-off or other compromise of any accounts receivable of the Company or any of its Subsidiaries), or except in the Ordinary Course of Business modify or amend any material Contract to which the Company or any of its Subsidiaries is party;
(i) except in the Ordinary Course of Business enter into, or modify the terms of, any Contract relating to the rendering of services or the distribution, sale or marketing by third parties of the products of, or products licensed by, the Company or any of its Subsidiaries or (ii) license, or modify the terms of any license of, any material intellectual property rights to or from any third party, other than non-exclusive licenses which may be canceled without penalty by the Company or its Subsidiaries upon written notice of thirty (30) days or less;
(o) except as expressly provided by Section 3.3, (i) take any action with respect to, adopt, enter into, terminate or amend any employment, severance or similar agreement, policy, practice or arrangement or benefit plan or compensation for the benefit or welfare of any current or former Company Person or any collective bargaining agreement (including with respect to the existing collective bargaining agreement of Integrated Information Technology Corporation (a Subsidiary of the Company), make any offer or take any bargaining position without Parent’s prior written consent, which consent shall not be unreasonably withheld), (ii) increase in any material respect the compensation or benefits of, or pay any bonus to, any Company Person, (iii) amend or accelerate the right to payment or vesting of any compensation or benefits, including any outstanding options or any restricted stock awards, (iv) pay any material benefit not provided for as of the date of this Agreement under any Company Employee Plan, (v) grant any awards under, or otherwise expand the benefits of or the persons entitled to participate in, any bonus, incentive, performance or other compensation plan or arrangement or benefit or compensation plan, policy, practice or arrangement (including the Company’s Executive Severance Plan, and offer additional persons the opportunity to participate in, or to participate in, the Company’s Executive Severance Plan), including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, (vi) terminate the employment or take other adverse actions with respect to any of the Company executives and other employees identified in Section 6.1(o) of the Company Disclosure Schedules (the “Key Employees”), (vii) employ or offer to employ or promote or offer to promote, terminate or give notice of intent to terminate, any Person at Pay Grade 8 or above (or its equivalent for Subsidiaries using a different pay scale) (based upon the Company’s or its Subsidiaries’ respective existing pay scales) or (viii) take any action (other than (x) in the Ordinary Course of Business with respect to payment of compensation or (y) pursuant to retention agreements entered into prior to December 31, 2004) to fund or in any other way secure the payment of compensation or benefits under any Employee Plan or Contract;
(p) (i) make or rescind any Tax election, (ii) settle or compromise any Tax liability, (iii) amend any Tax Return, (iv) make a request for a written ruling of a taxing authority relating to Taxes or file a request for a pre-filing agreement or similar procedure or (v) enter into a legally binding agreement with a taxing authority with respect to Taxes;
(q) close (except pursuant to the existing terms of leases disclosed in Section 4.12(b) of the Company Disclosure Schedule entered into prior to the date of this Agreement (and without giving effect to the transactions contemplated by this Agreement)) or open any material facility or office, or initiate, compromise or settle any material Proceeding;
(r) permit any transfer or exercise of rights with respect to shares of Company Common Stock in violation of the Stockholder Agreements;
(s) fail to maintain insurance at levels substantially comparable to levels existing as of the date of this Agreement or to timely file claims thereunder (provided that the Company shall not pay or incur liability for any materially increased premium without Parent’s consent, not to be unreasonably withheld);
(t) fail to pay accounts payable and other obligations in the Ordinary Course of Business;
(u) agree to any covenant of the Company or any of its Subsidiaries not to compete or other covenant of the Company or any of its Subsidiaries restricting the development, manufacture, marketing or distribution of the products or services of the Company or any of its Subsidiaries or otherwise limiting the freedom of the Company or any of its Subsidiaries to compete in any line of business (other than conflict of interest requirements that are included in any outstanding Bid as of the date hereof, as disclosed in Section 6.1(u) of the Company Disclosure Schedule, that may become effective without the right of negotiation or refusal by Company or its Subsidiaries, by virtue of such Bid being accepted) or with any Person or in any area or to own, operate, sell, transfer, pledge or otherwise dispose of or encumber any material assets or that would so limit the freedom of Parent or any of its affiliates after the consummation of the Offer or the Merger;
(v) with respect to Building, permit Building to take any of the actions listed in paragraphs (a) through (u) of this Section 6.1, to the extent reasonably within the Company’s control, and without limiting the scope of the foregoing, authorize or agree to any such action in the Company’s capacity as a member of Building; or
(w) authorize any of, or commit or agree, in writing or otherwise, to take any of, the foregoing actions or any action which would cause any representation or warranty of the Company set forth in this Agreement to be inaccurate under the applicable standard included in paragraph (vi)(E) of Annex I, or would materially impair or prevent the satisfaction of any condition in Annex I or Article VIII.Options,
Appears in 1 contract
Samples: Merger Agreement (Idm Pharma, Inc.)
Conduct Prior to Effective Time. Except as expressly contemplated by this Agreement or with the prior written consent of Parent, from The Company covenants and after --------------------------------- agrees between the date of this Agreement until and the earlier Effective Time or date of the termination of this Agreement, as the case may be, except as permitted or required by this Agreement or as Buyer may otherwise consent in accordance with its terms or writing, to:
(a) operate the Effective Time, business of the Company shall, and shall cause each of its Subsidiaries to, act only in the Ordinary Course of Businessusual, regular and ordinary manner, consistent with past practice and use commercially reasonable its best efforts to maintain and (I) preserve its and each Subsidiary’s the present business organizationorganization of the Company intact, assets, and properties, (II) keep available the services of its the present employees of the Company Persons who are listed on Exhibit 2.15, and (III) preserve its advantageous the current business relationships of the Company with customers, strategic partners, suppliers, distributors and others having business dealings with it to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time. Without limiting the generality of the foregoing, from and after the date of this Agreement until the earlier of the termination of this Agreement in accordance with its terms or the Effective Time, the Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, without the prior written consent of Parent:
(a) (i) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, securities or other property) in respect of, any of its capital stock; (ii) 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 for shares of its capital stock or any of its other securities; or (iii) purchase, redeem or otherwise acquire any shares of its capital stock or any other securities or any rights, warrants or options (other than the forfeiture (at no cost to the Company or its Subsidiaries) of Company Stock Options pursuant to any Company Stock Plan, by employees in connection with the termination of such employee’s employment) to acquire any such shares or other securities or securities the value of which is measured by such securitiesit;
(b) issuebear the risk of loss or damage to the assets on and prior to the Effective Time where such risk of loss is not the legal obligation of another, deliverand maintain all properties and assets, selltangible or intangible, grant, pledge or otherwise dispose of or encumber any shares of its capital stock, any other voting securities or any securities convertible into or exchangeable for, or any rights, warrants or options to acquire, any such shares, voting securities or convertible or exchangeable securities, “phantom” stock, “phantom” stock rights, stock appreciation rights or stock-based performance units or securities the value of which is measured by such securities (other than the issuance of shares of Company Common Stock upon the exercise of Company Stock Options outstanding on the date of this Agreement in accordance with their present terms), issue or accept contributions necessary for the purchase of shares of Company Common Stock pursuant to the ESPP, or amend the terms of any conduct of the foregoingbusiness of the Company, except as expressly contemplated by Section 3.3 of this Agreementwhether owned or leased;
(c) amend its Certificate maintain the books, records and accounts of Incorporationthe Company in the usual, By-laws or other comparable charter or organizational documentsregular and ordinary manner, except as expressly provided by this Agreementon a basis consistent with prior periods;
(d) acquire (A) by merging or consolidating with, or by purchasing duly comply with all or a substantial portion of the assets or any stock of, or by any other manner, any business or any other Person or division thereof or (B) any assets that are material, in the aggregate, laws which apply to the Company and to the conduct of its Subsidiaries, taken as a whole, except purchases of inventory and components in the Ordinary Course of Businessbusiness;
(e) except in perform all of the Ordinary Course obligations of Businessthe Company without default, unless such default is of no significance to the Company and could have no adverse impact on the Company, its assets or business;
(f) not (I) amend the Company's Articles of Incorporation or by-laws; (II) merge with or into, consolidate, amalgamate or otherwise combine with, any other entity, or agree to do any of the foregoing; or (III) change the character of the business of the Company;
(g) not (I) encumber, mortgage, or voluntarily subject to lien any of the existing assets; (II) transfer, sell, lease, license, pledge, license or otherwise dispose of any of, or encumber any properties part of, the assets except in the ordinary course of business, and consistent with past practice; (III) convey, transfer or acquire any assets or property to, for or on behalf of the Company, other than in the ordinary course of business, consistent with past practice; (IV) enter into any arrangement, agreement or undertaking, with respect to any of the Company's employees relating to the payment of any bonus, severance, profit-sharing or special compensation or any increase in the compensation payable or to become payable to any such employee; or (V) incur any material fixed or contingent obligation or enter into any agreement, commitment, contract or other transaction or arrangement relating to the business of the Company or of any of its Subsidiaries;
(f) whether or not in the Ordinary Course of Business, sell, dispose of, or otherwise transfer any assets material to the Company and its Subsidiaries, taken as a whole (including any accounts, leases, Contracts or Intellectual Property or any assets or the stock of any Subsidiaries);
(g) adopt or implement any stockholder rights planassets;
(h) enter into a Contract except in the ordinary course of business and consistent with respect to any merger, consolidation, liquidation, dissolution, restructuring, recapitalization or other reorganization or business combination, or any acquisition or disposition of all or any substantial portion of the assets or securities of the Company or any of its Subsidiaries;
(i) (i) incur or suffer to exist any indebtedness for borrowed money other than such indebtedness reflected on the Company Balance Sheet or guarantee any such indebtedness of another Personpast practice, (iiI) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of license agreement with respect to Company Intellectual Property with any of the foregoing, (iii) make any loans person or advances (in each case other than for employee travel or other business purposes or for employee tuition reimbursement in each case in the Ordinary Course of Business) or capital contributions to, or investments in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries entity or (ivII) buy or enter into any hedging license agreement or other financial agreement or arrangement the value of which may change with fluctuations in commodities or equities, prices or exchange rates or other derivative instruments;
(j) make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $100,000 in the aggregate for the Company and its Subsidiaries, taken as a whole;
(k) make any change in its accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve or revalue any assets, or make any change in its fiscal year;
(i) pay, discharge, settle, satisfy, fund or accept any claims, liabilities, disputes, audit or investigation finding or result or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than in accordance with their terms as in effect on the date of this Agreement, of claims, liabilities or obligations reflected or reserved against in, the most recent consolidated financial statements (or the notes thereto) of the Company included in the Company SEC Reports filed prior to the date of this Agreement (to the extent so reflected or reserved against), or (ii) waive any material benefits of, modify in any adverse respect, fail to enforce, or consent to any matter with respect to which its consent is required under, any confidentiality, standstill or similar Contracts to which the Company or any of its Subsidiaries is a party;
(m) terminate any material Contract to which the Company or any of its Subsidiaries is party, or waive, release or assign any material rights or claims (including any write-off or other compromise Intellectual Property of any accounts receivable of the Company person or any of its Subsidiaries), or except in the Ordinary Course of Business modify or amend any material Contract to which the Company or any of its Subsidiaries is partyentity;
(i) except in the Ordinary Course ordinary course of Business enter intobusiness and consistent with past practice, transfer to any person or modify the terms of, entity any Contract relating to the rendering of services or the distribution, sale or marketing by third parties of the products of, or products licensed by, the Company or any of its Subsidiaries or (ii) license, or modify the terms of any license of, any material intellectual property rights to or from any third party, other than non-exclusive licenses which may be canceled without penalty by the Company or its Subsidiaries upon written notice of thirty (30) days or lessIntellectual Property;
(oj) except as expressly provided by Section 3.3, commence any litigation or settle (iI) take any action with respect to, adopt, enter into, terminate litigation for $50,000 or amend any employment, severance or similar agreement, policy, practice or arrangement or benefit plan or compensation for the benefit or welfare of any current or former Company Person or any collective bargaining agreement (including with respect to the existing collective bargaining agreement of Integrated Information Technology Corporation (a Subsidiary of the Company), make any offer or take any bargaining position without Parent’s prior written consent, which consent shall not be unreasonably withheld), (ii) increase in any material respect the compensation or benefits of, or pay any bonus to, any Company Person, (iii) amend or accelerate the right to payment or vesting of any compensation or benefits, including any outstanding options or any restricted stock awards, (iv) pay any material benefit not provided for as of the date of this Agreement under any Company Employee Plan, (v) grant any awards under, or otherwise expand the benefits of or the persons entitled to participate in, any bonus, incentive, performance or other compensation plan or arrangement or benefit or compensation plan, policy, practice or arrangement (including the Company’s Executive Severance Plan, and offer additional persons the opportunity to participate in, or to participate in, the Company’s Executive Severance Plan), including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, (vi) terminate the employment or take other adverse actions with respect to any of the Company executives and other employees identified in Section 6.1(o) of the Company Disclosure Schedules (the “Key Employees”), (vii) employ or offer to employ or promote or offer to promote, terminate or give notice of intent to terminate, any Person at Pay Grade 8 or above (or its equivalent for Subsidiaries using a different pay scale) (based upon the Company’s or its Subsidiaries’ respective existing pay scales) more or (viiiII) take any action (other than (x) in the Ordinary Course of Business with respect to payment of compensation or (y) pursuant to retention agreements entered into prior to December 31, 2004) to fund or in any other way secure the payment of compensation or benefits under any Employee Plan or Contract;
(p) (i) make or rescind any Tax election, (ii) settle or compromise any Tax liability, (iii) amend any Tax Return, (iv) make a request for a written ruling of a taxing authority litigation relating to Taxes or file a request for a pre-filing agreement or similar procedure or (v) enter into a legally binding agreement with a taxing authority with respect to Taxes;
(q) close (except pursuant to the existing terms of leases disclosed in Section 4.12(b) of the Company Disclosure Schedule entered into prior to the date of this Agreement (and without giving effect to the transactions contemplated by this Agreement)) or open any material facility or office, or initiate, compromise or settle any material Proceeding;
(r) permit any transfer or exercise of rights with respect to shares of Company Common Stock in violation of the Stockholder Agreements;
(s) fail to maintain insurance at levels substantially comparable to levels existing as of the date of this Agreement or to timely file claims thereunder (Intellectual Property rights; provided that the Company shall not pay or incur liability for any materially increased premium without Parent’s consent, not have the right to be unreasonably withheld);
(t) fail to pay accounts payable and other obligations in the Ordinary Course of Business;
(u) agree to any covenant of the Company or any of its Subsidiaries not to compete or other covenant of the Company or any of its Subsidiaries restricting the development, manufacture, marketing or distribution of the products or services of the Company or any of its Subsidiaries or otherwise limiting the freedom of the Company or any of its Subsidiaries to compete in any line of business (other than conflict of interest requirements that are included in any settle litigation outstanding Bid as of the date hereof, so long as disclosed the terms of such settlement involve no monetary obligation or other liability imposed on the Company;
(k) not make any distributions or dividends of assets or securities, nor any changes to the capital structure of the Company;
(l) not modify, change or terminate any of its material obligations other than in Section 6.1(u) the ordinary course of business, or grant any power of attorney with respect to the business of the Company Disclosure Schedule, that may become effective without or the right of negotiation or refusal by Company or its Subsidiaries, by virtue of such Bid being acceptedassets to any party except Buyer; and
(m) or with any Person or in any area or to own, operate, sell, transfer, pledge or otherwise dispose of or encumber any material assets or that would so limit the freedom of Parent or any of its affiliates after the consummation except for payment of the Offer Company's current obligations, not to incur any additional obligations and liabilities, including (I) all liabilities for all claims incurred, whether or not reported, on or before the Merger;
Effective Time under all "employee welfare benefit plans," within the meaning of ERISA, (vII) with respect all liabilities or obligations for vacations or sick leave or retiree, medical or life benefits to Building, permit Building to take any employees or former employees of the actions listed in paragraphs (a) through (u) of this Section 6.1, to the extent reasonably within the Company’s control, and without limiting the scope of the foregoing, authorize or agree to any such action in the Company’s capacity as a member of Building; or
(wIII) authorize any of, or commit or agree, in writing or otherwise, to take any of, the foregoing actions or any action which would cause any representation or warranty all liabilities of the Company set forth in this Agreement to be inaccurate for all benefits accrued under any "employee pension benefit plan," within the applicable standard included in paragraph (vi)(E) meaning of Annex I, or would materially impair or prevent the satisfaction of any condition in Annex I or Article VIIIERISA under each Employee Benefit Plan.
Appears in 1 contract
Conduct Prior to Effective Time. Except as expressly contemplated by this Agreement Agreement, as set forth in Section 6.1 of the Company Disclosure Schedule or with the prior written consent of Parent, which consent shall not be unreasonably withheld or delayed, from and after the date of this Agreement until the earlier of the termination of this Agreement in accordance with its terms or the Effective Time, the Company shall, and shall cause each of its Subsidiaries to, act in the Ordinary Course of Business, and use commercially reasonable efforts to maintain and preserve its and each Subsidiary’s business organization, assets, and properties, keep available and to preserve the services goodwill of its present Company Persons and preserve its advantageous business relationships with customers, strategic partners, suppliers, distributors and others having business dealings with it to the end that its goodwill and ongoing business shall be unimpaired at the Effective TimeCompany. Without limiting the generality of the foregoing, from and after the date of this Agreement until the earlier of the termination of this Agreement in accordance with its terms or the Effective Time, the Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, without the prior written consent of Parent:Parent (which shall not be unreasonably withheld or delayed):
(a) (i) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, securities or other property) in respect of, any of its capital stock; , (ii) 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 for shares of its capital stock or any of its other securities; securities or (iii) purchase, redeem or otherwise acquire any shares of its capital stock or any other securities or any rights, warrants or options (other than the forfeiture (at no cost to the Company or its Subsidiaries) of Company Stock Options pursuant to any Company Stock Plan, by employees in connection with the termination of such employee’s employment) to acquire any such shares or other securities or securities the value of which is measured by such securities;
(b) issue, deliver, sell, grant, pledge or otherwise dispose of or encumber any shares of its capital stock, any other voting securities or any securities convertible into or exchangeable for, or any rights, warrants or options to acquire, any such shares, voting securities or convertible or exchangeable securities, “phantom” stock, “phantom” stock rights, stock appreciation rights or stock-based performance units or securities the value of which is measured by such securities (other than the issuance of shares of Company Common Stock upon the exercise of Company Stock Options or Company Stock Awards outstanding on the date of this Agreement in accordance with their present terms), issue or accept contributions for the purchase of shares of Company Common Stock pursuant to the ESPP, or amend the terms of any of the foregoing, except as expressly contemplated by Section 3.3 of this Agreement;
(c) amend its (or permit any of its Subsidiaries to amend their respective) Certificate of Incorporation, By-laws Bylaws or other comparable charter or organizational documents, except as expressly provided by this Agreement;
(d) acquire (Ai) by merging or consolidating with, or by purchasing all or a substantial portion of the assets or any stock of, or by any other manner, any business or any other Person or division thereof or (Bii) any assets that are material, in the aggregate, to the Company and its Subsidiaries, taken as a whole, except purchases of inventory and components purchased in the Ordinary Course of Business;
(e) except in the Ordinary Course of Business, sell, lease, license, pledge, or otherwise dispose of or encumber any material properties or assets of the Company or of any of its Subsidiaries;
(f) whether or not except for sales of inventory that are in the Ordinary Course of Business, sell, dispose of, or otherwise transfer any assets material to the Company and its Subsidiaries, taken as a whole (including any accounts, leases, Contracts or Intellectual Property or any assets or the stock of any Subsidiaries);
(g) adopt or implement any stockholder rights plan;
(h) except as contemplated in Sections 6.2(d) and 9.1, enter into a Contract with respect to any merger, consolidation, liquidation, dissolution, restructuring, recapitalization or other reorganization or business combination, or any acquisition or disposition of all or any substantial portion of the assets or securities of the Company or any of its Subsidiaries;
(i) (i) incur or suffer to exist any new indebtedness for borrowed money money, other than such indebtedness as is reflected on the Company Balance Sheet or pursuant to existing lines of credit disclosed thereon, or guarantee any such indebtedness of another Person, (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans or advances (in each case other than for employee travel or other business purposes or for employee tuition reimbursement in each case in the Ordinary Course of Business) or capital contributions to, or investments in, any other Person, other than the Company or any of its direct or indirect wholly wholly- or majority-owned Subsidiaries or (iv) enter into any hedging agreement or other financial agreement or arrangement the value of which may change with fluctuations in commodities or equities, prices or exchange rates or other derivative instruments;
(j) make any capital expenditures or other expenditures with respect to property, plant or equipment during any fiscal quarter period in excess of $100,000 100,000.00 in the aggregate for the Company and its Subsidiaries, taken as a whole;
(k) make any change in its pricing policies, credit practices, the rate or timing of its payment of accounts payable, the collection of its accounts receivable, its earnings accrual rates on Contracts or change its accounting methods, principles or practices, except insofar as may have been be required by a change in GAAP or Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve or revalue any assets, or make any change in its fiscal year;
(l) (i) pay, discharge, settle, satisfy, fund or accept any material claims, liabilities, disputes, audit or investigation finding findings or result results or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise)) in existence as of the date hereof, other than in accordance with their terms as in effect on the date of this Agreement, of or claims, liabilities or obligations reflected or reserved against in, the most recent consolidated financial statements (or the notes thereto) of the Company included in the Company SEC Reports filed prior to the date of this Agreement (to the extent so reflected or reserved against), ) or (ii) waive any material benefits of, modify in any adverse respect, fail to enforce, or consent to any matter with respect to which its consent is required under, any confidentiality, standstill confidentiality or similar Contracts to which the Company or any of its Subsidiaries is a party;
(m) terminate any material Contract to which the Company or any of its Subsidiaries is partyparty (other than expiration of any such Contract pursuant to its terms), or waive, release or assign any material rights or claims (including any write-off or other compromise of any accounts receivable of the Company or any of its Subsidiaries), or except in the Ordinary Course of Business modify or amend any material Contract to which the Company or any of its Subsidiaries is party;
(in) terminate any confidentiality or standstill agreement to which the Company or any of its Subsidiaries is party (other than expiration of any such Contract pursuant to its terms), or waive, release or assign any rights or claims (including any write-off or other compromise of any accounts receivable of the Company or any of its Subsidiaries), or modify or amend any such Contract to which the Company or any of its Subsidiaries is party;
(o) except in the Ordinary Course of Business (i) enter into, or modify the terms of, any Contract relating to the rendering of services or the distribution, sale or marketing by third parties of the products of, or products licensed by, the Company or any of its Subsidiaries or (ii) license, or modify the terms of any license of, any material intellectual property rights to or from any third party, other than non-exclusive licenses which may be canceled without penalty by the Company or its Subsidiaries upon written notice of thirty (30) days or less;
(op) except as expressly provided by Section 3.33.3 or as may be required by applicable Law, (i) take any action with respect to, adopt, enter into, terminate or amend any employment, severance or similar agreement, policy, practice or arrangement or benefit plan or compensation for the benefit or welfare of any current or former Company Person (other than in the Ordinary Course of Business with respect to any employment-related actions taken with respect to a current or former Company Person) or any collective bargaining agreement (including with respect to the existing collective bargaining agreement of Integrated Information Technology Corporation (a Subsidiary of the Company), make any offer or take any bargaining position without Parent’s prior written consent, which consent shall not be unreasonably withheld)agreement, (ii) increase in any material respect the compensation or benefits ofof (including promotions), or or, other than as may be required under an existing Contract, pay any bonus to, any Company Person, (iii) amend or accelerate the right to payment or vesting of any compensation or benefits, including any outstanding options or any restricted stock awards, (iv) pay any material benefit not provided for as of the date of this Agreement under any Company Employee Plan, (v) adopt, grant any awards under, or otherwise change or expand the benefits of or the persons entitled to participate in, any bonus, incentive, performance performance, severance or other compensation plan or arrangement or benefit or compensation plan (including, without limitation, any medical, dental or related or similar healthcare benefit plan), policy, practice or arrangement (including the Company’s Executive Severance Plan, and offer additional persons the opportunity to participate in, or to participate in, the Company’s Executive Severance Plan)arrangement, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, (vi) terminate the employment or take other adverse actions with respect to any of the Company executives and other employees identified in Section 6.1(o6.1(p) of the Company Disclosure Schedules (the “Key Employees”)Schedule, (vii) employ or offer to employ or promote or offer to promote, terminate or give notice of intent to terminate, any executive officer of the Company or Person at Pay Grade 8 or above (or its performing an equivalent function for Subsidiaries using a different pay scale) (based upon any of the Company’s or its Subsidiaries’ respective existing pay scales) Subsidiaries or (viii) take any action (other than (x) in the Ordinary Course of Business with respect to payment of compensation or (y) pursuant to retention agreements entered into prior to December 31, 2004compensation) to fund or in any other way secure the payment of compensation or benefits under any Employee Plan or Contract;
(pq) (i) rescind or, other than consistent with prior year Tax reporting of similar items, make or rescind any Tax election, (ii) settle or compromise any Tax liability, (iii) amend any Tax Return, (iv) make a request for a written ruling of a taxing authority relating to Taxes or file a request for a pre-filing agreement or similar procedure or (v) enter into a legally binding agreement with a taxing authority with respect to Taxes;
(qr) close (except pursuant to the existing terms of leases disclosed in Section 4.12(b4.11(b) of the Company Disclosure Schedule entered into prior to the date of this Agreement (and without giving effect to the transactions contemplated by this Agreement)) or open any material facility or office, or initiate, compromise or settle any material Proceeding;
(rs) permit authorize any transfer or exercise of rights with respect to any shares of Company Common Stock in violation of the Stockholder AgreementsVoting Agreements or authorize the removal of any legend restricting the transfer of such shares;
(st) fail to maintain insurance at levels substantially comparable to levels existing as of the date of this Agreement or to timely file claims thereunder (provided that the Company shall not pay or incur liability for any materially increased premium without Parent’s consent, not to be unreasonably withheld);
(tu) fail to pay accounts payable and other obligations in the Ordinary Course of Business;
(uv) agree to any covenant of the Company or any of its Subsidiaries not to compete or other covenant of the Company or any of its Subsidiaries restricting the development, manufacture, marketing or distribution of the products or services of the Company or any of its Subsidiaries or otherwise limiting in any material respect the freedom of the Company or any of its Subsidiaries to compete in any line of business (other than conflict of interest requirements that are included in any outstanding Bid as of the date hereof, as disclosed in Section 6.1(u) of the Company Disclosure Schedule, that may become effective without the right of negotiation or refusal by Company or its Subsidiaries, by virtue of such Bid being accepted) or with any Person or in any area or to own, operate, sell, transfer, pledge or otherwise dispose of or encumber any material assets or that would so limit the freedom of Parent or any of its affiliates after the consummation of the Offer Merger, except for territorial limitations set forth in supplier or the Merger;
(v) with respect to Building, permit Building to take any of the actions listed in paragraphs (a) through (u) of this Section 6.1, to the extent reasonably within the Company’s control, and without limiting the scope of the foregoing, authorize or agree to any such action distribution agreements entered into in the Company’s capacity as a member Ordinary Course of BuildingBusiness; or
(w) authorize any of, or commit or agree, in writing or otherwise, to take any of, the foregoing actions or any action which would cause any representation or warranty of the Company set forth described in this Agreement to be inaccurate under the applicable standard included in paragraph (vi)(Ea) of Annex I, or would materially impair or prevent the satisfaction of any condition in Annex I or Article VIIIthrough (v) above.
Appears in 1 contract
Conduct Prior to Effective Time. Except as expressly contemplated consented to in writing by the Parent, which consent shall not be unreasonably withheld, delayed or conditioned, or except as expressly required by the terms of this Agreement or with the prior written consent of ParentAgreement, from and after the date of this Agreement until the earlier of the termination of this Agreement in accordance with its terms or the Effective Time, the Company shall, and shall cause each of its Subsidiaries to, act and carry on its business in the Ordinary Course of Businessusual, regular and ordinary course in substantially the same manner as previously conducted, pay its debts and Taxes and perform its other obligations when due (subject to good faith disputes over such debts, Taxes or obligations), comply in all material respects with all applicable laws, rules and regulations, and use commercially reasonable efforts best efforts, consistent with past practices, to maintain and preserve its and each Subsidiary’s of its Subsidiaries’ business organization, assets, and properties, keep available the services of its present Company Persons officers and employees and preserve its advantageous business relationships with customers, strategic partners, suppliers, distributors and others having business dealings with it to the end that its goodwill and ongoing business shall be unimpaired at and after the Effective Time. Without limiting the generality of the foregoing, from and after the date of this Agreement until the earlier of the termination of this Agreement in accordance with its terms or the Effective Time, except as specifically set forth in Section 5.1 of the Company Disclosure Schedule or as expressly required by this Agreement, the Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, do any of the following without the prior written consent of Parent:the Parent (which shall not be unreasonably withheld or delayed in the case of a request for consent pursuant to clause (ii) of Section 5.1(b)):
(a) (i) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, securities or other property) in respect of, any of its capital stockstock (other than dividends and distributions by a direct or indirect wholly owned Subsidiary of the Company to its parent); (ii) 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 for shares of its capital stock or any of its other securities; or (iii) purchase, redeem or otherwise acquire any shares of its capital stock or any other securities or any rights, warrants or options (other than the forfeiture (at no cost to the Company or its Subsidiaries) of Company Stock Options pursuant to any Company Stock Plan, by employees in connection with the termination of such employee’s employment) to acquire any such shares or other securities except, in the case of this clause (iii), for (A) the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or securities partial payment of the value of which is measured exercise price payable by such securitiesholder upon exercise of Company Stock Options to the extent required under the terms of such Company Stock Options as in effect on the date hereof; or (B) from former employees, directors and consultants in accordance with agreements as in effect on the date hereof providing for the repurchase of shares in connection with any termination of services to the Company or any of its Subsidiaries;
(b) issue, deliver, sell, grant, pledge or otherwise dispose of or encumber any shares of its capital stock, any other voting securities or any securities convertible into or exchangeable for, or any rights, warrants or options to acquire, any such shares, voting securities or convertible or exchangeable securities, “phantom” stock, “phantom” stock rights, stock appreciation rights or stock-based performance units or securities the value of which is measured by such securities (other than (i) the issuance of shares of Company Common Stock upon the exercise of Company Stock Options or Company Warrants or the vesting of RSUs outstanding on the date of this Agreement in accordance with their present termsterms or granted pursuant to clause (ii) of this Section 5.1(b), issue or accept contributions for the and (ii) grants of Company Stock Options to purchase of shares of Company Common Stock pursuant to the ESPPCompany Stock Plan, or amend in an aggregate amount not in excess of $200,000 in value calculated using the terms same methodology as currently employed by the Company for purposes of any its financial statements, which grants shall be in an amount per person consistent with the Company’s past practices for the applicable position, at an exercise price equal to the fair market value of the foregoing, except as expressly contemplated by Section 3.3 Company Common Stock on the date of this Agreementgrant and otherwise on terms used in the Ordinary Course of Business;
(c) amend its Certificate certificate of Incorporationincorporation, Byby-laws or other comparable charter or organizational documents, except as expressly provided by this Agreement;
(d) acquire (Ai) by merging or consolidating with, or by purchasing all or a substantial portion of the assets or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other Person business organization or division thereof or (Bii) any assets that are material, in the aggregate, to the Company and its Subsidiaries, taken as a whole, except purchases of inventory and components in the Ordinary Course of Business;
(e) except in the Ordinary Course of Business, sell, lease, license, pledge, or otherwise dispose of or encumber any properties or assets of the Company or of any of its Subsidiaries;
(f) whether or not in the Ordinary Course of Business, sell, dispose of, license, or otherwise transfer any assets material to the Company and its Subsidiaries, taken as a whole (including any accounts, leases, Contracts contracts or Intellectual Property or any assets or the stock of any Subsidiaries);
(g) amend, terminate, or grant any waiver of any provision of, or redeem the rights issued under, the Company Rights Agreement or adopt or implement any other stockholder rights plan;
(h) except for a confidentiality agreement as permitted by Section 6.1, enter into a Contract an agreement with respect to any merger, consolidation, liquidation, dissolution, restructuring, recapitalization or other reorganization liquidation or business combination, or any acquisition or disposition of all or any substantial portion substantially all of the assets or securities of the Company or any of its Subsidiaries;
(i) (i) incur or suffer to exist any indebtedness for borrowed money other than such indebtedness which existed as of June 30, 2011 as reflected on the Company Balance Sheet or extensions thereof, or guarantee any such indebtedness of another Personperson, (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Personperson, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans or loans, advances (in each case other than for employee travel or other business purposes or for employee tuition reimbursement in each case routine advances to employees of the Company in the Ordinary Course of Business) or capital contributions to, or investments in, any other Personperson, other than the Company or any of its direct or indirect wholly owned Subsidiaries Subsidiaries, or (iv) enter into any hedging agreement or other financial agreement or arrangement designed to protect the value of which may change with Company or its Subsidiaries against fluctuations in commodities or equitiesprices, prices or exchange rates or other derivative instrumentsinterest rates;
(j) make any individual capital expenditure or other expenditure with respect to property, plant or equipment in excess of $200,000, or make capital expenditures or other expenditures with respect to property, plant or equipment in excess of $100,000 1,000,000 in the aggregate for the Company and its Subsidiaries, taken as a whole;
(k) make any change in its accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve or revalue any assets, or make any change in its fiscal yearreserve;
(il) pay, discharge, settle, satisfy, fund settle or accept satisfy any claims, liabilities, disputes, audit or investigation finding or result 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 or in accordance with their terms as in effect on the date of this Agreement, of claims, liabilities or obligations (A) reflected or reserved against in, or contemplated by, the most recent consolidated financial statements (or the notes thereto) of the Company included in the Company SEC Reports filed prior to the date of this Agreement (to the extent so reflected or reserved against), ) or (iiB) waive any material benefits of, modify incurred since the date of such financial statements in any adverse respect, fail to enforce, or consent to any matter with respect to which its consent is required under, any confidentiality, standstill or similar Contracts to which the Company or any Ordinary Course of its Subsidiaries is a partyBusiness;
(m) modify, amend or terminate any material Contract to which the Company or any of its Subsidiaries is partyMaterial Contract, or knowingly waive, release or assign any material rights or claims (including any write-off or other compromise of any accounts receivable of the Company or any of its Subsidiaries), or except in the Ordinary Course of Business modify or amend any material Contract to which the Company or any of its Subsidiaries is party;
(n) (i) except in the Ordinary Course of Business enter intointo any material contract or agreement, or modify the terms of, any Contract relating to the rendering of services or the distribution, sale or marketing by third parties of the products of, or products licensed by, the Company or any of its Subsidiaries or (ii) licenseenter into any agreement with any customer that is not terminable (or that does not terminate by its terms) within two years after the date hereof without prepayment or penalty, or modify the terms of any (iii) license of, any material intellectual property rights Intellectual Property to or from any third party, other than non-exclusive licenses which may be canceled without penalty by the Company or its Subsidiaries upon written notice of thirty (30) days or less;
(o) except as expressly provided by required to comply with Sections 6.11, 6.12, 6.13 or 6.14 of this Agreement or with applicable law or agreements, plans or arrangements existing on the date hereof and disclosed in Section 3.35.1(o) of the Company Disclosure Schedule, (i) take any action with respect to, adopt, enter into, terminate or amend any employment, severance or similar agreement, policy, practice or arrangement agreement or benefit plan or compensation for the benefit or welfare of any current or former Company Person director, officer, employee or consultant or any collective bargaining agreement (including with respect to the existing collective bargaining agreement of Integrated Information Technology Corporation (a Subsidiary of the Company), make any offer or take any bargaining position without Parent’s prior written consent, which consent shall not be unreasonably withheld)agreement, (ii) increase in any material respect the compensation or fringe benefits of, or pay any bonus to, any Company Persondirector, officer, employee or consultant (except for annual salary increases for non-officer employees in the Ordinary Course of Business not to exceed $100,000 in the aggregate for all such employees and $10,000 for any individual employee), (iii) amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or any restricted stock awardsunits, (iv) pay any material benefit not provided for as of the date of this Agreement under any Company Employee Planbenefit plan, (v) grant any awards under, or otherwise expand the benefits of or the persons entitled to participate in, under any bonus, incentive, performance or other compensation plan or arrangement or benefit or compensation plan, policy, practice or arrangement (including the Company’s Executive Severance Plan, and offer additional persons the opportunity to participate in, or to participate in, the Company’s Executive Severance Plan), including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, except as permitted pursuant to Section 5.1(b), or (vi) terminate the employment or take other adverse actions with respect to any of the Company executives and other employees identified in Section 6.1(o) of the Company Disclosure Schedules (the “Key Employees”), (vii) employ or offer to employ or promote or offer to promote, terminate or give notice of intent to terminate, any Person at Pay Grade 8 or above (or its equivalent for Subsidiaries using a different pay scale) (based upon the Company’s or its Subsidiaries’ respective existing pay scales) or (viii) take any action (other than (x) in the Ordinary Course of Business with respect to payment of compensation or (y) pursuant to retention agreements entered into prior to December 31, 2004) to fund or in any other way secure the payment of compensation or benefits under any Employee Plan employee plan, agreement, contract or Contractarrangement or benefit plan;
(p) (i) make or rescind hire any Tax electionnew employee, (ii) settle or compromise any Tax liability, (iii) amend any Tax Return, (iv) make a request for a written ruling of a taxing authority relating other than employees hired on an “at will” basis to Taxes or file a request for a pre-filing agreement or similar procedure or (v) enter into a legally binding agreement with a taxing authority with respect to Taxes;
(q) close (except pursuant to fill the existing terms of leases disclosed in positions set forth on Section 4.12(b5.1(p) of the Company Disclosure Schedule entered into prior or to fill any position below the level of “director” existing as of the date of this Agreement (and without giving effect to that becomes vacant following the transactions contemplated by date of this Agreement);
(q) make or open rescind any material facility Tax election, settle or office, compromise any material Tax liability or amend any Tax return in any material respect;
(r) initiate, compromise or settle any material Proceeding;
(r) permit litigation or arbitration proceeding, or any transfer actual or exercise threatened litigation arising out of rights or in connection with respect to shares of Company Common Stock in violation the Merger or any of the Stockholder Agreementsother transactions contemplated by this Agreement;
(s) open or close any facility or office;
(t) fail to maintain insurance at levels substantially comparable to levels existing as of the date of this Agreement or to timely file claims thereunder (provided that the Company shall not pay or incur liability for any materially increased premium without Parent’s consent, not to be unreasonably withheld)Agreement;
(tu) fail to pay accounts payable and other obligations in the Ordinary Course of Business;
(uv) agree enter into, approve or recommend (or propose publicly to approve or recommend), or permit any covenant of the Company’s controlled Affiliates to enter into, any agreement requiring, or reasonably expected to cause, the Company to abandon, terminate, delay or fail to consummate, or that would otherwise impede, interfere or be inconsistent with, the Merger or any of its Subsidiaries not the other transactions contemplated by this Agreement or requiring, or reasonably expected to compete or other covenant of cause, the Company or any of its Subsidiaries restricting the developmentto fail to comply with this Agreement; provided, manufacturehowever, marketing or distribution of the products or services of that the Company or any may, without the prior written consent of its Subsidiaries or otherwise limiting Parent, (A) enter into a confidentiality agreement with a third party in the freedom of circumstances and in accordance with the Company or any of its Subsidiaries to compete in any line of business (other than conflict of interest requirements that are included in any outstanding Bid as of the date hereof, as disclosed terms and conditions described in Section 6.1(u6.1, and (B) enter into a definitive agreement providing for the implementation of a Superior Proposal in the Company Disclosure Schedule, that may become effective without circumstances and in accordance with the right of negotiation or refusal by Company or its Subsidiaries, by virtue of such Bid being accepted) or with any Person or terms and conditions described in any area or to own, operate, sell, transfer, pledge or otherwise dispose of or encumber any material assets or that would so limit the freedom of Parent or any of its affiliates after the consummation of the Offer or the MergerSection 8.1(d)(ii);
(vw) with respect to Building, permit Building to take convene any annual or special meeting of the actions listed in paragraphs (a) through (u) of this Section 6.1, to the extent reasonably within the Company’s control, and without limiting the scope of the foregoing, authorize or agree to any such action in the Company’s capacity stockholders other than as a member of Buildingexpressly required by Section 6.5; or
(wx) authorize any of, or commit or agree, in writing or otherwise, to take any of, the foregoing actions or any action which would cause any representation or warranty of the Company set forth in this Agreement to be inaccurate under the applicable standard included in paragraph (vi)(E) of Annex I, or would materially impair or prevent the satisfaction of any condition in Annex I or Article VIIIactions.
Appears in 1 contract
Conduct Prior to Effective Time. Except as expressly contemplated ------------------------------- by this Agreement or with Agreement, as consented to in writing by the prior written consent of Parent, from and after the date of this Agreement until the earlier of the termination of this Agreement in accordance with its terms or the Effective Time, the Company shall, and shall cause each of its Subsidiaries to, act in the Ordinary Course of Business, and use commercially reasonable efforts to maintain and preserve its and each Subsidiary’s 's business organization, assets, and properties, keep available the services of its present Company Persons officers and employees and preserve its advantageous business relationships with customers, strategic partners, suppliers, distributors and others having business dealings with it to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time. Without limiting the generality of the foregoing, from and after the date of this Agreement until the earlier of the termination of this Agreement in accordance with its terms or the Effective Time, the Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, without the prior written consent of the Parent:
(a) (iA) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, securities or other property) in respect of, any of its capital stockstock (other than dividends and distributions by a direct or indirect wholly owned Subsidiary of the Company to its parent); (iiB) 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 for shares of its capital stock or any of its other securities; or (iiiC) purchase, redeem or otherwise acquire any shares of its capital stock or any other securities or any rights, warrants or options (other than the forfeiture (at no cost to the Company or its Subsidiaries) of Company Stock Options pursuant to any Company Stock Plan, by employees in connection with the termination of such employee’s employment) to acquire any such shares or other securities or securities the value of which is measured by such securities;
(b) issue, deliver, sell, grant, pledge or otherwise dispose of or encumber any shares of its capital stock, any other voting securities or any securities convertible into or exchangeable for, or any rights, warrants or options to acquire, any such shares, voting securities or convertible or exchangeable securities, “phantom” stock, “phantom” stock rights, stock appreciation rights or stock-based performance units or securities the value of which is measured by such securities (other than the issuance of shares of Company Common Stock Shares upon the exercise of Company Stock Options or Company Warrants outstanding on the date of this Agreement in accordance with their present terms), issue or accept contributions for the purchase of shares of Company Common Stock pursuant to the ESPP, or amend the terms of any of the foregoing, except as expressly contemplated by Section 3.3 of this Agreement;
(c) amend its Certificate articles of Incorporationincorporation, Byby-laws or other comparable charter or organizational documents, except as expressly provided by this Agreement;
(d) acquire (A) by merging or consolidating with, or by purchasing all or a substantial portion of the assets or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other Person business organization or division thereof or (B) any assets that are material, in the aggregate, to the Company and its Subsidiaries, taken as a whole, except purchases of inventory and components in the Ordinary Course of Business;
(e) except in the Ordinary Course of Business, sell, lease, license, pledge, or otherwise dispose of or encumber any properties or assets of the Company or of any of its Subsidiaries;
(f) whether or not in the Ordinary Course of Business, sell, dispose of, or otherwise transfer any assets material to the Company and its Subsidiaries, taken as a whole (including any accounts, leases, Contracts contracts or Intellectual Property intellectual property or any assets or the stock of any Subsidiaries, but excluding the sale or non-exclusive license of products in the Ordinary Course of Business);
(g) adopt or implement any stockholder rights planplan or, except as provided in Section 4.23, alter or further amend the Rights Agreement or the Rights;
(h) enter into a Contract an agreement with respect to any merger, consolidation, liquidation, dissolution, restructuring, recapitalization or other reorganization liquidation or business combination, or any acquisition or disposition of all or any substantial portion substantially all of the assets or securities of the Company or any of its Subsidiaries;
(i) (iA) except as permitted under Section 7.8(e), incur or suffer to exist any indebtedness for borrowed money other than such indebtedness reflected on the Company Balance Sheet or guarantee any such indebtedness of another Personperson, (iiB) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Personperson, enter into any “"keep well” " or other agreement to maintain any financial statement condition of another Person person or enter into any arrangement having the economic effect of any of the foregoing, (iiiC) make any loans or loans, advances (in each case other than for employee travel or other business purposes or for employee tuition reimbursement in each case routine advances to employees of the Company in the Ordinary Course of Business) or capital contributions to, or investments in, any other Personperson, other than the Company or any of its direct or indirect wholly owned Subsidiaries Subsidiaries, or (ivD) enter into any hedging agreement or other financial agreement or arrangement the value of which may change with fluctuations in commodities or equities, prices or exchange rates or other derivative instrumentsrates;
(j) make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $100,000 500,000 in the aggregate for the Company and its Subsidiaries, taken as a whole;
(k) make any change in its accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve or revalue any assets, or make any change in its fiscal yearreserve;
(il) (A) pay, discharge, settle, satisfy, fund settle or accept satisfy any claims, liabilities, disputes, audit or investigation finding or result 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 or in accordance with their terms as in effect on the date of this Agreement, of claims, liabilities or obligations reflected or reserved against in, or contemplated by, the most recent consolidated financial statements (or the notes thereto) of the Company included in the Company SEC Reports filed prior to the date of this Agreement (to the extent so reflected or reserved against)) or incurred since the date of such financial statements in the Ordinary Course of Business, or (iiB) waive any material benefits of, modify in any adverse respect, fail to enforce, or consent to any matter with respect to which its consent is required under, any confidentiality, standstill or similar Contracts agreements to which the Company or any of its Subsidiaries is a party;
(m) modify, amend or terminate any material Contract contract or agreement to which the Company or any of its Subsidiaries is party, other than contemplated modifications, terminations or amendments reflected on the Company Disclosure Schedule, or knowingly waive, release or assign any material rights or claims (including any write-off or other compromise of any accounts receivable of the Company or any of its Subsidiaries), or except in the Ordinary Course of Business modify or amend any material Contract to which the Company or any of its Subsidiaries is party;
(iA) except in the Ordinary Course of Business enter into, into any contract or modify the terms of, any Contract agreement relating to the rendering of services or the distribution, sale or marketing by third parties of the products of, or products licensed by, the Company or any of its Subsidiaries or (iiB) license, or modify the terms of any license of, any material intellectual property rights to or from any third party, other than non-exclusive licenses which may not be canceled without penalty by the Company or its Subsidiaries upon written notice of thirty (30) 30 days or less;
(o) except as expressly provided by Section 3.3required to comply with applicable law or agreements, plans or arrangements existing on the date hereof, (iA) take any action with respect to, adopt, enter into, terminate or amend any employment, severance or of similar agreement, policy, practice or arrangement agreement or benefit plan or compensation for the benefit or welfare of any current or former Company Person director, officer, employee or consultant or any collective bargaining agreement (including with respect to the existing collective bargaining agreement of Integrated Information Technology Corporation (a Subsidiary of the Company), make any offer or take any bargaining position without Parent’s prior written consent, which consent shall not be unreasonably withheld)agreement, (iiB) increase in any material respect the compensation or fringe benefits of, or pay any bonus to, any Company Persondirector, officer, key employee or consultant, (iiiC) amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or any restricted stock awardsawards (other than the acceleration of the Company's Stock Options for the purpose of treatment of such options under Section 7.8 hereof), (ivD) pay any material benefit not provided for as of the date of this Agreement under any Company Employee Planbenefit plan, (vE) grant any awards under, or otherwise expand the benefits of or the persons entitled to participate in, under any bonus, incentive, performance or other compensation plan or arrangement or benefit or compensation plan, policy, practice or arrangement (including the Company’s Executive Severance Plan, and offer additional persons the opportunity to participate in, or to participate in, the Company’s Executive Severance Plan), including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, (vi) terminate the employment or take other adverse actions with respect to any of the Company executives and other employees identified in Section 6.1(o) of the Company Disclosure Schedules (the “Key Employees”), (vii) employ or offer to employ or promote or offer to promote, terminate or give notice of intent to terminate, any Person at Pay Grade 8 or above (or its equivalent for Subsidiaries using a different pay scale) (based upon the Company’s or its Subsidiaries’ respective existing pay scales) or (viiiF) take any action (other than (x) in the Ordinary Course of Business with respect to payment of compensation or (y) pursuant to retention agreements entered into prior to December 31, 2004) to fund or in any other way secure the payment of compensation or benefits under any Employee Plan employee plan, agreement, contract or Contractarrangement or benefit plan;
(p) (i) make or rescind any Tax election, (ii) settle or compromise any Tax liability, (iii) liability or amend any Tax Return, (iv) make a request for a written ruling of a taxing authority relating to Taxes or file a request for a pre-filing agreement or similar procedure or (v) enter into a legally binding agreement with a taxing authority with respect to Taxesreturn;
(q) close (except commence any offering of Shares pursuant to the existing terms of leases disclosed ESPP (as defined in Section 4.12(b7.9);
(r) of the Company Disclosure Schedule entered into prior to the date of this Agreement (and without giving effect to the transactions contemplated by this Agreement)) or open any material facility or office, or initiate, compromise or settle any material Proceeding;
(r) permit any transfer litigation or exercise of rights with respect to shares of Company Common Stock in violation of the Stockholder Agreementsarbitration proceeding;
(s) open or close any material facility or office;
(t) fail to maintain insurance at levels substantially comparable to levels existing as of the date of this Agreement or to timely file claims thereunder (provided that the Company shall not pay or incur liability for any materially increased premium without Parent’s consent, not to be unreasonably withheld)Agreement;
(tu) fail to pay accounts payable and other obligations in the Ordinary Course of Business;
(u) agree to any covenant of the Company or any of its Subsidiaries not to compete or other covenant of the Company or any of its Subsidiaries restricting the development, manufacture, marketing or distribution of the products or services of the Company or any of its Subsidiaries or otherwise limiting the freedom of the Company or any of its Subsidiaries to compete in any line of business (other than conflict of interest requirements that are included in any outstanding Bid as of the date hereof, as disclosed in Section 6.1(u) of the Company Disclosure Schedule, that may become effective without the right of negotiation or refusal by Company or its Subsidiaries, by virtue of such Bid being accepted) or with any Person or in any area or to own, operate, sell, transfer, pledge or otherwise dispose of or encumber any material assets or that would so limit the freedom of Parent or any of its affiliates after the consummation of the Offer or the Merger;
(v) with respect to Building, permit Building to take any of the actions listed in paragraphs (a) through (u) of this Section 6.1, to the extent reasonably within the Company’s control, and without limiting the scope of the foregoing, authorize or agree to any such action in the Company’s capacity as a member of Building; or
(wv) authorize any of, or commit or agree, in writing or otherwise, to take any of, the foregoing actions or any action which would cause any representation or warranty of the Company set forth in this Agreement to be inaccurate under the applicable standard included in paragraph (vi)(EE) of Annex I, or would materially impair or prevent the satisfaction of any condition in Annex ----- I or Article VIII.. -
Appears in 1 contract
Conduct Prior to Effective Time. Except as for matters expressly contemplated by this Agreement Agreement, set forth in the Company Disclosure Letter, required by Law or with the prior written consent of Parent, from and after the date of this Agreement until the earlier earliest to occur of (i) the Effective Time, (ii) such time as Merger Sub’s Designees constitute at least a majority of the Company Board and (iii) termination of this Agreement in accordance with its terms or the Effective Timeterms, the Company shall, and shall cause each of its Subsidiaries the Company Subsidiary to, act in the Ordinary Course ordinary course of Businessbusiness consistent with past practice, use commercially reasonable efforts to comply in all material respects with applicable Law, and to the extent consistent therewith, use commercially reasonable efforts to maintain and preserve its and each Subsidiary’s business organization, assets, and properties, keep available the services of its present Company Persons and their key personnel, preserve its advantageous their business relationships with customers, strategic partners, suppliers, distributors and others having distributors, continue to pursue business dealings opportunities consistent with it the Company’s business plan, and preserve existing Government Contracts and eligibility to the end that its goodwill and ongoing business shall be unimpaired at the Effective Timebid for Government Contracts. Without limiting the generality of the foregoing, from and after the date of this Agreement until the earlier earliest to occur of (i) the Effective Time, (ii) such time as Merger Sub’s Designees constitute at least a majority of the Company Board and (iii) termination of this Agreement in accordance with its terms or the Effective Timeterms, the Company shall not, and shall not permit any of its Subsidiaries the Company Subsidiary to, directly or indirectly, without the prior written consent of Parent:Parent (which consent shall not be unreasonably withheld, conditioned or delayed):
(a) (i) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, securities or other property) in respect of, any of its capital stockstock other than dividends or distributions from the Company Subsidiary to the Company; (ii) 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 for shares of its capital stock or any of its other securities; or (iii) purchase, redeem or otherwise acquire any shares of its capital stock or any other securities or any rights, warrants or options (other than the forfeiture (at no cost to the Company or its Subsidiariesthe Company Subsidiary) of Company Employee Stock Options pursuant to any the Company Stock Plan, by employees in connection with the termination of such employee’s employment, to pay the exercise price of the Company Employee Stock Options or to pay any Tax withholding obligations related to the exercise of Company Employee Stock Options) to acquire any such shares or other securities or securities the value of which is measured by such securities;
(b) issue, deliver, sell, grant, pledge or otherwise dispose of or encumber any shares of its capital stock, any other voting securities or any securities convertible into or exchangeable for, or any rights, warrants or options to acquire, any such shares, voting securities or convertible or exchangeable securities, “phantom” stock, “phantom” stock rights, stock appreciation rights or stock-based performance units or securities the value of which is measured by such securities (other than the issuance of shares of Company Common Stock upon the exercise of Company Employee Stock Options outstanding on the date of this Agreement in accordance with their present terms), issue or accept contributions for the purchase of shares of Company Common Stock pursuant to the ESPP, or amend the terms of any of the foregoing, except as expressly contemplated by Section 3.3 4.3 of this Agreement;
(c) amend its Certificate of Incorporationthe Company Charter, By-laws the Company Bylaws or other comparable charter or organizational documents, except as expressly provided by this Agreementdocuments of the Company Subsidiary;
(d) acquire (A) by merging or consolidating with, or by purchasing all or a substantial portion of the assets or any stock of, or by any other manner, any business or any other Person or division thereof or (B) any assets that are material, in the aggregate, to the Company and its Subsidiariesthe Company Subsidiary, taken as a whole, except purchases of inventory and components in the Ordinary Course ordinary course of Businessbusiness consistent with past practice;
(e) except in the Ordinary Course ordinary course of Businessbusiness consistent with past practice, sell, lease, license, pledge, or otherwise dispose of or encumber any properties or assets of (including Company IP) that are material, individually or in the aggregate to the Company or of any of its Subsidiariesand the Company Subsidiary taken as a whole;
(f) whether (i) grant to any executive officer or not director of the Company or the Company Subsidiary any material increase in compensation, (ii) grant to any current or former executive officer or director of the Company or any Company Subsidiary any material increase in severance or termination pay, (iii) enter into any severance or termination agreement with any such executive officer or director, (iv) establish, adopt, enter into or amend in any material respect any collective bargaining agreement or Company Benefit Plan or (v) take any action to accelerate any rights or benefits, or make any material determinations under any Company Benefit Plan, except, in the Ordinary Course case of Businessthe foregoing clauses (i) through (v), sell(1) in the ordinary course of business, dispose of, or otherwise transfer any assets material (2) as required pursuant to the terms of any Company Benefit Plan, Company Benefit Agreement or other agreement as in effect on the date of this Agreement or (3) as otherwise expressly permitted by this Agreement or required by applicable Law; provided that the foregoing clauses (i) through (v) shall not restrict the Company or the Company Subsidiary from entering into or making available to newly hired employees or to employees, in the context of promotions based on job performance or workplace requirements, in each case in the ordinary course of business, plans, agreements, benefits and its Subsidiaries, taken as a whole compensation arrangements (including any accounts, leases, Contracts incentive grants) that have a value that is consistent with the past practice of making compensation and benefits available to newly hired or Intellectual Property or any assets or the stock of any Subsidiaries)promoted employees in similar positions;
(g) adopt or implement any stockholder rights plan;
(h) enter into a Contract with respect to any merger, consolidation, liquidation, dissolution, restructuring, recapitalization or other reorganization or business combination, or any acquisition or disposition of all or any substantial portion of the assets or securities of the Company or any of its Subsidiaries;
(i) (iA) incur or suffer to exist modify in any material respect any indebtedness for borrowed money other than such indebtedness reflected on the Company Balance Sheet or guarantee any such indebtedness of another Person, except for (ii1) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities short-term borrowings incurred in the ordinary course of business and (2) indebtedness solely involving the Company or any of its Subsidiariesthe Company Subsidiary, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iiiB) make any loans or loans, advances (in each case other than for employee travel or other business purposes or for employee tuition reimbursement in each case in the Ordinary Course of Business) or capital contributions to, or investments in, any other Person, other than (y) to or in the Company or any the Company Subsidiary and (z) advances to employees in respect of its direct or indirect wholly owned Subsidiaries or (iv) enter into any hedging agreement travel or other financial agreement or arrangement related ordinary expenses in the value ordinary course of which may change business consistent with fluctuations in commodities or equities, prices or exchange rates or other derivative instrumentspast practice;
(jh) make any capital expenditures or other expenditures with respect to property, plant or equipment (other than an allowable contract expense under a Government Contract) in excess of $100,000 250,000 in the aggregate for the Company and its Subsidiariesthe Company Subsidiary, taken as a whole;
(ki) make any change in its accounting methods, principles or practicespractices materially affecting the reported consolidated assets, liabilities and results of operation of the Company, except insofar as may have been be required by a change in GAAP or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve or revalue any assets, or make any change in its fiscal yearGAAP;
(j) (i) pay, discharge, settle, satisfy, fund or accept any material claims, liabilities, disputes, audit or investigation finding or result or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (x) in accordance with their terms as in effect on the date of this Agreement, of or (y) with respect to claims, liabilities or obligations reflected or reserved against in, the most recent consolidated financial statements (or the notes thereto) of the Company included in the Company SEC Reports filed prior to the date of this Agreement (to the extent so reflected or reserved against), or (ii) waive any material benefits of, modify in any adverse respect, or fail to enforce, or consent to any matter with respect to which its consent is required under, enforce any confidentiality, standstill or similar Contracts to which the Company or any of its Subsidiaries the Company Subsidiary is a partyparty other than in the ordinary course of business or in accordance with Section 7.3;
(mk) terminate any material Contract to which the Company or any of its Subsidiaries is partyMaterial Contract, or waive, release or assign any material rights or claims under a Material Contract, or modify or amend any Material Contract in any adverse respect, all except in the ordinary course of business consistent with past practice;
(including l) make or change any write-off Tax election, change an annual accounting period for Tax purposes, adopt or other compromise of change any accounts receivable accounting method, file any amended Tax Return, enter into any agreement relating to Taxes with any Governmental Entity, settle any claim or assessment relating to Taxes of the Company or the Company Subsidiary, surrender any right to claim a refund of its Subsidiaries)Taxes paid by the Company or the Company Subsidiary, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or the Company Subsidiary, or except take any other similar action relating to the filing of any Tax Return or the payment of any Tax, if such action would have the effect of materially increasing the Tax liability of the Company or the Company Subsidiary in any taxable period;
(m) adopt or enter into any collective bargaining agreement or other labor union Contract applicable to the Ordinary Course employees of Business the Company or the Company Subsidiary;
(n) fail to renew or maintain any material insurance policy;
(o) fail to maintain any Registered IP or the confidentiality of the material trade secrets of the Company or the Company Subsidiary;
(p) terminate any material Company Outbound License or material Company Inbound License, waive, release or assign any material rights or claims under a material Company Outbound License or material Company Inbound License, or modify or amend any material Contract to which the Company Outbound License or material Company Inbound License in any of its Subsidiaries is party;
(i) adverse respect, all except in the Ordinary Course of Business enter into, or modify the terms of, any Contract relating to the rendering of services or the distribution, sale or marketing by third parties of the products of, or products licensed by, the Company or any of its Subsidiaries or (ii) license, or modify the terms of any license of, any material intellectual property rights to or from any third party, other than non-exclusive licenses which may be canceled without penalty by the Company or its Subsidiaries upon written notice of thirty (30) days or less;
(o) except as expressly provided by Section 3.3, (i) take any action with respect to, adopt, enter into, terminate or amend any employment, severance or similar agreement, policy, practice or arrangement or benefit plan or compensation for the benefit or welfare of any current or former Company Person or any collective bargaining agreement (including with respect to the existing collective bargaining agreement of Integrated Information Technology Corporation (a Subsidiary of the Company), make any offer or take any bargaining position without Parent’s prior written consent, which consent shall not be unreasonably withheld), (ii) increase in any material respect the compensation or benefits of, or pay any bonus to, any Company Person, (iii) amend or accelerate the right to payment or vesting of any compensation or benefits, including any outstanding options or any restricted stock awards, (iv) pay any material benefit not provided for as of the date of this Agreement under any Company Employee Plan, (v) grant any awards under, or otherwise expand the benefits of or the persons entitled to participate in, any bonus, incentive, performance or other compensation plan or arrangement or benefit or compensation plan, policy, practice or arrangement (including the Company’s Executive Severance Plan, and offer additional persons the opportunity to participate in, or to participate in, the Company’s Executive Severance Plan), including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, (vi) terminate the employment or take other adverse actions with respect to any of the Company executives and other employees identified in Section 6.1(o) of the Company Disclosure Schedules (the “Key Employees”), (vii) employ or offer to employ or promote or offer to promote, terminate or give notice of intent to terminate, any Person at Pay Grade 8 or above (or its equivalent for Subsidiaries using a different pay scale) (based upon the Company’s or its Subsidiaries’ respective existing pay scales) or (viii) take any action (other than (x) in the Ordinary Course of Business with respect to payment of compensation or (y) pursuant to retention agreements entered into prior to December 31, 2004) to fund or in any other way secure the payment of compensation or benefits under any Employee Plan or Contract;
(p) (i) make or rescind any Tax election, (ii) settle or compromise any Tax liability, (iii) amend any Tax Return, (iv) make a request for a written ruling of a taxing authority relating to Taxes or file a request for a pre-filing agreement or similar procedure or (v) enter into a legally binding agreement with a taxing authority with respect to Taxes;
(q) close (except pursuant to the existing terms of leases disclosed in Section 4.12(b) of the Company Disclosure Schedule entered into prior to the date of this Agreement (and without giving effect to the transactions contemplated by this Agreement)) or open any material facility or office, or initiate, compromise or settle any material Proceeding;
(r) permit any transfer or exercise of rights with respect to shares of Company Common Stock in violation of the Stockholder Agreements;
(s) fail to maintain insurance at levels substantially comparable to levels existing as of the date of this Agreement or to timely file claims thereunder (provided that the Company shall not pay or incur liability for any materially increased premium without Parent’s consent, not to be unreasonably withheld);
(t) fail to pay accounts payable and other obligations in the Ordinary Course of Business;
(u) agree to any covenant of the Company or any of its Subsidiaries not to compete or other covenant of the Company or any of its Subsidiaries restricting the development, manufacture, marketing or distribution of the products or services of the Company or any of its Subsidiaries or otherwise limiting the freedom of the Company or any of its Subsidiaries to compete in any line ordinary course of business (other than conflict of interest requirements that are included in any outstanding Bid as of the date hereof, as disclosed in Section 6.1(u) of the Company Disclosure Schedule, that may become effective without the right of negotiation or refusal by Company or its Subsidiaries, by virtue of such Bid being accepted) or consistent with any Person or in any area or to own, operate, sell, transfer, pledge or otherwise dispose of or encumber any material assets or that would so limit the freedom of Parent or any of its affiliates after the consummation of the Offer or the Merger;
(v) with respect to Building, permit Building to take any of the actions listed in paragraphs (a) through (u) of this Section 6.1, to the extent reasonably within the Company’s control, and without limiting the scope of the foregoing, authorize or agree to any such action in the Company’s capacity as a member of Buildingpast practice; or
(wq) authorize any of, or commit or agree, in writing or otherwise, to take any of, the foregoing actions or any action which would cause any representation or warranty of the Company set forth in this Agreement to be inaccurate under the applicable standard included in paragraph (vi)(E) of Annex I, or would materially impair or prevent the satisfaction of any condition in Annex I or Article VIIIactions.
Appears in 1 contract
Samples: Merger Agreement (Ats Corp)
Conduct Prior to Effective Time. Except as Unless otherwise expressly contemplated consented to in writing by this Agreement or with the prior written Buyer, which consent of Parentshall not be unreasonably withheld, from and after the date of this Agreement until the earlier of the termination of this Agreement in accordance with its terms or through the Effective Time, the Company shall, Sellers and shall cause each of its Subsidiaries the Key Employees jointly and severally agree to, act in the Ordinary Course of Business, and use commercially reasonable efforts to maintain and preserve its and each Subsidiary’s business organization, assets, and properties, keep available the services of its present Company Persons and preserve its advantageous business relationships with customers, strategic partners, suppliers, distributors and others having business dealings with it to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time. Without limiting the generality of the foregoing, from and after the date of this Agreement until the earlier of the termination of this Agreement in accordance with its terms or the Effective Time, the Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, without the prior written consent of Parent:
(a) (i) declarecarry on the Business in the ordinary and usual course including, set aside or pay any dividends onbut not limited to, or make any other distributions (whether in cashbilling, securities or other property) in respect ofcollection practices, any inventory transactions and payment of its capital stock; (ii) 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 for shares of its capital stock or any of its other securities; or (iii) purchase, redeem or otherwise acquire any shares of its capital stock or any other securities or any rights, warrants or options (other than the forfeiture (at no cost to the Company or its Subsidiaries) of Company Stock Options pursuant to any Company Stock Plan, by employees in connection with the termination of such employee’s employment) to acquire any such shares or other securities or securities the value of which is measured by such securitiesaccounts payable;
(b) issuekeep and preserve the Acquired Assets in at least as good order, deliver, sell, grant, pledge or otherwise dispose of or encumber any shares of its capital stock, any other voting securities or any securities convertible into or exchangeable for, or any rights, warrants or options to acquire, any such shares, voting securities or convertible or exchangeable securities, “phantom” stock, “phantom” stock rights, stock appreciation rights or stock-based performance units or securities the value of which is measured by such securities (other than the issuance of shares of Company Common Stock upon the exercise of Company Stock Options outstanding condition and repair as existed on the date of this Agreement in accordance with their present terms), issue or accept contributions for the purchase of shares of Company Common Stock pursuant to the ESPP, or amend the terms of any of the foregoing, except as expressly contemplated by Section 3.3 of this Agreement;
(c) amend its Certificate not take any action which adversely effects the goodwill of Incorporationthe Sellers' suppliers, By-laws or other comparable charter or organizational documentsemployees, except as expressly provided by this Agreementcustomers and others having business relations with the Sellers;
(d) acquire (A) by merging or consolidating with, or by purchasing all or a substantial portion of the assets or any stock of, or by any other manner, any business or any other Person or division thereof or (B) any assets that are material, maintain in the aggregate, full force and effect insurance comparable in amount and in scope to the Company and its Subsidiaries, taken as a whole, except purchases of inventory and components in the Ordinary Course of Businesscurrent policies;
(e) except in the Ordinary Course of Business, sell, lease, license, pledge, or otherwise dispose of or encumber perform their obligations under and not change any properties or assets of the Company material terms under all agreements, leases, and other commitments relating to or of any of its Subsidiariesaffecting the Acquired Assets or the Business;
(f) whether or not maintain in the Ordinary Course of Businessfull force and effect and comply with all permits, sellcertificates, dispose oflicenses, or otherwise transfer any assets material approvals, patents, registrations and authorizations relating to the Company Business and its Subsidiaries, taken as a whole (including any accounts, leases, Contracts or Intellectual Property or any assets or the stock of any Subsidiaries)required under all applicable Laws and Regulations;
(g) adopt except in the ordinary course of business consistent with past practice, or implement except with regard to Carbona, not grant any stockholder rights planincrease or make any change in the compensation or benefits of any employee who is to be subsequently employed by Buyer, without the Buyer's prior written consent;
(h) enter into a Contract with respect to any mergerSellers shall not, consolidation, liquidation, dissolution, restructuring, recapitalization or other reorganization or business combination, or any acquisition or disposition of all or any substantial portion without the prior written consent of the assets or securities of the Company or any of its Subsidiaries;Buyer, which consent will not be unreasonably withheld:
(i) (i) incur sell, transfer, Lease or suffer to exist otherwise dispose of any indebtedness for borrowed money of its assets other than such indebtedness reflected on in the Company Balance Sheet or guarantee any such indebtedness ordinary course of another Person, business and consistent with past practice;
(ii) issue, sell amend their certificates of incorporation or amend any debt securities bylaws or warrants merge or other rights consolidate or obligate themselves to acquire any debt securities of the Company do so with or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, entity;
(iii) make change its authorized or issued capital stock or issue any loans rights or advances (in each case other than for employee travel or other business purposes or for employee tuition reimbursement in each case in the Ordinary Course of Business) or capital contributions to, or investments in, any other Person, other than the Company or any options to acquire shares of its direct or indirect wholly owned Subsidiaries or capital stock;
(iv) enter into any hedging agreement contract or other financial agreement or arrangement commitment the value performance of which may change with fluctuations in commodities or equitiesextend beyond the Closing, prices or exchange rates or other derivative instruments;
(j) make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $100,000 except those made in the aggregate for the Company ordinary course of business and its Subsidiaries, taken as a whole;
(k) make any change in its accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve or revalue any assets, or make any change in its fiscal year;
(i) pay, discharge, settle, satisfy, fund or accept any claims, liabilities, disputes, audit or investigation finding or result or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than in accordance with their terms as in effect on the date of this Agreement, of claims, liabilities or obligations reflected or reserved against in, the most recent consolidated financial statements (or the notes thereto) of the Company included in the Company SEC Reports filed prior to the date of this Agreement (to the extent so reflected or reserved against), or (ii) waive any material benefits of, modify in any adverse respect, fail to enforce, or consent to any matter with respect to which its consent is required under, any confidentiality, standstill or similar Contracts to which the Company or any of its Subsidiaries is a party;
(m) terminate any material Contract to which the Company or any of its Subsidiaries is party, or waive, release or assign any material rights or claims (including any write-off or other compromise of any accounts receivable of the Company or any of its Subsidiaries), or except in the Ordinary Course of Business modify or amend any material Contract to which the Company or any of its Subsidiaries is party;
(i) except in the Ordinary Course of Business enter into, or modify the terms of, any Contract relating to the rendering of services or the distribution, sale or marketing by third parties of the products of, or products licensed by, the Company or any of its Subsidiaries or (ii) license, or modify the terms of any license of, any material intellectual property rights to or from any third party, other than non-exclusive licenses which may be canceled without penalty by the Company or its Subsidiaries upon written notice of thirty (30) days or lessare consistent with past practice;
(o) except as expressly provided by Section 3.3, (i) take any action with respect to, adopt, enter into, terminate or amend any employment, severance or similar agreement, policy, practice or arrangement or benefit plan or compensation for the benefit or welfare of any current or former Company Person or any collective bargaining agreement (including with respect to the existing collective bargaining agreement of Integrated Information Technology Corporation (a Subsidiary of the Company), make any offer or take any bargaining position without Parent’s prior written consent, which consent shall not be unreasonably withheld), (ii) increase in any material respect the compensation or benefits of, or pay any bonus to, any Company Person, (iii) amend or accelerate the right to payment or vesting of any compensation or benefits, including any outstanding options or any restricted stock awards, (iv) pay any material benefit not provided for as of the date of this Agreement under any Company Employee Plan, (v) grant any awards under, or otherwise expand the benefits of or the persons entitled to participate in, any bonus, incentive, performance or other compensation plan or arrangement or benefit or compensation plan, policy, practice or arrangement (including the Company’s Executive Severance Plan, and offer additional persons the opportunity to participate in, or to participate in, the Company’s Executive Severance Plan), including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, (vi) terminate the employment or take other adverse actions with respect to any of the Company executives and other employees identified in Section 6.1(o) of the Company Disclosure Schedules (the “Key Employees”), (vii) employ or offer to employ or promote or offer to promote, terminate or give notice of intent to terminate, any Person at Pay Grade 8 or above (or its equivalent for Subsidiaries using a different pay scale) (based upon the Company’s or its Subsidiaries’ respective existing pay scales) or (viii) take any action (other than (x) in the Ordinary Course of Business with respect to payment of compensation or (y) pursuant to retention agreements entered into prior to December 31, 2004) to fund or in any other way secure the payment of compensation or benefits under any Employee Plan or Contract;
(p) (i) make or rescind any Tax election, (ii) settle or compromise any Tax liability, (iii) amend any Tax Return, (iv) make a request for a written ruling of a taxing authority relating to Taxes or file a request for a pre-filing agreement or similar procedure or (v) enter into a legally binding agreement any employment or consulting contract or arrangement with a taxing authority with respect to Taxesany person which is not terminable at will, without penalty or continuing obligation;
(qvi) close (except pursuant to the existing terms of leases disclosed in Section 4.12(b) incur, create or assume any mortgage, pledge, lien, restriction, encumbrance, tenancy, license, encroachment, covenant, condition, right-of-way, easement, claim, security interest, charge or other matter affecting title on any of the Company Disclosure Schedule entered into prior to the date of this Agreement (and without giving effect to the transactions contemplated by this Agreement)) or open any material facility or office, or initiate, compromise or settle any material ProceedingAcquired Assets;
(r) permit any transfer or exercise of rights with respect to shares of Company Common Stock in violation of the Stockholder Agreements;
(s) fail to maintain insurance at levels substantially comparable to levels existing as of the date of this Agreement or to timely file claims thereunder (provided that the Company shall not pay or incur liability for any materially increased premium without Parent’s consent, not to be unreasonably withheld);
(tvii) fail to pay accounts payable and other obligations in before delinquency all taxes, assessments, governmental charges or levies imposed upon its income, profits or assets or otherwise required to be paid by it, or fail to pay when due any liability or charge which, if unpaid, might become a lien or charge upon any of the Ordinary Course of BusinessAcquired Assets;
(uviii) agree declare or pay any dividend or other distribution in respect of any class of its capital stock, or make any payment to redeem, purchase or otherwise acquire, or call for redemption, any covenant of such stock or any securities convertible into or exchangeable for such stock;
(ix) make or authorize the making of any capital expenditure in excess of $50,000;
(x) incur any debt or other obligation for money borrowed except in the ordinary course of Business consistent with past practice;
(xi) volitionally incur any other obligation or liability, absolute or contingent except in the ordinary course of business and consistent with past practice;
(xii) waive or permit the loss of any substantial right except in the ordinary course of Business consistent with past practice;
(xiii) take any action or omit to take any action which will result in a violation of any Law or Regulation or cause a breach of any agreements, contracts or commitments;
(xiv) cause the Buyer, its counsel, accountants, and other representatives, to have full access, during normal business hours, to the properties, books, and records of the Company or any of Sellers and the Key Employees relating to the Business and the Acquired Assets and shall cause its Subsidiaries not officers, employees, agents and representatives to compete or other covenant furnish to the Buyer and its representatives during such period all such information concerning the Business and, subject to the Confidentiality Agreement, the status of the Company or any of its Subsidiaries restricting the development, manufacture, marketing or distribution proposed sale of the products Fabrication Business as the Buyer or services its representatives may reasonably request.
(xv) Nothing contained in this Section 4.01(h) shall prohibit, limit or require the consent of the Company or any of its Subsidiaries or otherwise limiting the freedom of the Company or any of its Subsidiaries Buyer to compete in any line of business (other than conflict of interest requirements that are included in any outstanding Bid as of the date hereof, as disclosed in Section 6.1(u) of the Company Disclosure Schedule, that may become effective without the right of CHI's negotiation or refusal by Company or its Subsidiaries, by virtue of such Bid being accepted) or with any Person or in any area or to own, operate, sell, transfer, pledge or otherwise dispose of or encumber any material assets or that would so limit the freedom of Parent or any of its affiliates after the consummation of the Offer or the Merger;
(v) with respect to Building, permit Building to take any sale of the actions listed in paragraphs (a) through (u) Fabrication Business provided such negotiation or consummation does not constitute a breach of this Section 6.1, to the extent reasonably within the Company’s control, and without limiting the scope of the foregoing, authorize or agree to any such action in the Company’s capacity as a member of Building; or
(w) authorize any of, or commit or agree, in writing or otherwise, to take any of, the foregoing actions or any action which would cause any representation or warranty of the Company set forth in this Agreement to be inaccurate under the applicable standard included in paragraph (vi)(E) of Annex I, or would materially impair or prevent the satisfaction of any condition in Annex I or Article VIIIAgreement.
Appears in 1 contract
Samples: Asset Purchase Agreement (Mediq Inc)
Conduct Prior to Effective Time. Except as expressly contemplated consented to in writing by this Agreement the Parent, which consent shall not be unreasonably withheld, delayed or with the prior written consent of Parentconditioned, from and after the date of this Agreement Agreement, other than as expressly required by this Agreement, until the earlier of the termination of this Agreement in accordance with its terms or the Effective Time, the Company shall, and shall cause each of its Subsidiaries to, act and carry on its business in the Ordinary Course of Businessusual, regular and ordinary course in substantially the same manner as previously conducted, pay its debts and Taxes and perform its other obligations when due (subject to good faith disputes over such debts, Taxes or obligations), comply in all material respects with all applicable laws, rules and regulations, and use commercially its reasonable efforts best efforts, consistent with past practices, to maintain and preserve its and each Subsidiary’s business organization, assets, and properties, keep available the services of its present Company Persons officers and employees and preserve its advantageous business relationships with customers, strategic partners, suppliers, distributors and others having business dealings with it to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time, except that the Company and the Subsidiaries shall not be required to increase the compensation of or otherwise make additional payments to any such persons other than in the Ordinary Course of Business, and maintain insurance at levels substantially comparable to levels existing as of the date of this Agreement. Without limiting the generality of the foregoing, from and after the date of this Agreement until the earlier of the termination of this Agreement in accordance with its terms or the Effective Time, except as specifically set forth in Section 6.1 of the Company Disclosure Schedule or as expressly required by this Agreement, the Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, do any of the following without the prior written consent of Parent:the Parent (which consent will not, in the case of any request by the Company to grant Company Stock Options as would be otherwise prohibited pursuant to clause (b) below, and in the case of any request by the Company to hire new employees as would be otherwise prohibited pursuant to clause (x) below, be unreasonably withheld, conditioned or delayed):
(a) (iA) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, securities or other property) in respect of, any of its capital stockstock (other than dividends and distributions by a direct or indirect wholly owned Subsidiary of the Company to its parent); (iiB) 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 for shares of its capital stock or any of its other securities; or (iiiC) purchase, redeem or otherwise acquire any shares of its capital stock or any other securities or any rights, warrants or options (other than the forfeiture (at no cost to the Company or its Subsidiaries) of Company Stock Options pursuant to any Company Stock Plan, by employees in connection with the termination of such employee’s employment) to acquire any such shares or other securities except, in the case of this clause (C), for (1) the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or securities partial payment of the value of which is measured exercise price payable by such securitiesholder upon exercise of Company Stock Options and Company Warrants to the extent required under the terms of such Company Stock Options and Company Warrants as in effect on the date hereof; or (2) from former employees, directors and consultants in accordance with agreements providing for the repurchase of shares in connection with any termination of services to the Company or any of its Subsidiaries;
(b) issue, deliver, sell, grant, pledge or otherwise dispose of or encumber any shares of its capital stock, any other voting securities or any securities convertible into or exchangeable for, or any rights, warrants or options to acquire, any such shares, voting securities or convertible or exchangeable securities, “phantom” stock, “phantom” stock rights, stock appreciation rights or stock-based performance units or securities the value of which is measured by such securities (other than the issuance of shares of Company Common Stock upon the exercise of Company Stock Options or Company Warrants outstanding on the date of this Agreement in accordance with their present terms), issue or accept contributions and other than the grant of Company Stock Options under the Company Stock Plans, provided that (w) each such Company Stock Option shall have an exercise price that is not less than the fair market value of the Company Common Stock as of the date such option is granted, (x) each such Company Stock Option shall have vesting terms that are consistent with the past practice of the Company, (y) such Company Stock Options may only be granted to new employees in connection with their initial hiring and (z) such Company Stock Options shall not be exercisable for the purchase of more than 500 shares of Company Common Stock pursuant to in the ESPPcase of any individual new employee, or amend more than 10,000 shares of Company Common Stock in the terms of any of the foregoing, except as expressly contemplated by Section 3.3 of this Agreementaggregate);
(c) amend its Certificate certificate of Incorporationincorporation, Byby-laws or other comparable charter or organizational documents, except as expressly provided by this Agreement;
(d) acquire (A) by merging or consolidating with, or by purchasing all or a substantial portion of the assets or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other Person business organization or division thereof or (B) any assets that are material, in the aggregate, to the Company and its Subsidiaries, taken as a whole, except purchases of inventory and components in the Ordinary Course of Business;
(e) except in the Ordinary Course of Business, sell, lease, license, pledge, or otherwise dispose of or encumber any properties or assets of the Company or of any of its Subsidiaries;
(f) whether or not in the Ordinary Course of Business, sell, dispose of, license, or otherwise transfer any assets material to the Company and its Subsidiaries, taken as a whole (including any accounts, leases, Contracts contracts or Intellectual Property intellectual property or any assets or the stock of any Subsidiaries) (it being understood that this Section 6.1(f) does not prohibit the sale by the Company and its Subsidiaries of their products in the Ordinary Course of Business);
(g) adopt or implement any stockholder rights plan;
(h) except for a confidentiality agreement as permitted by Section 7.1, enter into a Contract an agreement with respect to any merger, consolidation, liquidation, dissolution, restructuring, recapitalization or other reorganization liquidation or business combination, or any acquisition or disposition of all or any substantial portion substantially all of the assets or securities of the Company or any of its Subsidiaries;
(i) (iA) incur or suffer to exist any indebtedness for borrowed money other than such indebtedness which existed as of June 30, 2007 as reflected on the Company Balance Sheet or guarantee any such indebtedness of another Personperson, (iiB) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Personperson, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person person or enter into any arrangement having the economic effect of any of the foregoing, (iiiC) make any loans or loans, advances (in each case other than for employee travel or other business purposes or for employee tuition reimbursement in each case routine advances to employees of the Company in the Ordinary Course of Business) or capital contributions to, or investments in, any other Personperson, other than the Company or any of its direct or indirect wholly owned Subsidiaries Subsidiaries, or (ivD) enter into any hedging agreement or other financial agreement or arrangement designed to protect the value of which may change with Company or its Subsidiaries against fluctuations in commodities or equitiesprices, prices or exchange rates or other derivative instrumentsinterest rates;
(j) make any individual capital expenditure or other expenditure with respect to property, plant or equipment in excess of $200,000, or make capital expenditures or other expenditures with respect to property, plant or equipment in any fiscal quarter (pro rated for any partial fiscal quarter) in excess of $100,000 500,000 in the aggregate for the Company and its Subsidiaries, taken as a whole;
(k) make any change in its accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve or revalue any assets, or make any change in its fiscal yearaccrual;
(il) pay, discharge, settle, satisfy, fund settle or accept satisfy any claims, liabilities, disputes, audit or investigation finding or result 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 or in accordance with their terms as in effect on the date of this Agreement, of claims, liabilities or obligations reflected or reserved against in, or contemplated by, the most recent consolidated financial statements (or the notes thereto) of the Company included in the Company SEC Reports filed prior to the date of this Agreement (to the extent so reflected or reserved against), ) or (ii) waive any material benefits of, modify incurred since the date of such financial statements in any adverse respect, fail to enforce, or consent to any matter with respect to which its consent is required under, any confidentiality, standstill or similar Contracts to which the Company or any Ordinary Course of its Subsidiaries is a partyBusiness;
(m) modify, amend or terminate any material Company Material Contract to which the Company or any of its Subsidiaries is party, or knowingly waive, release or assign any material rights or claims (including any write-off or other compromise of any accounts receivable of the Company or any of its Subsidiaries), or except in the Ordinary Course of Business modify or amend any material Contract to which the Company or any of its Subsidiaries is party;
(in) except in the Ordinary Course of Business (A) enter into, into any material contract or modify the terms of, any Contract relating to the rendering of services or the distribution, sale or marketing by third parties of the products of, or products licensed by, the Company or any of its Subsidiaries agreement or (iiB) license, or modify the terms of any license of, any material intellectual property rights to or from any third party, other than non-exclusive licenses which may be canceled without penalty by the Company or its Subsidiaries upon written notice of thirty (30) days or less;
(o) except as expressly provided by Section 3.3required to comply with applicable law or agreements, plans or arrangements existing on the date hereof, (iA) take any action with respect to, adopt, enter into, terminate or amend any employment, severance or similar agreement, policy, practice or arrangement agreement or benefit plan or compensation for the benefit or welfare of any current or former Company Person director, officer, employee or consultant or any collective bargaining agreement (including with respect to the existing collective bargaining agreement of Integrated Information Technology Corporation (a Subsidiary of the Company), make any offer or take any bargaining position without Parent’s prior written consent, which consent shall not be unreasonably withheld)agreement, (iiB) increase in any material respect the compensation or fringe benefits of, or pay any bonus to, any Company Persondirector, officer, key employee or consultant (except for annual salary increases of non-officer employees in the Ordinary Course of Business), (iiiC) amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or any restricted stock awards, (ivD) pay any material benefit not provided for as of the date of this Agreement under any Company Employee Planbenefit plan, (vE) grant any awards under, or otherwise expand the benefits of or the persons entitled to participate in, under any bonus, incentive, performance or other compensation plan or arrangement or benefit or compensation plan, policy, practice or arrangement (including the Company’s Executive Severance Plan, and offer additional persons the opportunity to participate in, or to participate in, the Company’s Executive Severance Plan), including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, (vi) terminate the employment or take other adverse actions with respect to any of the Company executives and other employees identified in Section 6.1(o) of the Company Disclosure Schedules (the “Key Employees”), (vii) employ or offer to employ or promote or offer to promote, terminate or give notice of intent to terminate, any Person at Pay Grade 8 or above (or its equivalent for Subsidiaries using a different pay scale) (based upon the Company’s or its Subsidiaries’ respective existing pay scales) or (viiiF) take any action (other than (x) in the Ordinary Course of Business with respect to payment of compensation or (y) pursuant to retention agreements entered into prior to December 31, 2004) to fund or in any other way secure the payment of compensation or benefits under any Employee Plan employee plan, agreement, contract or Contractarrangement or benefit plan;
(p) (i) make or rescind change any material Tax election, (ii) settle or compromise any material Tax liability, (iii) liability or amend any material Tax Returnreturn, (iv) make a request for a written ruling of a taxing authority relating to Taxes except as required by applicable laws or file a request for a pre-filing agreement or similar procedure or (v) enter into a legally binding agreement with a taxing authority with respect to Taxesregulations;
(q) close (except commence any offering of shares of Company Common Stock pursuant to the existing terms of leases disclosed in Section 4.12(bESPP;
(r) of the Company Disclosure Schedule entered into prior to the date of this Agreement (and without giving effect to the transactions contemplated by this Agreement)) or open any material facility or office, or initiate, compromise or settle any material Proceeding;
(r) permit any transfer litigation or exercise of rights with respect to shares of Company Common Stock in violation of the Stockholder Agreementsarbitration proceeding;
(s) fail to maintain insurance at levels substantially comparable to levels existing as of the date of this Agreement open or to timely file claims thereunder (provided that the Company shall not pay close any facility or incur liability for any materially increased premium without Parent’s consent, not to be unreasonably withheld)office;
(t) fail to pay accounts payable and other obligations in the Ordinary Course of Business, other than to the extent being disputed in good faith;
(u) agree take any action that would cause any Company Compensation Arrangement not to satisfy the requirements of the non-exclusive safe-harbor in Rule 14d-10(d)(2) under the Exchange Act;
(v) authorize any covenant of, or commit to take any of, the foregoing actions;
(w) initiate any pre-clinical trials, clinical trials or any other program, study, investigation or collaboration (or make any filing or application with any Governmental Entity with respect thereto) or materially alter ongoing activities or currently planned activities with respect to ongoing pre-clinical trials, clinical trials, programs, studies, investigations or collaborations (or related filings or applications) of the Company or any of its Subsidiaries not to compete Subsidiaries, each of which is ongoing or other covenant of the Company or any of its Subsidiaries restricting the development, manufacture, marketing or distribution of the products or services of the Company or any of its Subsidiaries or otherwise limiting the freedom of the Company or any of its Subsidiaries to compete in any line of business (other than conflict of interest requirements that are included in any outstanding Bid as of the date hereof, as disclosed planned activity is set forth on in Section 6.1(u6.1(x) of the Company Disclosure Schedule, that may become effective without the right of negotiation or refusal by Company or its Subsidiaries, by virtue of such Bid being accepted) or with any Person or in any area or to own, operate, sell, transfer, pledge or otherwise dispose of or encumber any material assets or that would so limit the freedom of Parent or any of its affiliates after the consummation of the Offer or the Merger;
(v) with respect to Building, permit Building to take any of the actions listed in paragraphs (a) through (u) of this Section 6.1, to the extent reasonably within the Company’s control, and without limiting the scope of the foregoing, authorize or agree to any such action in the Company’s capacity as a member of Building; or
(wx) authorize hire new employees, other than (x) the hiring of any ofnew employee with an annual base salary of less than $100,000, or commit or agree, in writing or otherwise, to take any of, the foregoing actions or any action which would cause any representation or warranty who is replacing (and will have substantially similar responsibilities as) an employee of the Company set forth or one of its Subsidiaries as of the date hereof whose employment with the Company or one of its Subsidiaries terminates after the date hereof and (y) up to five new employees who are not described in this Agreement to be inaccurate under the applicable standard included in paragraph clause (vi)(Ex) and who have annual base salaries of Annex I, or would materially impair or prevent the satisfaction of any condition in Annex I or Article VIIIless than $100,000.
Appears in 1 contract
Samples: Merger Agreement (Perkinelmer Inc)
Conduct Prior to Effective Time. Except as expressly contemplated by this Agreement or with the prior written consent of Parent, from and after the date of this Agreement until the earlier of the termination of this Agreement in accordance with its terms or the Effective Time, the Company shall, and shall cause each of its Subsidiaries to, act in the Ordinary Course of Business, and use commercially reasonable efforts to maintain and preserve its and each Subsidiary’s business organization, assets, and properties, keep available the services of its present Company Persons and preserve its advantageous business relationships with customers, strategic partners, suppliers, distributors and others having business dealings with it to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time. Without limiting the generality of the foregoing, from and after the date of this Agreement until the earlier of the termination of this Agreement in accordance with its terms or the Effective Time, the Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, without the prior written consent of Parent:
(a) (i) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, securities or other property) in respect of, any of its capital stock; (ii) 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 for shares of its capital stock or any of its other securities; or (iii) purchase, redeem or otherwise acquire any shares of its capital stock or any other securities or any rights, warrants or options (other than the forfeiture (at no cost to the Company or its Subsidiaries) of Company Stock Options pursuant to any Company Stock Plan, by employees in connection with the termination of such employee’s employment) to acquire any such shares or other securities or securities the value of which is measured by such securities;
(b) issue, deliver, sell, grant, pledge or otherwise dispose of or encumber any shares of its capital stock, any other voting securities or any securities convertible into or exchangeable for, or any rights, warrants or options to acquire, any such shares, voting securities or convertible or exchangeable securities, “phantom” stock, “phantom” stock rights, stock appreciation rights or stock-based performance units or securities the value of which is measured by such securities (other than the issuance of shares of Company Common Stock upon the exercise of Company Stock Options outstanding on the date of this Agreement in accordance with their present terms), issue or accept contributions for the purchase of shares of Company Common Stock pursuant to the ESPP, or amend the terms of any of the foregoing, except as expressly contemplated by Section 3.3 of this Agreement3.3;
(c) amend its Certificate Articles of Incorporation, By-laws Code of Regulations or other comparable charter or organizational documents, except as expressly provided by this Agreement;
(d) acquire (A) by merging or consolidating with, or by purchasing all or a substantial portion of the assets or any stock of, or by any other manner, any business or any other Person or division thereof or (B) subject to Section 6.1(j), any assets that are material, in the aggregate, to the Company and its Subsidiaries, taken as a whole, except purchases of inventory and components in the Ordinary Course of Business;
(e) except in the Ordinary Course of Business, sell, lease, license, pledge, or otherwise dispose of or encumber any properties or assets of the Company or of any of its Subsidiaries;
(f) whether or not except for sales of inventory in the Ordinary Course of Business, sell, dispose of, or otherwise transfer any assets material to the Company and its Subsidiaries, taken as a whole (including any accounts, leases, Contracts or Intellectual Property or any assets or the stock of any Subsidiaries);
(g) adopt or implement any stockholder rights plan, or other device or plan designed or intended to impede, impair or prevent the transactions contemplated hereby;
(h) except as contemplated by Sections 6.2(e) and 9.1(d)(i), enter into a Contract with respect to any merger, consolidation, liquidation, dissolution, restructuring, recapitalization or other reorganization or business combination, or any acquisition or disposition of all or any substantial portion of the assets or securities of the Company or any of its Subsidiaries;
(i) (i) incur or suffer to exist any indebtedness for borrowed money other than such indebtedness reflected on the Company Balance Sheet and trade and accounts payable in the Ordinary Course of Business or guarantee any such indebtedness of another Person, (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans or advances (in each case other than for employee travel or other business purposes or for employee tuition reimbursement in each case in the Ordinary Course of Business) or capital contributions to, or investments in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries or (iv) enter into any hedging agreement or other financial agreement or arrangement the value of which may change with fluctuations in commodities or equities, prices or exchange rates or other derivative instruments;
(j) make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $100,000 80,000 in the aggregate for the Company and its Subsidiaries, taken as a whole;
(k) make any change in its accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or, except as so required, or change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve or revalue any assets, or make any change in its fiscal year, except for any election to adopt the goodwill impairment annual testing rules under GAAP and except as may be required by GAAP or applicable Law;
(i) other than in the Ordinary Course of Business, pay, discharge, settle, satisfy, fund or accept any claims, liabilities, disputes, audit or investigation finding or result or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than in accordance with their terms as in effect on the date of this Agreement, of claims, liabilities or obligations reflected or reserved against in, the most recent consolidated financial statements (or the notes thereto) of the Company included in the Company SEC Reports filed prior to the date of this Agreement (to the extent so reflected or reserved against), or (ii) waive any material benefits of, modify in any adverse respect, fail to enforce, or consent to any matter with respect to which its consent is required under, any confidentiality, standstill or similar Contracts to which the Company or any of its Subsidiaries is a party;
(m) terminate any material Contract to which the Company or any of its Subsidiaries is partyparty (other than any such Contract that expires pursuant to its terms), or waive, release or assign any material rights or claims (including any write-off or other compromise of any accounts receivable of the Company or any of its Subsidiaries), or except in the Ordinary Course of Business modify or amend any material Contract to which the Company or any of its Subsidiaries is party;
(i) except in the Ordinary Course of Business Business, enter into, or modify the terms of, any Contract relating to the rendering of services or the distribution, sale or marketing by third parties of the products of, or products licensed by, the Company or any of its Subsidiaries or (ii) license, or modify the terms of any license of, any material intellectual property rights to or from any third party, other than non-exclusive licenses which may be canceled without penalty by the Company or its Subsidiaries upon written notice of thirty (30) 30 days or less;
(o) except as expressly provided by Section 3.3, (i) take any action with respect to, adopt, enter into, terminate or amend any employment, severance or similar agreement, policy, practice or arrangement or benefit plan or compensation for the benefit or welfare of any current or former Company Person or any collective bargaining agreement (including with respect to the existing collective bargaining agreement of Integrated Information Technology Corporation (a Subsidiary of the Company), make any offer or take any bargaining position without Parent’s prior written consent, which consent shall not be unreasonably withheld)agreement, (ii) increase in any material respect the compensation or benefits of, or pay any bonus to, any Company Person, (iii) amend or accelerate the right to payment or vesting of any compensation or benefits, including any outstanding options or any restricted stock awards, (iv) pay any material benefit not provided for as of the date of this Agreement under any Company Employee Plan, (v) adopt, grant any awards under, or otherwise expand the benefits of or the persons Persons entitled to participate in, any bonus, incentive, performance performance, severance or other compensation plan or arrangement or benefit or compensation plan, policy, practice or arrangement (including the Company’s Executive Severance Plan, and offer additional persons the opportunity to participate in, or to participate in, the Company’s Executive Severance Plan)arrangement, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, (vi) terminate the employment or take other adverse actions with respect to any of the Company executives and other employees identified in Section 6.1(o) of the Company Disclosure Schedules Schedule (the “Key Employees”), (vii) employ or offer to employ or promote or offer to promote, terminate or give notice of intent to terminate, any Key Employee or other executive officer of the Company or Person at Pay Grade 8 or above (or its performing an equivalent function for Subsidiaries using a different pay scale) (based upon any of the Company’s or its Subsidiaries’ respective existing pay scales) , or (viii) take any action (other than (x) in the Ordinary Course of Business with respect to payment of compensation or (y) pursuant to retention agreements entered into prior to December 31, 2004compensation) to fund or in any other way secure the payment of compensation or benefits under any Employee Benefit Plan or Contract; provided, however, that notwithstanding the foregoing, the Company (I) may change the administrator or payor, but not materially increase the benefits or otherwise increase the amounts paid by the Company, under the Company Employee Plan that is a group health plan within the meaning of Section 5000(b)(1) of the Code and (II) pay in the aggregate up to $5,000 in cash bonuses to employees who are not Key Employees;
(p) (i) make or rescind any Tax election, (ii) settle or compromise any Tax liability, (iii) amend any Tax Return, (iv) make a request for a written ruling of a taxing authority relating to Taxes or file a request for a pre-filing agreement or similar procedure or (v) enter into a legally binding agreement with a taxing authority with respect to Taxes;
(q) close (except pursuant to the existing terms of leases entered into prior to the date of this Agreement disclosed in Section 4.12(b) of the Company Disclosure Schedule entered into prior to the date of this Agreement (and without giving effect to the transactions contemplated by this Agreement)) or open (except the opening of the Company’s facility in Singapore as contemplated as of the date of this Agreement) any material facility or office, or initiate, compromise or settle any material Proceeding;
(r) permit any transfer or exercise of rights with respect to shares of Company Common Stock in violation of the Stockholder Agreements;
(s) fail to maintain insurance at levels substantially comparable to levels existing as of the date of this Agreement or to timely file claims thereunder (provided that the Company shall not pay or incur liability for any materially increased premium without Parent’s consent, not to be unreasonably withheld);
(t) fail to pay accounts payable and other obligations in the Ordinary Course of Business;
(u) agree to any covenant of the Company or any of its Subsidiaries not to compete or other covenant of the Company or any of its Subsidiaries restricting the development, manufacture, marketing or distribution of the products or services of the Company or any of its Subsidiaries or otherwise limiting the freedom of the Company or any of its Subsidiaries to compete in any line of business (other than conflict of interest requirements that are included in any outstanding Bid as of the date hereof, as disclosed in Section 6.1(u) of the Company Disclosure Schedule, that may become effective without the right of negotiation or refusal by Company or its Subsidiaries, by virtue of such Bid being accepted) or with any Person or in any area or to own, operate, sell, transfer, pledge or otherwise dispose of or encumber any material assets or that would so limit the freedom of Parent or any of its affiliates after the consummation of the Offer or the Merger;
(v) with respect to Building, permit Building to take any of the actions listed in paragraphs (a) through (u) of this Section 6.1, to the extent reasonably within the Company’s control, and without limiting the scope of the foregoing, authorize or agree to any such action in the Company’s capacity as a member of Building; or
(wv) authorize any of, or commit or agree, in writing or otherwise, to take any of, the foregoing actions or any action which would cause any representation or warranty of the Company set forth in this Agreement to be inaccurate under the applicable standard included in paragraph (vi)(ESection 8.2(a) of Annex I, or would materially impair or prevent the satisfaction of any condition in Annex I or Article VIII.
Appears in 1 contract
Conduct Prior to Effective Time. Except as expressly contemplated by this Agreement or with Agreement, as consented to in writing by the prior written consent of Parent, from and after the date of this Agreement until the earlier of the termination of this Agreement in accordance with its terms or the Effective Time, the Company shall, and shall cause each of its Subsidiaries to, act in the Ordinary Course of Business, and use commercially reasonable efforts to maintain and preserve its and each Subsidiary’s 's business organization, assets, and properties, keep available the services of its present Company Persons officers and employees and preserve its advantageous business relationships with customers, strategic partners, suppliers, distributors and others having business dealings with it to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time. Without limiting the generality of the foregoing, from and after the date of this Agreement until the earlier of the termination of this Agreement in accordance with its terms or the Effective Time, the Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, without the prior written consent of the Parent:
(a) (iA) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, securities or other property) in respect of, any of its capital stockstock (other than dividends and distributions by a direct or indirect wholly owned Subsidiary of the Company to its parent); (iiB) 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 for shares of its capital stock or any of its other securities; or (iiiC) purchase, redeem or otherwise acquire any shares of its capital stock or any other securities or any rights, warrants or options (other than the forfeiture (at no cost to the Company or its Subsidiaries) of Company Stock Options pursuant to any Company Stock Plan, by employees in connection with the termination of such employee’s employment) to acquire any such shares or other securities or securities the value of which is measured by such securities;
(b) issue, deliver, sell, grant, pledge or otherwise dispose of or encumber any shares of its capital stock, any other voting securities or any securities convertible into or exchangeable for, or any rights, warrants or options to acquire, any such shares, voting securities or convertible or exchangeable securities, “phantom” stock, “phantom” stock rights, stock appreciation rights or stock-based performance units or securities the value of which is measured by such securities (other than the issuance of shares of Company Common Stock Shares upon the exercise of Company Stock Options or Company Warrants outstanding on the date of this Agreement in accordance with their present terms), issue or accept contributions for the purchase of shares of Company Common Stock pursuant to the ESPP, or amend the terms of any of the foregoing, except as expressly contemplated by Section 3.3 of this Agreement;
(c) amend its Certificate articles of Incorporationincorporation, Byby-laws or other comparable charter or organizational documents, except as expressly provided by this Agreement;
(d) acquire (A) by merging or consolidating with, or by purchasing all or a substantial portion of the assets or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other Person business organization or division thereof or (B) any assets that are material, in the aggregate, to the Company and its Subsidiaries, taken as a whole, except purchases of inventory and components in the Ordinary Course of Business;
(e) except in the Ordinary Course of Business, sell, lease, license, pledge, or otherwise dispose of or encumber any properties or assets of the Company or of any of its Subsidiaries;
(f) whether or not in the Ordinary Course of Business, sell, dispose of, or otherwise transfer any assets material to the Company and its Subsidiaries, taken as a whole (including any accounts, leases, Contracts contracts or Intellectual Property intellectual property or any assets or the stock of any Subsidiaries, but excluding the sale or non-exclusive license of products in the Ordinary Course of Business);
(g) adopt or implement any stockholder rights planplan or, except as provided in Section 4.23, alter or further amend the Rights Agreement or the Rights;
(h) enter into a Contract an agreement with respect to any merger, consolidation, liquidation, dissolution, restructuring, recapitalization or other reorganization liquidation or business combination, or any acquisition or disposition of all or any substantial portion substantially all of the assets or securities of the Company or any of its Subsidiaries;
(i) (iA) except as permitted under Section 7.8(e), incur or suffer to exist any indebtedness for borrowed money other than such indebtedness reflected on the Company Balance Sheet or guarantee any such indebtedness of another Personperson, (iiB) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Personperson, enter into any “"keep well” " or other agreement to maintain any financial statement condition of another Person person or enter into any arrangement having the economic effect of any of the foregoing, (iiiC) make any loans or loans, advances (in each case other than for employee travel or other business purposes or for employee tuition reimbursement in each case routine advances to employees of the Company in the Ordinary Course of Business) or capital contributions to, or investments in, any other Personperson, other than the Company or any of its direct or indirect wholly owned Subsidiaries Subsidiaries, or (ivD) enter into any hedging agreement or other financial agreement or arrangement the value of which may change with fluctuations in commodities or equities, prices or exchange rates or other derivative instrumentsrates;
(j) make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $100,000 500,000 in the aggregate for the Company and its Subsidiaries, taken as a whole;
(k) make any change in its accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve or revalue any assets, or make any change in its fiscal yearreserve;
(il) (A) pay, discharge, settle, satisfy, fund settle or accept satisfy any claims, liabilities, disputes, audit or investigation finding or result 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 or in accordance with their terms as in effect on the date of this Agreement, of claims, liabilities or obligations reflected or reserved against in, or contemplated by, the most recent consolidated financial statements (or the notes thereto) of the Company included in the Company SEC Reports filed prior to the date of this Agreement (to the extent so reflected or reserved against)) or incurred since the date of such financial statements in the Ordinary Course of Business, or (iiB) waive any material benefits of, modify in any adverse respect, fail to enforce, or consent to any matter with respect to which its consent is required under, any confidentiality, standstill or similar Contracts agreements to which the Company or any of its Subsidiaries is a party;
(m) modify, amend or terminate any material Contract contract or agreement to which the Company or any of its Subsidiaries is party, other than contemplated modifications, terminations or amendments reflected on the Company Disclosure Schedule, or knowingly waive, release or assign any material rights or claims (including any write-off or other compromise of any accounts receivable of the Company or any of its Subsidiaries), or except in the Ordinary Course of Business modify or amend any material Contract to which the Company or any of its Subsidiaries is party;
(iA) except in the Ordinary Course of Business enter into, into any contract or modify the terms of, any Contract agreement relating to the rendering of services or the distribution, sale or marketing by third parties of the products of, or products licensed by, the Company or any of its Subsidiaries or (iiB) license, or modify the terms of any license of, any material intellectual property rights to or from any third party, other than non-exclusive licenses which may not be canceled without penalty by the Company or its Subsidiaries upon written notice of thirty (30) 30 days or less;
(o) except as expressly provided by Section 3.3required to comply with applicable law or agreements, plans or arrangements existing on the date hereof, (iA) take any action with respect to, adopt, enter into, terminate or amend any employment, severance or of similar agreement, policy, practice or arrangement agreement or benefit plan or compensation for the benefit or welfare of any current or former Company Person director, officer, employee or consultant or any collective bargaining agreement (including with respect to the existing collective bargaining agreement of Integrated Information Technology Corporation (a Subsidiary of the Company), make any offer or take any bargaining position without Parent’s prior written consent, which consent shall not be unreasonably withheld)agreement, (iiB) increase in any material respect the compensation or fringe benefits of, or pay any bonus to, any Company Persondirector, officer, key employee or consultant, (iiiC) amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or any restricted stock awardsawards (other than the acceleration of the Company's Stock Options for the purpose of treatment of such options under Section 7.8 hereof), (ivD) pay any material benefit not provided for as of the date of this Agreement under any Company Employee Planbenefit plan, (vE) grant any awards under, or otherwise expand the benefits of or the persons entitled to participate in, under any bonus, incentive, performance or other compensation plan or arrangement or benefit or compensation plan, policy, practice or arrangement (including the Company’s Executive Severance Plan, and offer additional persons the opportunity to participate in, or to participate in, the Company’s Executive Severance Plan), including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, (vi) terminate the employment or take other adverse actions with respect to any of the Company executives and other employees identified in Section 6.1(o) of the Company Disclosure Schedules (the “Key Employees”), (vii) employ or offer to employ or promote or offer to promote, terminate or give notice of intent to terminate, any Person at Pay Grade 8 or above (or its equivalent for Subsidiaries using a different pay scale) (based upon the Company’s or its Subsidiaries’ respective existing pay scales) or (viiiF) take any action (other than (x) in the Ordinary Course of Business with respect to payment of compensation or (y) pursuant to retention agreements entered into prior to December 31, 2004) to fund or in any other way secure the payment of compensation or benefits under any Employee Plan employee plan, agreement, contract or Contractarrangement or benefit plan;
(p) (i) make or rescind any Tax election, (ii) settle or compromise any Tax liability, (iii) liability or amend any Tax Return, (iv) make a request for a written ruling of a taxing authority relating to Taxes or file a request for a pre-filing agreement or similar procedure or (v) enter into a legally binding agreement with a taxing authority with respect to Taxesreturn;
(q) close (except commence any offering of Shares pursuant to the existing terms of leases disclosed ESPP (as defined in Section 4.12(b7.9);
(r) of the Company Disclosure Schedule entered into prior to the date of this Agreement (and without giving effect to the transactions contemplated by this Agreement)) or open any material facility or office, or initiate, compromise or settle any material Proceeding;
(r) permit any transfer litigation or exercise of rights with respect to shares of Company Common Stock in violation of the Stockholder Agreementsarbitration proceeding;
(s) open or close any material facility or office;
(t) fail to maintain insurance at levels substantially comparable to levels existing as of the date of this Agreement or to timely file claims thereunder (provided that the Company shall not pay or incur liability for any materially increased premium without Parent’s consent, not to be unreasonably withheld)Agreement;
(tu) fail to pay accounts payable and other obligations in the Ordinary Course of Business;
(u) agree to any covenant of the Company or any of its Subsidiaries not to compete or other covenant of the Company or any of its Subsidiaries restricting the development, manufacture, marketing or distribution of the products or services of the Company or any of its Subsidiaries or otherwise limiting the freedom of the Company or any of its Subsidiaries to compete in any line of business (other than conflict of interest requirements that are included in any outstanding Bid as of the date hereof, as disclosed in Section 6.1(u) of the Company Disclosure Schedule, that may become effective without the right of negotiation or refusal by Company or its Subsidiaries, by virtue of such Bid being accepted) or with any Person or in any area or to own, operate, sell, transfer, pledge or otherwise dispose of or encumber any material assets or that would so limit the freedom of Parent or any of its affiliates after the consummation of the Offer or the Merger;
(v) with respect to Building, permit Building to take any of the actions listed in paragraphs (a) through (u) of this Section 6.1, to the extent reasonably within the Company’s control, and without limiting the scope of the foregoing, authorize or agree to any such action in the Company’s capacity as a member of Building; or
(wv) authorize any of, or commit or agree, in writing or otherwise, to take any of, the foregoing actions or any action which would cause any representation or warranty of the Company set forth in this Agreement to be inaccurate under the applicable standard included in paragraph (vi)(EE) of Annex I, or would materially impair or prevent the satisfaction of any condition in Annex I or Article VIII.
Appears in 1 contract
Conduct Prior to Effective Time. Except as expressly contemplated by this Agreement otherwise specifically set forth herein or with as disclosed in the Disclosure Schedule, the Company covenants and agrees that, unless the Parent shall otherwise consent (which consent shall not be unreasonably withheld or delayed), prior written consent of Parent, from and after the date of this Agreement until the earlier of the termination of this Agreement in accordance with its terms or to the Effective Time:
(a) The business of the Company and its Continuing Subsidiaries shall in all material respects be conducted only in, and the Company and its Continuing Subsidiaries shall not take any matter or action except in, the Company shallordinary course of business, and the Company shall cause each of its Subsidiaries to, act in the Ordinary Course of Business, and use commercially reasonable efforts efforts, to maintain and preserve its and each Continuing Subsidiary’s 's business organization, assets, employees and properties, keep available the services of its present Company Persons and preserve its advantageous business relationships with customers, strategic partners, suppliers, distributors and others having business dealings with it to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time. Without limiting the generality of the foregoing, from and after the date of this Agreement until the earlier of the termination of this Agreement in accordance with its terms or the Effective Time, relationships;
(b) Neither the Company shall not, and shall not permit nor any of its Continuing Subsidiaries to, shall directly or indirectly, without indirectly do any of the prior written consent of Parent:following (except as contemplated by this Agreement or the Distribution Agreement):
(a) (i) declareother than upon exercise of Options outstanding on the date hereof pursuant to the Plans, set aside the sale of Shares pursuant to the ESPP or pay the issuance of Shares pursuant to any dividends ondeferred compensation arrangement, issue, sell, pledge, dispose of or encumber, or make any other distributions (whether in cashauthorize, securities propose or other property) in respect agree to the issuance, sale, pledge, disposition or encumbrance of, any shares of, or any options, warrants or rights of its any kind to acquire any shares of, or any securities convertible into or exchangeable or exercisable for any shares of, capital stock; (ii) split, combine stock of any class of the Company or reclassify any of its capital stock Continuing Subsidiaries or issue or authorize the issuance of any other securities in respect of, in lieu of of, or in substitution for shares Shares outstanding as of its capital stock or any of its other securities; or (iii) purchase, redeem or otherwise acquire any shares of its capital stock or any other securities or any rights, warrants or options (other than the forfeiture (at no cost to the Company or its Subsidiaries) of Company Stock Options pursuant to any Company Stock Plan, by employees in connection with the termination of such employee’s employment) to acquire any such shares or other securities or securities the value of which is measured by such securitiesdate hereof;
(bii) issue, deliver, sell, grant, lease pledge or otherwise dispose of or encumber any shares of its capital stock, any other voting securities or any securities convertible into or exchangeable for, or any rights, warrants or options to acquire, any such shares, voting securities or convertible or exchangeable securities, “phantom” stock, “phantom” stock rights, stock appreciation rights or stock-based performance units or securities the value of which is measured by such securities (other than the issuance of shares of Company Common Stock upon the exercise of Company Stock Options outstanding on the date of this Agreement in accordance with their present terms), issue or accept contributions for the purchase of shares of Company Common Stock pursuant to the ESPP, or amend the terms of any of the foregoing, except as expressly contemplated by Section 3.3 of this Agreement;
(c) amend its Certificate of Incorporation, By-laws or other comparable charter or organizational documents, except as expressly provided by this Agreement;
(d) acquire (A) by merging or consolidating with, or by purchasing all or a substantial portion of the assets or any stock of, or by any other manner, any business or any other Person or division thereof or (B) any assets that are material, in the aggregate, to the Company and its Subsidiaries, taken as a whole, except purchases of inventory and components in the Ordinary Course of Business;
(e) except in the Ordinary Course of Business, sell, lease, license, pledge, or otherwise dispose of or encumber any properties or assets of the Company or of any of its Subsidiaries;
(f) whether or not in the Ordinary Course of Business, sell, dispose of, or otherwise transfer any assets material to the Company and its Subsidiaries, Continuing Subsidiaries taken as a whole (including any accountswhole, leases, Contracts or Intellectual Property or any assets or except in the stock ordinary course of any Subsidiaries)business;
(giii) adopt amend its charter or implement any stockholder rights planby-laws or similar organizational documents;
(hiv) split, combine or reclassify any shares of its capital stock or declare, set aside for payment or pay any dividend or distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock other than, with respect to dividends or distributions, cash dividends and distributions by a wholly-owned Subsidiary of the Company to the Company or to a Subsidiary all of the capital stock of which (other than directors' qualifying shares) is owned directly or indirectly by the Company;
(v) redeem, purchase or otherwise acquire or offer to redeem, purchase or otherwise acquire any of its capital stock or rights to acquire capital stock, except the repurchase by the Company of restricted common stock in accordance with the terms of the Plans;
(vi) except pursuant to Section 5.5, enter into a Contract an agreement with respect to any merger, consolidation, liquidation, dissolution, restructuring, recapitalization or other reorganization liquidation or business combination, or any acquisition or disposition of all or any substantial portion substantially all of the assets or securities of the Company or any of its SubsidiariesCompany;
(ivii) except pursuant to Section 5.5, enter into an agreement with respect to the disposition of a material amount of assets or securities, or any release or relinquishment of any material contract rights, or any comparable event (iincluding, but not limited to, the sale or other disposition of any treasury stock (other than in connection with the issuance of Shares pursuant to any deferred compensation arrangement));
(viii) transfer the stock of any Continuing Subsidiary to any other Subsidiary or any assets or liabilities to any new or existing Subsidiary;
(ix) acquire (by merger, consolidation or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof or make any investment either by purchase of stock or securities, contributions to capital (other than to wholly-owned Subsidiaries), property transfer or purchase of any property or assets of any other individual or entity (other than providing the initial capital of any investment company sponsored by a Continuing Subsidiary);
(x) other than in the ordinary course of business, incur or suffer to exist any indebtedness for borrowed money other than such indebtedness reflected on the Company Balance Sheet or guarantee any such indebtedness of another Person, (ii) issue, sell or amend issue any debt securities or warrants assume, guarantee, endorse or other rights to acquire any debt securities of otherwise as an accommodation become responsible for, the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect obligations of any of the foregoingother individual or entity, (iii) or make any loans or advances (in each case other than for employee travel or other business purposes or for employee tuition reimbursement in each case in the Ordinary Course of Business) or capital contributions to, or investments in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries or (iv) enter into any hedging agreement or other financial agreement or arrangement the value of which may change with fluctuations in commodities or equities, prices or exchange rates or other derivative instrumentsadvances;
(jxi) make authorize, recommend or propose any capital expenditures or other expenditures with respect to property, plant or equipment material change in excess of $100,000 in the aggregate for the Company and its Subsidiaries, taken as a wholecapitalization;
(kxii) make any change in its accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve or revalue any assets, or make any change in its fiscal yearreserve;
(ixiii) pay, discharge, settle, satisfy, fund or accept (A) revalue any claims, liabilities, disputes, audit or investigation finding or result or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than in accordance with their terms as in effect on the date of this Agreement, of claims, liabilities or obligations reflected or reserved against in, the most recent consolidated financial statements (or the notes thereto) of the Company included in the Company SEC Reports filed prior to the date of this Agreement (to the extent so reflected or reserved against), or (ii) waive any material benefits of, modify in any adverse respect, fail to enforce, or consent to any matter with respect to which its consent is required under, any confidentiality, standstill or similar Contracts to which the Company or any of its Subsidiaries is a party;
(m) terminate any material Contract to which the Company or any of its Subsidiaries is party, or waive, release or assign any material rights or claims (including any write-off or other compromise of any accounts receivable assets of the Company or any of its Subsidiaries, other than reevaluations that are required in accordance with generally accepted accounting principles or for purposes of Section 244 of Delaware Law or (B) change or modify in any material respect any existing accounting principle, method or practice other than as required by generally accepted accounting principles;
(xiv) make any capital expenditure or commitment for which it is not contractually bound at the date hereof, except for capital expenditures or commitments not to exceed $2.5 million per year in the aggregate;
(xv) enter into any new Material Contract (other than in the ordinary course of business), or except modify in the Ordinary Course of Business modify or amend any material Contract respect materially adverse to which the Company or any of its Continuing Subsidiaries is partyany existing Material Contract;
(ixvi) except settle any material actions, suits, proceedings or investigations other than any settlement which involves only the payment of damages in an amount less than $1 million and does not involve injunctive or other equitable relief; or
(xvii) authorize or propose any of the Ordinary Course of Business enter intoforegoing, or enter into or modify the terms ofany contract, agreement, commitment or arrangement to do any Contract relating to the rendering of services or the distribution, sale or marketing by third parties of the products of, or products licensed byforegoing.
(c) Notwithstanding the foregoing, the Company shall be permitted to, and shall use commercially reasonable efforts to, enter into an agreement to sell or otherwise dispose of, and sell or otherwise dispose of, the Company's interest in Pioneer Universal Pension Fund Company prior to the Effective Time. The Company shall consult with the Parent in structuring and carrying out the disposition of Pioneer Universal Pension Fund Company. In addition, notwithstanding the foregoing, the Company and the Parent shall cooperate in good faith regarding the status of Beijing Pioneer Zhong Investment Consulting Co., Ltd. as a Continuing Subsidiary and the Company shall use commercially reasonable efforts to effect any mutually acceptable arrangement regarding Beijing Pioneer Zhong Investment Consulting Co., Ltd.
(d) Neither the Company nor any of its Continuing Subsidiaries shall adopt or amend (ii) license, or modify the terms of any license of, any material intellectual property rights to or from any third party, other than non-exclusive licenses which except as may be canceled without penalty required by the Company law or its Subsidiaries upon written notice of thirty (30under this Agreement) days any bonus, profit sharing, compensation, stock option, stock purchase, pension, retirement, deferred compensation, employment or less;
(o) except as expressly provided by Section 3.3other employee benefit plan, (i) take any action with respect to, adopt, enter into, terminate or amend any employment, severance or similar agreement, policytrust, practice fund or other arrangement or benefit plan or compensation for the -30- 38 benefit or welfare of any current director, officer or employee or former director, officer or employee or, except in the ordinary course of business, increase the compensation or fringe benefits of any employee or former director, officer or employee or pay any benefit not required by any existing plan, arrangement or agreement;
(e) Neither the Company Person or nor any collective bargaining agreement (including of its Continuing Subsidiaries shall take any action other than in the ordinary course of business with respect to the existing collective bargaining agreement of Integrated Information Technology Corporation (a Subsidiary of the Company), make any offer or take any bargaining position without Parent’s prior written consent, which consent shall not be unreasonably withheld), (ii) increase in any material respect the compensation or benefits of, or pay any bonus to, any Company Person, (iii) amend or accelerate the right to payment or vesting grant of any compensation severance or benefits, including any outstanding options termination pay or any restricted stock awards, (iv) pay any material benefit not provided for as of the date of this Agreement under any Company Employee Plan, (v) grant any awards under, or otherwise expand the benefits of or the persons entitled to participate in, any bonus, incentive, performance or other compensation plan or arrangement or benefit or compensation plan, policy, practice or arrangement (including the Company’s Executive Severance Plan, and offer additional persons the opportunity to participate in, or to participate in, the Company’s Executive Severance Plan), including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, (vi) terminate the employment or take other adverse actions with respect to any increase of benefits payable under its severance or termination pay policies in effect on the Company executives and other employees identified in Section 6.1(o) of the Company Disclosure Schedules (the “Key Employees”), (vii) employ or offer to employ or promote or offer to promote, terminate or give notice of intent to terminate, any Person at Pay Grade 8 or above (or its equivalent for Subsidiaries using a different pay scale) (based upon the Company’s or its Subsidiaries’ respective existing pay scales) or (viii) take any action (other than (x) in the Ordinary Course of Business with respect to payment of compensation or (y) pursuant to retention agreements entered into prior to December 31, 2004) to fund or in any other way secure the payment of compensation or benefits under any Employee Plan or Contractdate hereof;
(pf) (i) Neither the Company nor any of its Continuing Subsidiaries shall make or rescind any Tax electiontax election or, (ii) except in the ordinary course of business, settle or compromise any Tax federal, state, local or foreign tax liability, (iii) amend any Tax Return, (iv) make a request for a written ruling of a taxing authority relating to Taxes or file a request for a pre-filing agreement or similar procedure or (v) enter into a legally binding agreement with a taxing authority with respect to Taxes;; and
(qg) close (except pursuant to the existing terms of leases disclosed in Section 4.12(b) of Neither the Company Disclosure Schedule entered into prior to the date of this Agreement (and without giving effect to the transactions contemplated by this Agreement)) or open any material facility or office, or initiate, compromise or settle any material Proceeding;
(r) permit any transfer or exercise of rights with respect to shares of Company Common Stock in violation of the Stockholder Agreements;
(s) fail to maintain insurance at levels substantially comparable to levels existing as of the date of this Agreement or to timely file claims thereunder (provided that the Company shall not pay or incur liability for any materially increased premium without Parent’s consent, not to be unreasonably withheld);
(t) fail to pay accounts payable and other obligations in the Ordinary Course of Business;
(u) agree to any covenant of the Company or nor any of its Continuing Subsidiaries not to compete or other covenant of the Company or any of its Subsidiaries restricting the development, manufacture, marketing or distribution of the products or services of the Company or any of its Subsidiaries or otherwise limiting the freedom of the Company or any of its Subsidiaries to compete in any line of business (other than conflict of interest requirements that are included in any outstanding Bid as of the date hereof, as disclosed in Section 6.1(u) of the Company Disclosure Schedule, that may become effective without the right of negotiation or refusal by Company or its Subsidiaries, by virtue of such Bid being accepted) or with any Person or in any area or to own, operate, sell, transfer, pledge or otherwise dispose of or encumber any material assets or that would so limit the freedom of Parent or any of its affiliates after the consummation of the Offer or the Merger;
(v) with respect to Building, permit Building to take any of the actions listed in paragraphs (a) through (u) of this Section 6.1, to the extent reasonably within the Company’s control, and without limiting the scope of the foregoing, authorize or agree to any such action in the Company’s capacity as a member of Building; or
(w) authorize any of, or commit or shall agree, in writing or otherwise, to take any of, of the foregoing actions or any action which would cause make any representation or warranty of the Company set forth in this Agreement to be inaccurate under the applicable standard included Article 3 hereof untrue or incorrect in paragraph (vi)(E) of Annex Iany material respect, or would materially impair or prevent the satisfaction occurrence of any condition in Annex I or Article VIII6 hereof.
Appears in 1 contract
Samples: Merger Agreement (Pioneer Group Inc)
Conduct Prior to Effective Time. Except as expressly contemplated consented to in writing by the Parent, which consent shall not be unreasonably withheld, delayed or conditioned, or except as expressly required by the terms of this Agreement or with the prior written consent of ParentAgreement, from and after the date of this Agreement until the earlier of the termination of this Agreement in accordance with its terms or the Effective Time, the Company shall, and shall cause each of its Subsidiaries to, act and carry on its business in the Ordinary Course of Businessusual, regular and ordinary course in substantially the same manner as previously conducted, pay its debts and Taxes and perform its other obligations when due (subject to good faith disputes over such debts, Taxes or obligations), comply in all material respects with all applicable laws, rules and regulations, and use commercially reasonable efforts best efforts, consistent with past practices, to maintain and preserve its and each Subsidiary’s of its Subsidiaries’ business organization, assets, and properties, keep available the services of its present Company Persons officers and employees and preserve its advantageous business relationships with customers, strategic partners, suppliers, distributors and others having business dealings with it to the end that its goodwill and ongoing business shall be unimpaired at and after the Effective Time. Without limiting the generality of the foregoing, from and after the date of this Agreement until the earlier of the termination of this Agreement in accordance with its terms or the Effective Time, except as specifically set forth in Section 5.1 of the Company Disclosure Schedule or as expressly required by this Agreement, the Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, do any of the following without the prior written consent of Parent:the Parent (which shall not be unreasonably withheld or delayed in the case of a request for consent pursuant to clause (ii) of Section 5.1(b)):
(a) (i) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, securities or other property) in respect of, any of its capital stockstock (other than dividends and distributions by a direct or indirect wholly owned Subsidiary of the Company to its parent); (ii) 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 for shares of its capital stock or any of its other securities; or (iii) purchase, redeem or otherwise acquire any shares of its capital stock or any other securities or any rights, warrants or options (other than the forfeiture (at no cost to the Company or its Subsidiaries) of Company Stock Options pursuant to any Company Stock Plan, by employees in connection with the termination of such employee’s employment) to acquire any such shares or other securities except, in the case of this clause (iii), for (A) the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or securities partial payment of the value of which is measured exercise price payable by such securitiesholder upon exercise of Company Stock Options to the extent required under the terms of such Company Stock Options as in effect on the date hereof; or (B) from former employees, directors and consultants in accordance with agreements as in effect on the date hereof providing for the repurchase of shares in connection with any termination of services to the Company or any of its Subsidiaries;
(b) issue, deliver, sell, grant, pledge or otherwise dispose of or encumber any shares of its capital stock, any other voting securities or any securities convertible into or exchangeable for, or any rights, warrants or options to acquire, any such shares, voting securities or convertible or exchangeable securities, “phantom” stock, “phantom” stock rights, stock appreciation rights or stock-based performance units or securities the value of which is measured by such securities (other than (i) the issuance of shares of Company Common Stock upon the exercise of Company Stock Options or Company Warrants or the vesting of RSUs outstanding on the date of this Agreement in accordance with their present termsterms or granted pursuant to clause (ii) of this Section 5.1(b), issue or accept contributions for the and (ii) grants of Company Stock Options to purchase of shares of Company Common Stock pursuant to the ESPPCompany Stock Plan, or amend in an aggregate amount not in excess of $200,000 in value calculated using the terms same methodology as currently employed by the Company for purposes of any its financial statements, which grants shall be in an amount per person consistent with the Company’s past practices for the applicable position, at an exercise price equal to the fair market value of the foregoing, except as expressly contemplated by Section 3.3 Company Common Stock on the date of this Agreementgrant and otherwise on terms used in the Ordinary Course of Business;
(c) amend its Certificate certificate of Incorporationincorporation, Byby-laws or other comparable charter or organizational documents, except as expressly provided by this Agreement;
(d) acquire (Ai) by merging or consolidating with, or by purchasing all or a substantial portion of the assets or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other Person business organization or division thereof or (Bii) any assets that are material, in the aggregate, to the Company and its Subsidiaries, taken as a whole, except purchases of inventory and components in the Ordinary Course of Business;
(e) except in the Ordinary Course of Business, sell, lease, license, pledge, or otherwise dispose of or encumber any properties or assets of the Company or of any of its Subsidiaries;
(f) whether or not in the Ordinary Course of Business, sell, dispose of, or otherwise transfer any assets material to the Company and its Subsidiaries, taken as a whole (including any accounts, leases, Contracts or Intellectual Property or any assets or the stock of any Subsidiaries);
(g) adopt or implement any stockholder rights plan;
(h) enter into a Contract with respect to any merger, consolidation, liquidation, dissolution, restructuring, recapitalization or other reorganization or business combination, or any acquisition or disposition of all or any substantial portion of the assets or securities of the Company or any of its Subsidiaries;
(i) (i) incur or suffer to exist any indebtedness for borrowed money other than such indebtedness reflected on the Company Balance Sheet or guarantee any such indebtedness of another Person, (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans or advances (in each case other than for employee travel or other business purposes or for employee tuition reimbursement in each case in the Ordinary Course of Business) or capital contributions to, or investments in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries or (iv) enter into any hedging agreement or other financial agreement or arrangement the value of which may change with fluctuations in commodities or equities, prices or exchange rates or other derivative instruments;
(j) make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $100,000 in the aggregate for the Company and its Subsidiaries, taken as a whole;
(k) make any change in its accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve or revalue any assets, or make any change in its fiscal year;
(i) pay, discharge, settle, satisfy, fund or accept any claims, liabilities, disputes, audit or investigation finding or result or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than in accordance with their terms as in effect on the date of this Agreement, of claims, liabilities or obligations reflected or reserved against in, the most recent consolidated financial statements (or the notes thereto) of the Company included in the Company SEC Reports filed prior to the date of this Agreement (to the extent so reflected or reserved against), or (ii) waive any material benefits of, modify in any adverse respect, fail to enforce, or consent to any matter with respect to which its consent is required under, any confidentiality, standstill or similar Contracts to which the Company or any of its Subsidiaries is a party;
(m) terminate any material Contract to which the Company or any of its Subsidiaries is party, or waive, release or assign any material rights or claims (including any write-off or other compromise of any accounts receivable of the Company or any of its Subsidiaries), or except in the Ordinary Course of Business modify or amend any material Contract to which the Company or any of its Subsidiaries is party;
(i) except in the Ordinary Course of Business enter into, or modify the terms of, any Contract relating to the rendering of services or the distribution, sale or marketing by third parties of the products of, or products licensed by, the Company or any of its Subsidiaries or (ii) license, or modify the terms of any license of, any material intellectual property rights to or from any third party, other than non-exclusive licenses which may be canceled without penalty by the Company or its Subsidiaries upon written notice of thirty (30) days or less;
(o) except as expressly provided by Section 3.3, (i) take any action with respect to, adopt, enter into, terminate or amend any employment, severance or similar agreement, policy, practice or arrangement or benefit plan or compensation for the benefit or welfare of any current or former Company Person or any collective bargaining agreement (including with respect to the existing collective bargaining agreement of Integrated Information Technology Corporation (a Subsidiary of the Company), make any offer or take any bargaining position without Parent’s prior written consent, which consent shall not be unreasonably withheld), (ii) increase in any material respect the compensation or benefits of, or pay any bonus to, any Company Person, (iii) amend or accelerate the right to payment or vesting of any compensation or benefits, including any outstanding options or any restricted stock awards, (iv) pay any material benefit not provided for as of the date of this Agreement under any Company Employee Plan, (v) grant any awards under, or otherwise expand the benefits of or the persons entitled to participate in, any bonus, incentive, performance or other compensation plan or arrangement or benefit or compensation plan, policy, practice or arrangement (including the Company’s Executive Severance Plan, and offer additional persons the opportunity to participate in, or to participate in, the Company’s Executive Severance Plan), including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, (vi) terminate the employment or take other adverse actions with respect to any of the Company executives and other employees identified in Section 6.1(o) of the Company Disclosure Schedules (the “Key Employees”), (vii) employ or offer to employ or promote or offer to promote, terminate or give notice of intent to terminate, any Person at Pay Grade 8 or above (or its equivalent for Subsidiaries using a different pay scale) (based upon the Company’s or its Subsidiaries’ respective existing pay scales) or (viii) take any action (other than (x) in the Ordinary Course of Business with respect to payment of compensation or (y) pursuant to retention agreements entered into prior to December 31, 2004) to fund or in any other way secure the payment of compensation or benefits under any Employee Plan or Contract;
(p) (i) make or rescind any Tax election, (ii) settle or compromise any Tax liability, (iii) amend any Tax Return, (iv) make a request for a written ruling of a taxing authority relating to Taxes or file a request for a pre-filing agreement or similar procedure or (v) enter into a legally binding agreement with a taxing authority with respect to Taxes;
(q) close (except pursuant to the existing terms of leases disclosed in Section 4.12(b) of the Company Disclosure Schedule entered into prior to the date of this Agreement (and without giving effect to the transactions contemplated by this Agreement)) or open any material facility or office, or initiate, compromise or settle any material Proceeding;
(r) permit any transfer or exercise of rights with respect to shares of Company Common Stock in violation of the Stockholder Agreements;
(s) fail to maintain insurance at levels substantially comparable to levels existing as of the date of this Agreement or to timely file claims thereunder (provided that the Company shall not pay or incur liability for any materially increased premium without Parent’s consent, not to be unreasonably withheld);
(t) fail to pay accounts payable and other obligations in the Ordinary Course of Business;
(u) agree to any covenant of the Company or any of its Subsidiaries not to compete or other covenant of the Company or any of its Subsidiaries restricting the development, manufacture, marketing or distribution of the products or services of the Company or any of its Subsidiaries or otherwise limiting the freedom of the Company or any of its Subsidiaries to compete in any line of business (other than conflict of interest requirements that are included in any outstanding Bid as of the date hereof, as disclosed in Section 6.1(u) of the Company Disclosure Schedule, that may become effective without the right of negotiation or refusal by Company or its Subsidiaries, by virtue of such Bid being accepted) or with any Person or in any area or to own, operate, sell, transfer, pledge or otherwise dispose of or encumber any material assets or that would so limit the freedom of Parent or any of its affiliates after the consummation of the Offer or the Merger;
(v) with respect to Building, permit Building to take any of the actions listed in paragraphs (a) through (u) of this Section 6.1, to the extent reasonably within the Company’s control, and without limiting the scope of the foregoing, authorize or agree to any such action in the Company’s capacity as a member of Building; or
(w) authorize any of, or commit or agree, in writing or otherwise, to take any of, the foregoing actions or any action which would cause any representation or warranty of the Company set forth in this Agreement to be inaccurate under the applicable standard included in paragraph (vi)(E) of Annex I, or would materially impair or prevent the satisfaction of any condition in Annex I or Article VIII.
Appears in 1 contract
Samples: Merger Agreement (Perkinelmer Inc)
