Conduct Prior to the Effective Time. 5.1 Conduct of Business by Company, Indirect Parent, Second Intermediary -------------------------------------------------------------------- Parent, First Intermediary Parent and Parent. During the period from the date -------------------------------------------- of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, Indirect Parent, Second Intermediary Parent, First Intermediary Parent and Parent shall cause the Company to and the Company shall, except to the extent that Purchaser shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), carry on its business, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulations, pay its debts and taxes when due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has significant business dealings. In addition, except as permitted by the terms of this Agreement, and the transactions contemplated hereby, without the prior written consent of Purchaser, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, neither Indirect Parent, Second Intermediary Parent, First Intermediary Parent nor Parent shall permit the Company to, and Company shall not do any of the following: (a) With respect to Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parent, waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans to any employee, consultant or director of the Company, except as provided for under this Agreement or the attached exhibits; (b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing or made available to Purchaser, or adopt any new severance plan, or amend or modify or alter in any manner any severance plan, agreement or arrangement existing on the date hereof or hire any new employees or consultants; (c) Transfer or license to any person or entity or otherwise extend, amend or modify any rights to the Company Intellectual Property, or enter into grants to transfer or license to any person future patent rights; (d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock; (e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company; (f) Issue, deliver, sell, authorize, pledge or otherwise encumber or propose any of the foregoing with respect to any shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares; (g) Cause, permit or propose any amendments to the Company Charter Documents; (h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to enter into any joint ventures, strategic partnerships or alliances; (i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory in the ordinary course of business consistent with past practice; (j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than in connection with the financing of ordinary course trade payables by Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parent; (k) Adopt or amend any material employee policy or arrangement, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director or employee, or, except in the ordinary course of business consistent with past practice, increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultants; (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), or litigation (whether or not commenced prior to the date of this Agreement) other than the payment, discharge, settlement or satisfaction, in the ordinary course of business consistent with past practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company as provided to the Purchasers or incurred since the date of such financial statements, or (ii) waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any confidentiality or similar agreement to which Company is a party or of which Company is a beneficiary; (m) Make any individual or series of related payments outside of the ordinary course of business in excess of $10,000; (n) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any Material Contract or agreement to which Company is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder; (o) Enter into, renew or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company other than renewals of existing nonexclusive contracts, agreements or obligations; (p) Except as required by GAAP, revalue any of its assets or make any change in accounting methods, principles or practices; (q) Incur or enter into any agreement, contract or commitment requiring Company to pay in excess of $10,000, excluding routine purchase orders consistent with past practices; (r) Settle any material litigation; (s) Make or change any election in respect of Taxes, adopt or change any accounting method in respect of Taxes, file any Tax Returns or any amendment to any Tax Return other than in a manner consistent with prior practices, enter into any closing agreement, settle any claim or assessment in respects of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; (t) Agree in writing or otherwise to take any of the actions described in Section 5.1(a) through (s) above.
Appears in 3 contracts
Samples: Agreement and Plan of Reorganization (Xenogen Corp), Agreement and Plan of Reorganization (Xenogen Corp), Agreement and Plan of Reorganization (Xenogen Corp)
Conduct Prior to the Effective Time. 5.1 4.1 Conduct of Business by of the Company, Indirect Parent, Second Intermediary -------------------------------------------------------------------- Parent, First Intermediary Parent and Parent. During the period from the date -------------------------------------------- of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, Indirect Parent, Second Intermediary Parent, First Intermediary Parent and Parent shall cause the Company to and the Company shall, except to the extent that Purchaser shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), carry on its business, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulations, pay its debts and taxes when due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has significant business dealings. In addition, except as permitted by the terms of this Agreement, and the transactions contemplated hereby, without the prior written consent of Purchaser, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or and the Effective Time, neither Indirect Parentthe Company (which for the purposes of this Section 4.1 shall include the Company and each of its subsidiaries) agrees, Second Intermediary Parent, First Intermediary Parent nor except to the extent that Parent shall permit otherwise consent in writing, to carry on its business in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, to pay its debts and Taxes when due subject to good faith disputes over such debts or Taxes, to pay or perform other material obligations when due, and to use all reasonable efforts consistent with past practices and policies to preserve intact the Company's present business organizations, keep available the services of its present officers and employees and preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others having business dealings with the Company, to the end that the Company's goodwill and ongoing businesses shall not be impaired in any material respect at the Effective Time. "Ordinary course" is deemed to intrinsically include full compliance with the short-term cost reduction plan delivered by the Company toto Parent on or before the date of this Agreement. The Company shall promptly notify Parent of any event or occurrence not in the ordinary course of business of the Company, and will not enter into or amend any agreement or take any action which reasonably would be expected to have a Material Adverse Effect on the Company. Except as expressly contemplated by this Agreement or in compliance with Section 5.4(a), the Company shall not do any prior to the Effective Time or earlier termination of this Agreement pursuant to its terms, without the followingprior written consent of Parent's Chief Executive Officer:
(a) With respect to Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parent, waive Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or repurchase of restricted stock, or reprice options granted under any employee, consultant, director or other the employee stock plans of the Company or authorize cash payments in exchange for any options granted under any of such plans plans, or by inaction suffer any of the foregoing to occur when unilateral action by the Company (other than action involving termination of such options) could have prevented it, all unless otherwise expressly required pursuant to the terms of the Company Stock Option Plan, or take any such action (or by inaction suffer such to occur when unilateral action by the Company could have prevented it) with regard to any employee, consultant warrant or director other right to acquire capital stock of the Company, except as provided for under this Agreement or the attached exhibits;
(b) Enter into partnership arrangements, joint development agreements or strategic alliances;
(c) Grant any severance or termination pay (i) to any executive officer or (ii) to any other employee except payments made in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices or pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent or made available pursuant to Purchaser, or adopt any new severance plan, or amend or modify or alter in any manner any severance plan, agreement or arrangement existing on written agreements consistent with the date hereof or hire any new employees or consultantsCompany's past agreements under similar circumstances;
(cd) Transfer or license to any person or entity or otherwise extend, amend or modify any rights to the Company Company's Intellectual Property, Property Rights or enter into grants to transfer or license to any person of future patent rights;
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber or propose any of the foregoing with respect to any shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares;
(g) Cause, permit or propose any amendments to the Company Charter Documents;
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to enter into any joint ventures, strategic partnerships or alliances;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory in the ordinary course of business consistent with past practice;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than non-exclusive licenses in connection with the financing sale of ordinary course trade payables by Indirect Parent, Second Intermediary Parent, First Intermediary Parent goods or Parent;
(k) Adopt or amend any material employee policy or arrangement, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements services entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay practices; (e) Commence any special bonus or special remuneration to any director or employee, or, except in the ordinary course of business consistent with past practice, increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultants;
litigation other than (i) payfor the routine collection of bills, discharge, settle or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise)ii) for software piracy, or litigation (whether or not commenced iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the Company's business, provided that the Company consults with Parent prior to the date of this Agreement) other than the payment, discharge, settlement or satisfaction, in the ordinary course of business consistent with past practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company as provided to the Purchasers or incurred since the date filing of such financial statements, or (ii) waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any confidentiality or similar agreement to which Company is a party or of which Company is a beneficiarysuit;
(m) Make any individual or series of related payments outside of the ordinary course of business in excess of $10,000;
(n) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any Material Contract or agreement to which Company is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into, renew or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company other than renewals of existing nonexclusive contracts, agreements or obligations;
(p) Except as required by GAAP, revalue any of its assets or make any change in accounting methods, principles or practices;
(q) Incur or enter into any agreement, contract or commitment requiring Company to pay in excess of $10,000, excluding routine purchase orders consistent with past practices;
(r) Settle any material litigation;
(s) Make or change any election in respect of Taxes, adopt or change any accounting method in respect of Taxes, file any Tax Returns or any amendment to any Tax Return other than in a manner consistent with prior practices, enter into any closing agreement, settle any claim or assessment in respects of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes;
(t) Agree in writing or otherwise to take any of the actions described in Section 5.1(a) through (s) above.
Appears in 2 contracts
Samples: Merger Agreement (P Com Inc), Merger Agreement (Telaxis Communications Corp)
Conduct Prior to the Effective Time. 5.1 Conduct of Business by the Company, Indirect Parent, Second Intermediary -------------------------------------------------------------------- Parent, First Intermediary Parent and Parent. .
(a) During the period from the date -------------------------------------------- of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, Indirect Parent, Second Intermediary Parent, First Intermediary Parent and Parent shall cause the Company to and the Company each of its subsidiaries shall, except to the extent that Purchaser Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed)writing, carry on its business, business in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes Taxes when due subject to good faith disputes over such debts or taxesdebts, pay or perform other material obligations when due, and use its commercially all reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers officers, employees and employees contractors and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has significant business dealings. In addition, except as permitted by .
(b) Without limiting the terms generality of this Agreement, and the transactions contemplated herebyforegoing, without the prior written consent of PurchaserParent, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, neither Indirect Parent, Second Intermediary Parent, First Intermediary Parent nor Parent shall permit the Company to, and Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(ai) With respect to Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parent, waive any stock repurchase rights, accelerateaccelerate (other than pursuant to the terms of Company Options in effect as of the date hereof), amend or change the period of vesting or exercisability of options Company Options or restricted stock, or reprice options Company Options granted under the Option Plans or any employeeother plan, consultant, director program or other stock plans arrangement or authorize cash payments in exchange for any options Company Options granted under any of such plans or exercise any authority under the Option Plans or any Company Employee Plan to accelerate any employee, consultant vesting or director exercise of the Company, except as provided for under this Agreement or the attached exhibitsany Company Option;
(bii) Grant adopt a plan of complete or partial liquidation, dissolution, merger, acquisition, consolidation, restructuring, recapitalization or other reorganization (other than the Merger);
(iii) grant any severance severance, bonus or termination pay to any employee, officer or employee director except non-discretionary pay pursuant to written agreements outstandingin effect, or policies existing, on the date hereof and as previously disclosed in writing or made available to PurchaserParent, or adopt any new severance severance, retention or change in control plan, policy or amend or modify or alter in any manner any severance plan, agreement or arrangement existing on the date hereof or hire any new employees or consultantsarrangement;
(civ) Transfer transfer or license to any person or entity or otherwise extend, amend amend, modify, permit to lapse or modify fail to preserve any rights to of the Company Intellectual PropertyProperty Rights material to the Company's business as presently conducted or proposed to be conducted, other than nonexclusive licenses in the ordinary course of business consistent with past practice, or enter into grants to transfer or license disclose to any person future patent rightswho has not entered into a confidentiality agreement any Trade Secrets;
(dv) Declareother than required dividends on the Series B Preferred Stock, declare, set aside aside, or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock;
(evi) Purchasepurchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Companythe Company or its subsidiaries, or any instrument or security that consists of a right to acquire such shares except repurchases of unvested shares at cost in connection with the termination of the employment relationship with any employee pursuant to stock option or purchase agreements in effect on the date hereof;
(fvii) Issueexcept for grants of Company Options pursuant to written commitments in effect on the date hereof and to new hires in the ordinary course of business and consistent with past practice (not to exceed 100,000 shares of Common Stock in the aggregate to employees that are not officers or directors), deliver, issue or sell, authorizeor authorize the issuance or sale of, pledge or otherwise encumber or propose any of the foregoing with respect to any shares of its capital stockstock or any other equity securities, or issue or sell, or authorize the issuance or sale of, any securities convertible into or options, warrants or rights to purchase or subscribe to, or enter into or create any contract with respect to the issuance or sale of, any shares of its capital stock or any other agreements equity securities, or commitments make any other changes in its capital structure, except for the issuance and sale of any character obligating it shares of Common Stock upon the exercise of Company Options or Company Warrants which are outstanding on the date hereof and other than pursuant to issue any such sharesthe Company ESPP consistent with the terms thereof;
(gviii) Causecause, permit or propose any amendments to the Company Charter Documentsits Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(hix) Acquire acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, ; or otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any joint ventures, strategic partnerships or alliances;
(ix) Sellsell, transfer, lease, license, mortgage, pledge, encumber or otherwise dispose of any properties or assets except sales of inventory which are material, individually or in the ordinary course aggregate, to the business of business consistent with past practicethe Company;
(jxi) Incur incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company, enter into any "keep well" or other agreement to maintain any financial statement condition condition, incur or modify any other material liability or enter into any arrangement having the economic effect of any of the foregoing other than (x) in connection with the financing of ordinary course trade payables by Indirect Parent, Second Intermediary Parent, First Intermediary Parent consistent with past practice or Parent;
(ky) Adopt or amend any material employee policy or arrangement, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into pursuant to existing credit facilities as in effect on the date hereof in the ordinary course of business consistent with past practice with employees who are terminable "at will")business;
(xii) adopt or amend any Company Employee Plan, pay pay, or incur an obligation or commitment to pay, any special bonus or special remuneration to any director director, officer, consultant or employee, or, except in the ordinary course of business consistent with past practice, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultantsconsultants other than increases to employees who are not directors or affiliates in the ordinary course of business, consistent with past practice or make any loans to any of its officers, directors, employees, affiliates, agents or consultants or make any change in its existing borrowing or lending arrangements for or on behalf of any of such persons pursuant to a Company Employee Plan or otherwise;
(ixiii) paypay or agree to pay or make any accrual or arrangement for payment to any officers, dischargedirectors, settle employees or satisfy affiliates of the Company or any claimsof its subsidiaries of any amount relating to unused vacation days, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), or litigation (whether or not commenced prior to the date of this Agreement) other than the payment, discharge, settlement or satisfaction, except payments and accruals made in the ordinary course of business consistent with past practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company as provided to the Purchasers or incurred since the date of such financial statements, or (ii) waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any confidentiality or similar agreement to which Company is a party or of which Company is a beneficiarypractice;
(mxiv) Make modify, amend or terminate any individual Company Agreement, or series waive, release or assign any material rights or claims thereunder, other than any such modification, amendment or termination of related payments outside of any such material contract or any such waiver, release or arrangement thereunder in the ordinary course of business in excess of $10,000consistent with past practice;
(nxv) Except modify, amend or terminate, or waive, release or assign any material rights or claims with respect to any confidentiality agreement or non-competition agreement to which the Company is a party.
(xvi) pay, discharge, satisfy or settle any pending or threatened adverse third party claims, suits, actions, liabilities or other obligations (whether absolute, accrued, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations, in the ordinary course of business consistent with past practice, modifyor of claims, amend liabilities or terminate any Material Contract obligations reflected or agreement to which Company is a party reserved against in, or waivecontemplated by, delay the exercise of, release consolidated financial statements (or assign any material rights or claims thereunderthe notes thereto) of the Company;
(oxvii) Enter intocommence, renew join or materially modify make an appeal with respect to any contractsaction, agreementsclaim, suit, arbitration, litigation or obligations relating other proceeding for money damage or other relief against any third party (other than Parent or Purchaser) before any court or governmental or other regulatory or administrative agency or commission in any jurisdiction, other than ordinary course collections claims for accounts receivable due and payable to the distribution, sale, license Company or marketing by third parties any of Company's products its subsidiaries not exceeding $50,000 in the aggregate or products licensed by Company other than renewals of existing nonexclusive contracts, agreements which would result in any restrictions on its operations or obligationswhich relates to this Agreement or the Transactions;
(pxviii) Except enter into any contract which involves payments or commitments or results in potential liability in excess of $100,000 in any consecutive twelve (12) month period, or, in cases where the Company or a subsidiary of the Company is the party responsible for such payment, commitment or liability which is not terminable upon thirty (30) days notice other than in the ordinary course of business consistent with past practice;
(xix) permit any insurance policy naming it as required a beneficiary or a loss payee to be cancelled or terminated without notice to and consent by GAAP, Parent;
(xx) revalue any of its assets or make any change in accounting methods, principles or practices, except as required by GAAP after notice to Parent;
(qxxi) Incur delay or enter into any agreement, contract postpone the payment of accounts payable or commitment requiring Company to pay other liabilities other than in excess the ordinary course of $10,000, excluding routine purchase orders consistent with past practicesbusiness;
(rxxii) Settle any material litigation;
(s) Make make or change any election in respect of relating to Taxes, adopt or change any accounting method in respect of relating to Taxes, file any Tax Returns or any amendment to any Tax Return other than in a manner consistent with prior practices, enter into any closing agreementagreement relating to Taxes, file any amended Tax Return, settle any claim or assessment in respects of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment relating to Taxes, incur any obligation to make any payment of, or in respect of, any Taxes, except in the ordinary course of business, or agree to extend or waive the statutory period of limitations for the assessment or collection of Taxes;
(txxiii) Agree fail to make in a timely manner any filings with the SEC required under the Securities or the Exchange Act or the rules and regulations promulgated thereunder;
(xxiv) except as required by applicable law or GAAP, make any change in its accounting principles, practices or methods after notice to Parent;
(xxv) take any action that would or is reasonably likely to result in any of the conditions to the Merger set forth in Article VII or any of the conditions to the Offer set forth in Annex I not being satisfied, or would make any representation or warranty of the Company contained herein inaccurate in any material respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation;
(xxvi) enter into any agreement or commitment the effect of which would be to grant to a third party following the Merger any actual or potential right or license of any material Intellectual Property Rights owned by Parent or any of its subsidiaries, in each case, other than the Surviving Corporation or any successor thereto;
(xxvii) take any action to exempt or make any person (other than Parent or Purchaser) not subject to the provisions of Section 203 of the DGCL or any other potentially applicable anti-takeover or similar statute or regulation;
(xxviii) redeem the Rights or amend, waive any rights under or otherwise modify or terminate the Rights Agreement in connection with an Acquisition Proposal by any person other than Parent or Purchaser or render the Rights Agreement inapplicable to any Acquisition Proposal by any person other than Parent or Purchaser unless, and only to the extent that, the Company is required to do so by a court of competent jurisdiction; or
(xxix) enter into any written agreement, contract, commitment or arrangement to do any of the foregoing, or authorize, recommend, propose, in writing or otherwise or announce an intention to take do any of the actions described in Section 5.1(a) through (s) aboveforegoing.
Appears in 2 contracts
Samples: Merger Agreement (Emulex Corp /De/), Merger Agreement (Vixel Corp)
Conduct Prior to the Effective Time. SECTION 5.1 Conduct of Business by the Company, Indirect Parent, Second Intermediary -------------------------------------------------------------------- Parent, First Intermediary Parent and Parent. During the period from the date -------------------------------------------- of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, Indirect Parent, Second Intermediary Parent, First Intermediary Parent and Parent shall cause the Company to and the Company each of its subsidiaries shall, except to the extent that Purchaser Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed)writing, carry on its business, business in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted course consistent with past practice and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes Taxes when due due, subject to good faith disputes over such debts or taxesTaxes, pay or perform other material obligations when due, and use its commercially reasonable best efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, licensees and others with which it has significant business dealingsdealings so that no Material Adverse Effect shall have occurred at or prior to the Effective Time. In addition, during that period the Company will promptly notify Parent of any material event involving its business or operations consistent with the agreements contained herein. In addition, except as permitted by the terms of this Agreement, the Transaction Option Agreement or the Stockholders' Agreement, and except as contemplated by this Agreement, the transactions contemplated herebyTransaction Option Agreement or the Stockholders' Agreement, without the prior written consent of Purchaser, Parent during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, neither Indirect Parent, Second Intermediary Parent, First Intermediary Parent nor Parent shall permit the Company to, and Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) With respect to Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parent, waive Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except to any employee, consultant the extent otherwise required by such plans or director of the Company, except as provided for under this Agreement or the attached exhibitsoption documents in their current form;
(b) Grant any severance or termination pay or benefits to any officer directors, officers or employee except pursuant to written agreements outstandingin effect, or policies existing, on the date hereof and (or as previously disclosed in writing or required by applicable law), copies of which have been made available to PurchaserParent, or adopt any new severance plan, practice or amend or modify or alter in any manner any severance plan, agreement or arrangement existing on the date hereof or hire any new employees or consultantspolicy;
(c) Transfer Enter into or amend any existing material licensing or other agreement with regard to the acquisition, distribution or licensing of any Company Intellectual Property Rights, or transfer or license to any person or entity or otherwise extend, amend or modify any rights to the Company Intellectual PropertyProperty Rights, other than non-exclusive licenses, distribution or enter into grants to transfer or license to any person future patent rightsother similar agreements entered in the ordinary course of business consistent with past practice;
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock of the Company other than dividends or distributions by a direct or indirect wholly-owned subsidiary to its parent, or split, combine or reclassify any capital stock of the Company or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stockstock of the Company;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Companythe Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the employment relationship with any employee pursuant to stock option or purchase agreements in effect on the date hereof;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of capital stock or propose any securities convertible into shares of the foregoing with respect capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such sharesshares or convertible securities, other than the issuance, delivery and/or sale of shares of Company Common Stock pursuant to the exercise of Company Options, except for the issuance of shares of Company Common Stock upon the Roche Conversion;
(g) Cause, permit or propose any amendments to the Company Charter DocumentsDocuments other than to implement the transaction with Parent and Merger Sub contemplated by this Agreement;
(h) Acquire or agree to acquire by merging or consolidating with, or or, by purchasing any equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, ; or otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company (except for purchases of raw materials, equipment, supplies or investment securities in the ordinary course of business consistent with past practice) or enter into any material joint ventures, strategic partnerships relationships or alliances;
(i) SellExcept as permitted under Sections 5.1(c) and (h), sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory which are material, individually or in the ordinary course aggregate, to the business of business consistent with past practicethe Company;
(j) Incur Except as set forth on Section 5.1(j) of the Company Disclosure Schedule, incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing foregoing, other than in connection with the financing of ordinary course trade payables by Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parent;
(k) Adopt or amend any material employee policy or arrangement, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director or employee, or, except in the ordinary course of business consistent with past practice;
(k) Except as required to comply with any Legal Requirement, adopt or amend any employee benefit plan or employee stock purchase or employee stock option plan, or enter into any employment, deferred compensation, consulting or other similar agreement (or any amendment to any such existing agreement) or collective bargaining agreement, pay any bonus or other remuneration to any Employee, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultants;
(i) pay, discharge, settle or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), or litigation (whether or not commenced prior to the date of this Agreement) Employee other than the payment, discharge, settlement or satisfaction, in the ordinary course of business consistent with past practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements respect to employees and consultants (or the notes theretoother than officers) of Company as provided to the Purchasers or incurred since the date of such financial statements, or (ii) waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any confidentiality or similar agreement to which Company is a party or of which Company is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business in excess of $10,000;
(n) Except in the ordinary course of business consistent with past practice, modifyor change any management policies, amend practices or terminate any Material Contract or agreement to which Company is a party or waive, delay the exercise of, release or assign any material rights or claims thereunderprocedures;
(o1) Enter into, renew or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company other than renewals of existing nonexclusive contracts, agreements or obligations;
(p) Except as required by GAAP, revalue any of its assets or make any change in accounting methods, principles or practices;
(q) Incur or enter into any agreement, contract or commitment requiring Company to pay in excess of $10,000, excluding routine purchase orders consistent with past practices;
(r) Settle Make any material litigationcapital expenditures, except an expenditure of up to $250,000 per capital project;
(s) Make or change any election in respect of Taxes, adopt or change any accounting method in respect of Taxes, file any Tax Returns or any amendment to any Tax Return other than in a manner consistent with prior practices, enter into any closing agreement, settle any claim or assessment in respects of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes;
(t) Agree in writing or otherwise to take any of the actions described in Section 5.1(a) through (s) above.
Appears in 2 contracts
Samples: Agreement and Plan of Merger (Digene Corp), Agreement and Plan of Merger (Digene Corp)
Conduct Prior to the Effective Time. 5.1 4.1 Conduct of Business by of the Company, Indirect Parent, Second Intermediary -------------------------------------------------------------------- Parent, First Intermediary Parent and Parent. During the period from the date -------------------------------------------- of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, Indirect Parent, Second Intermediary Parent, First Intermediary Parent and Parent shall cause the Company to and the Company shall, except to the extent that Purchaser shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), carry on its business, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulations, pay its debts and taxes when due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has significant business dealings. In addition, except as permitted by the terms of this Agreement, and the transactions contemplated hereby, without the prior written consent of Purchaser, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, neither Indirect Parent, Second Intermediary Parent, First Intermediary Parent nor the Company agrees (except to the extent that Parent shall permit otherwise consent in writing and except with respect to the termination of employees and the combination of the Company's operations with that of the Parent and other substantial cost reduction measures all as discussed with or approved by Parent) to carry on its business in the usual, regular and ordinary course in substantially the same manner as heretofore conducted, to pay its debts and Taxes when due, to pay or perform other obligations when due, and, to the extent consistent with such business, to use all reasonable efforts consistent with past practice and policies to preserve intact its present business organization, keep available the services of its present officers and key employees and preserve their relationships with customers, suppliers, distributors, licensors, licensees, and others having business dealings with it, all with the goal of preserving unimpaired its goodwill and ongoing businesses at the Effective Time. The Company shall promptly notify Parent of any event not previously discussed with or approved by Parent which materially adversely effects the Company toor its business. Except as expressly contemplated by this Agreement or disclosed in Schedule 4.1 or necessary to effect the Bridge Financing described in Section 5.14, and the Company shall not do any not, without the prior written consent of the followingParent:
(a) With respect to Indirect Parent, Second Intermediary Parent, First Intermediary Parent Enter into any commitment or Parent, waive any stock repurchase rights, accelerate, amend or change transaction not in the period ordinary course of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans to any employee, consultant or director of the Company, except as provided for under this Agreement or the attached exhibits;business.
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing or made available to Purchaser, or adopt any new severance plan, or amend or modify or alter in any manner any severance plan, agreement or arrangement existing on the date hereof or hire any new employees or consultants;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify any rights to the Company Intellectual PropertyProperty Rights, except licenses in the ordinary course of business;
(c) Enter into or enter into grants amend any agreements pursuant to transfer which any other party is granted marketing, distribution or license similar rights of any type or scope with respect to any person future patent rightsproducts of the Company;
(d) Amend or otherwise modify (or agree to do so), except in the ordinary course of business, or violate the terms of, any of the agreements set forth or described in the Company Schedules;
(e) Commence any litigation;
(f) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities stock or property) in respect of any of its capital stock stock, or 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 any shares of capital stock;
(e) Purchasestock of the Company, or repurchase, redeem or otherwise acquire, directly or indirectly, any shares of its capital stock (or options, warrants or other rights exercisable therefor), except upon termination of Companyemployment at cost;
(fg) IssueExcept for the issuance of shares of Company Capital Stock (i) upon exercise or conversion of presently outstanding Company Options or Company Preferred Stock or warrants, deliver, sell, authorize, pledge or otherwise encumber or propose any of the foregoing (ii) to Kingdon Capital with respect to the Bridge Financing pursuant to Section 5.16 below, issue, grant, deliver or sell or authorize or propose the issuance, grant, delivery or sale of, or purchase or propose the purchase of, any shares of capital stockCompany Capital Stock or securities convertible into, or enter into subscriptions, rights, warrants or options to acquire, or other agreements or commitments of any character obligating it to issue any such shares;
(g) Causeshares or other convertible securities, permit or propose any amendments to without the Company Charter Documentsprior written consent of Parent;
(h) Cause or permit any amendments to its Certificate of Incorporation or Bylaws, except as necessary to effect the sale of Series C Preferred Stock to Kingdon Capital or to revise existing liquidation preferences or as otherwise contemplated hereby;
(i) Acquire or agree to acquire by merging or consolidating with, or by purchasing any assets or equity interest in or a portion of the assets securities of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to enter into acquire any joint ventures, strategic partnerships assets in an amount in excess of $5,000 in the case of a single transaction or alliancesin excess of $15,000 in the aggregate in any 30-day period;
(ij) Sell, lease, license, encumber license or otherwise dispose of any of its properties or assets assets, except sales of inventory in the ordinary course of business consistent with past practicebusiness;
(jk) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, or issue or sell any debt securities of the Company or options, warrants, calls or other rights to acquire guarantee any debt securities of Company, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than others except in connection with the financing of ordinary course trade payables by Indirect Parent, Second Intermediary Parent, First Intermediary Parent or ParentBridge Financing pursuant to Section 5.16;
(kl) Adopt Grant any severance or termination pay (i) to any director or officer or (ii) to any other employee except payments made pursuant to written agreements outstanding on the date hereof, or as set forth in the Company Schedules;
(m) Except as set forth in the Company Schedules, adopt or amend any material employee policy or arrangementbenefit plan, or enter into any employment contract contract, extend employment offers, pay or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), agree to pay any special bonus or special remuneration to any director or employee, or, except in the ordinary course of business consistent with past practice, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directorsemployees, officers, employees or consultantswithout the prior written consent of Parent;
(in) payRevalue any of its assets, dischargeincluding without limitation writing down the value of inventory or writing off notes or accounts receivable other than in the ordinary course of business;
(o) Pay, settle discharge or satisfy satisfy, in an amount in excess of $5,000 (in any claimsone case) or $15,000 (in the aggregate), liabilities any claim, liability or obligations obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), or litigation (whether or not commenced prior to the date of this Agreement) other than the payment, discharge, settlement discharge or satisfaction, satisfaction in the ordinary course of business consistent with past practice of liabilities reflected or in accordance with their terms, or liabilities recognized or disclosed reserved against in the most recent consolidated financial statements Company Financial Statements (or the notes thereto) of or identified in the Company as provided to the Purchasers Schedules or incurred since the date of such financial statements, or (ii) waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any confidentiality or similar agreement to which Company is a party or of which Company is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business in excess of $10,000;
(n) Except that arose in the ordinary course of business subsequent to May 4, 1997 or expenses consistent with past practice, modify, amend or terminate the provisions of this Agreement incurred in connection with any Material Contract or agreement to which Company is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into, renew or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company other than renewals of existing nonexclusive contracts, agreements or obligationstransaction contemplated hereby;
(p) Except as required by GAAP, revalue any of its assets or make any change in accounting methods, principles or practices;
(q) Incur or enter into any agreement, contract or commitment requiring Company to pay in excess of $10,000, excluding routine purchase orders consistent with past practices;
(r) Settle any material litigation;
(s) Make or change any material election in respect of Taxes, adopt or change any accounting method in respect of Taxes, file any Tax Returns or any amendment to any Tax Return other than in a manner consistent with prior practices, enter into any closing agreement, settle any claim or assessment in respects respect of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes;; or
(tq) Agree Enter into any strategic alliance, joint development or joint marketing agreement; or
(r) Take, or agree in writing or otherwise to take take, any of the actions described in Section 5.1(aSections 4.1(a) through (sq) above, or any other action that would prevent the Company from performing or cause the Company not to perform its covenants hereunder.
Appears in 1 contract
Samples: Agreement and Plan of Reorganization (Sanctuary Woods Multimedia Corp)
Conduct Prior to the Effective Time. 5.1 Conduct of Business by the Company, Indirect Parent, Second Intermediary -------------------------------------------------------------------- Parent, First Intermediary Parent and Parent. During the period from the date -------------------------------------------- of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, Indirect Parent, Second Intermediary Parent, First Intermediary Parent and Parent shall cause the Company to and the Company each of its subsidiaries shall, except to the extent that Purchaser Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed)writing, carry on its business, business in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes Taxes when due subject to good faith disputes over such debts or taxesdebts, pay or perform other material obligations when due, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers officers, employees and employees contractors and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has significant business dealings. In addition, except as permitted by Without limiting the terms generality of this Agreement, and the transactions contemplated herebyforegoing, without the prior written consent of PurchaserParent, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, neither Indirect Parent, Second Intermediary Parent, First Intermediary Parent nor Parent shall permit the Company to, and Company shall not do any of the following:following and shall not permit its subsidiaries to do any of the following (except as may be expressly contemplated or specifically permitted by this Agreement):
(a) With respect to Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parent, waive Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans to any employee, consultant or director of the Company, except as provided for under this Agreement or the attached exhibitsplans;
(b) Adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization (other than the Merger);
(c) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstandingin effect, or policies existing, on the date hereof and as previously disclosed in writing or made available to PurchaserParent, or adopt any new severance severance, retention or change in control plan, or amend or modify or alter in any manner any severance plan, agreement or arrangement existing on the date hereof or hire any new employees or consultants;
(cd) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to transfer or license to any person future patent rightsother than nonexclusive licenses in the ordinary course of business consistent with past practice;
(de) Declare, set aside aside, or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock;
(ef) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Companythe Company or its subsidiaries, or any instrument or security that consists of a right to acquire such shares except repurchases of unvested shares at cost in connection with the termination of the employment relationship with any employee pursuant to stock option or purchase agreements in effect on the date hereof;
(fg) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of capital stock or propose any securities convertible into shares of the foregoing with respect capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such sharesshares or convertible securities, other than the issuance, delivery and/or sale of shares of the Company Common Stock pursuant to the exercise of stock options or warrants therefor outstanding as of the date hereof;
(gh) Split, combine or reclassify any class of capital stock;
(i) Cause, permit or propose any amendments to the Company Charter Documentsits Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(hj) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, ; or otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company; or enter into any joint ventures, strategic 39 partnerships or alliances;
(i) Sell, leaseother than content alliance, license, encumber or otherwise dispose of any properties or assets except sales of inventory reseller and distribution agreements in the ordinary course of business consistent with past practice;
(jk) Sell, transfer, lease, license (outside of the ordinary course of business consistent with past practice), mortgage, pledge, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company;
(l) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company, enter into any "keep well" or other agreement to maintain any financial statement condition condition, incur or modify any other material liability or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables by Indirect Parent, Second Intermediary Parent, First Intermediary Parent consistent with past practice or Parent(ii) pursuant to existing credit facilities as in effect on the date hereof in the ordinary course of business;
(km) Adopt or amend any material employee policy benefit plan or arrangementemployee stock purchase or employee stock option plan, or enter into any employment contract contract, consulting agreement or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director director, officer, consultant or employee, or, except in the ordinary course of business consistent with past practice, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultantsconsultants other than increases to employees who are not directors or affiliates in the ordinary course of business, consistent with past practice or make any loans to any of its officers, directors, employees, affiliates, agents or consultants or make any change in its existing borrowing or lending arrangements for or on behalf of any of such persons pursuant to an employee benefit plan or otherwise;
(in) Pay or make any accrual or arrangement for payment of any pension, retirement allowance or other employee benefit pursuant to any existing plan, agreement or arrangement to any officer, director, employee or affiliate or pay or agree to pay or make any accrual or arrangement for payment to any officers, directors, employees or affiliates of the Company or any of its subsidiaries of any amount relating to unused vacation days, except payments and accruals made in the ordinary course of business consistent with past practice; adopt or pay, dischargegrant, settle issue, accelerate or accrue salary or other payments or benefits pursuant to any pension, profit-sharing, bonus, extra compensation, incentive, deferred compensation, stock purchase, stock option, stock appreciation right, group insurance, severance pay, retirement or other employee benefit plan, agreement or arrangement, or any employment or consulting agreement with or for the benefit of any Company or Company subsidiary director, officer, employee, agent or consultant, whether past or present, or amend in any material respect any such existing plan, agreement or arrangement in a manner inconsistent with the foregoing; 40
(o) Modify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party, including any joint venture agreement, or waive, release or assign any material rights or claims thereunder;
(p) Pay, discharge or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), or litigation (whether or not commenced prior to the date of this Agreement) other than the payment, dischargedischarge or satisfaction of any such claims, settlement liabilities or satisfactionobligations, in the ordinary course of business consistent with past practice or in accordance with their termspractice, or of claims, liabilities recognized or disclosed in obligations reflected or reserved against in, or contemplated by, the most recent consolidated financial statements (or the notes thereto) of Company as provided to the Purchasers or incurred since the date of such financial statements, or (ii) waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any confidentiality or similar agreement to which Company is a party or of which Company is a beneficiaryCompany;
(m) Make any individual or series of related payments outside of the ordinary course of business in excess of $10,000;
(nq) Except in the ordinary course of business consistent with past practice, modifyenter into any licensing, amend distribution, sponsorship, advertising, merchant program, encoding services, hosting or terminate any Material Contract or agreement to which Company is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into, renew or materially modify any other similar contracts, agreements, or obligations relating which may not be canceled without penalty by the Company or its subsidiaries upon notice of thirty (30) days or less or which provide for payments by or to the distribution, sale, license Company or marketing by third parties its subsidiaries in an amount in excess of Company's products $45,000 over the term of any single agreement or products licensed by Company other than renewals $100,000 in the aggregate over the term of existing nonexclusive contracts, all such agreements or obligationswhich involve any exclusive terms of any kind;
(pr) Except Permit any insurance policy naming it as a beneficiary or a loss payee to be cancelled or terminated without notice to Parent;
(s) Revalue any of its assets or, except as required by GAAP, revalue any of its assets or make any change in accounting methods, principles or practices;
(q) Incur or enter into any agreement, contract or commitment requiring Company to pay in excess of $10,000, excluding routine purchase orders consistent with past practices;
(r) Settle any material litigation;
(st) Make or change any election in respect of relating to Taxes, adopt or change any accounting method in respect of relating to Taxes, file any Tax Returns or any amendment to any Tax Return other than in a manner consistent with prior practices, enter into any closing agreementagreement relating to Taxes, file any amended Tax Return, settle any claim or assessment in respects of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment relating to Taxes, incur any obligation to make any payment of, or in respect of, any Taxes, except in the ordinary course of business, or agree to extend or waive the statutory period of limitations for the assessment or collection of Taxes;
(tu) Agree Fail to make in a timely manner any filings with the SEC required under the Securities Act of 1933, as amended, or the Exchange Act or the rules and regulations promulgated thereunder;
(v) Take any action that would or is reasonably likely to result in any of the conditions to the Merger set forth in Article VII or any of the conditions to the Offer set forth in Annex I not being satisfied, or would make any representation or warranty of the Company contained herein inaccurate in any material respect at, or as of any time prior to, the Effective 41 Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation; or
(w) Enter into any written agreement, contract, commitment or arrangement to do any of the foregoing, or authorize, recommend, propose, in writing or otherwise or announce an intention to take do any of the actions described in Section 5.1(a) through (s) aboveforegoing.
Appears in 1 contract
Samples: Merger Agreement (Signalsoft Corp)
Conduct Prior to the Effective Time. 5.1 4.1 Conduct of Business by of the Company, Indirect Parent, Second Intermediary -------------------------------------------------------------------- Parent, First Intermediary Parent and Parent. During the period from the date -------------------------------------------- of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, Indirect Parent, Second Intermediary Parent, First Intermediary Parent and Parent shall cause the Company to and the Company shall, except to the extent that Purchaser shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), carry on its business, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulations, pay its debts and taxes when due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has significant business dealings. In addition, except as permitted by the terms of this Agreement, and the transactions contemplated hereby, without the prior written consent of Purchaser, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, neither Indirect Parentthe Company agrees to use its reasonable best efforts to cause the Company, Second Intermediary Parent, First Intermediary Parent nor except to the extent that Parent shall permit otherwise consent in writing, to carry on the Company's business in the usual, regular and ordinary course in substantially the same manner as heretofore conducted, to pay the debts and Taxes of the Company towhen due, to pay or perform other obligations when due, to preserve intact the Company's present business organizations, and, to the extent consistent with such business, use its reasonable best efforts consistent with past practice and policies, to keep available the services of the Company's present officers and employees and preserve the Company's relationships with customers, suppliers, distributors, licensors, licensees, and others having business -50- dealings with it, all with the goal of preserving unimpaired the Company's goodwill and ongoing businesses from the date hereof to the Effective Time. The Company shall promptly notify Parent of any event or occurrence or emergency not do in the ordinary course of business of the Company and any material event involving the Company that occurs between the date hereof and the Effective Date. If at any time prior to the Effective Time any event relating to the Company, or any of its officers or directors should be discovered by the followingCompany which should be set forth in a supplement to the Disclosure Documents referenced in Section 2.26 hereof, the Company shall promptly inform Parent of such event. Except as expressly contemplated by this Agreement and as set forth in Section 4.1 of the Disclosure Schedule, the Company shall not, without the prior written consent of Parent:
(a) With respect to Indirect Parentmake any expenditures or enter into any commitment, Second Intermediary Parentcontract or transaction exceeding $50,000 individually or $100,000 in the aggregate or any commitment or transaction of the type described in Sections 2.8 (a), First Intermediary Parent or Parent(d), waive any stock repurchase rights(e), accelerate, amend or change the period of exercisability of options or restricted stock(g), or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange (k) hereof;
(i) except for any options granted under any the granting of such plans non-exclusive licenses relating to any employee, consultant or director the sale of the Company, except as provided for under this Agreement or the attached exhibits;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, 's products shipping on the date hereof and as previously disclosed entered into in writing the ordinary course of business, sell, license or made available transfer to Purchaserany person or entity any rights to any Intellectual Property used or owned by the Company or enter into any agreement with respect to any Intellectual Property used or owned by the Company with any person or entity or with respect to any Intellectual Property of any person or entity, (ii) buy or license any Intellectual Property or enter into any agreement with respect to the Intellectual Property of any person or entity, (iii) enter into any agreement with respect to the development of any Intellectual Property with a third party, (iv) or change pricing or royalties charged by the Company to its customers or licensees, or adopt any new severance plan, the pricing or amend royalties set or modify or alter in any manner any severance plan, agreement or arrangement existing on charged by persons who have licensed Intellectual Property to the date hereof or hire any new employees or consultantsCompany;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify violate the terms of any rights to the Company Intellectual PropertyContract, or enter into grants any contract, in the case of each such amendment or contract such that is reasonably likely to transfer cause the Company to incur liabilities, obligations or license to any person future patent rightsexpenses in excess of $50,000 or such that it is not terminable by the Company without payment or penalty upon not more than 30 days notice;
(d) Declarecommence or settle or cause to be commenced or settled any claim, litigation, action, suit, proceeding or arbitration;
(e) declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities stock or property) in respect of any capital stock Company Capital Stock, or split, combine or reclassify any capital stock Company Capital Stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock;
(e) Purchaseshares of Company Capital Stock, or repurchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of CompanyCompany Capital Stock (or options, warrants or other rights exercisable therefor), except in accordance with the agreements evidencing Existing Plan Options as in effect on the date hereof;
(f) Issueissue, delivergrant, sell, authorize, pledge deliver or otherwise encumber sell or authorize or propose any of the foregoing with respect to issuance, grant, delivery or sale of, or purchase or propose the purchase of, any shares of capital stockstock of the Company or securities convertible into, or enter into subscriptions, rights, warrants or options to acquire, or other agreements or commitments of any character obligating it to issue or purchase any such sharesshares or other convertible securities, except, as provided in Section 1.7 hereof, for the issuance of shares of Company Capital Stock upon the exercise of outstanding Existing Plan Options, or for the issuance of New Plan Options pursuant to Section 4.6 hereof or the repurchase of outstanding shares required pursuant to written agreements outstanding on the date hereof and disclosed on the Disclosure Schedule or make any changes to its capital structure;
(g) Cause, cause or permit or propose any amendments to its Articles of Incorporation, bylaws or other organizational documents of the Company Charter Documentsexcept as described in Section 2.4 of the Disclosure Schedule;
(h) Acquire acquire or agree to acquire by merging or consolidating with, or by purchasing any assets or equity interest in or a portion of the assets securities of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to enter into acquire any joint venturesassets which are material, strategic partnerships individually or alliancesin the aggregate, to the Company's business;
(i) Sell, lease, license, encumber except as allowed pursuant to Section 4.1(b) hereof or otherwise dispose of any properties or assets except sales of inventory in the ordinary course of business consistent with past practicesuch that the Company shall not incur liabilities, obligations or expenses in the -52- aggregate in excess of $250,000, sell, lease, license, transfer, assign, encumber, mortgage or otherwise dispose of any of its properties or assets or allow to exist a Lien, other than the Liens set forth in Section 2.11(b) to the Disclosure Schedule, on any such properties or assets;
(j) Incur incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, or issue or sell any debt securities or options, warrants, calls guarantee any debt or other rights to acquire any debt securities of Company, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than in connection with the financing of ordinary course trade payables by Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parentothers;
(k) Adopt or amend grant any material employee policy or arrangement, or enter into any employment contract or collective bargaining agreement loans (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director or employee, orincluding trade credits, except in the ordinary course of business consistent with past practice, increase practices) to others or purchase debt securities of others or amend the salaries or wage rates or fringe benefits (including rights to severance or indemnification) terms of its directors, officers, employees or consultantsany outstanding loan agreement;
(il) pay, dischargedischarge or satisfy, settle in an amount in excess of $50,000 in any one case, or satisfy $100,000 in the aggregate, any claimsclaim, liabilities liability or obligations obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), or litigation (whether or not commenced prior to the date of this Agreement) other than the payment, discharge, settlement discharge or satisfaction, satisfaction in the ordinary course of business consistent with past practice or in accordance with their termsof liabilities reflected, or liabilities recognized or disclosed reserved against in the most recent consolidated financial statements (or the notes thereto) of Company as provided to the Purchasers Current Balance Sheet, or incurred since after the date of such financial statements, or (ii) waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any confidentiality or similar agreement to which Company is a party or of which Company is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business in excess of $10,000;
(n) Except Current Balance Sheet in the ordinary course of business consistent with past practicethat is not otherwise in violation of this Agreement and that is reasonably likely not to cause the Company to incur liabilities, modifyobligations or expenses in the aggregate in excess of $50,000;
(m) hire employees (other than for the positions set forth in the Disclosure Schedule), terminate any employees or encourage any employees to resign from the Company; or grant any severance or termination pay (i) to any director or officer, or (ii) to any other employee except payments made pursuant to standard written agreements outstanding on the date hereof and disclosed in the Disclosure Schedule;
(n) adopt, amend or terminate any Material Contract employee benefit plan, or agreement enter into any employment contract, pay or agree to which Company is a party pay any special bonus or waivespecial remuneration to any director or employee, delay or increase the exercise ofsalaries, release wage rates or assign other compensation of its employees, except commission payments in the ordinary course of business, payments made pursuant to standard written agreements in place on the date hereof and disclosed in the Disclosure Schedule, or as may be required to conform any material rights or claims thereunderemployee benefit plan to applicable law;
(o) Enter intotake any action to accelerate the vesting schedule of any of the outstanding Existing Plan Options or Company Common Stock or amend, renew modify or materially modify waive any contracts, agreements, term or obligations relating provision of any stock restriction or repurchase agreement to which the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company other than renewals of existing nonexclusive contracts, agreements or obligationsis party;
(p) Except as required by GAAP, revalue any of its assets assets, including, without limitation, writing down the value of inventory or make any change writing off accounts receivable other than in accounting methods, principles or practicesthe ordinary course of business;
(q) Incur or enter into any agreement, contract or commitment requiring Company to pay in excess of $10,000, excluding routine purchase orders consistent with past practices;
(r) Settle any material litigation;
(s) Make make or change any material election in respect of Taxes, adopt or change any accounting method in respect of Taxes, file any Tax Returns or any amendment to any Tax Return other than in a manner consistent with prior practices, enter into any closing agreement, settle any claim or assessment in respects respect of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes;
(r) enter into any joint marketing arrangement without consent of Parent which shall not be unreasonably withheld, or any strategic alliance;
(s) make any purchases, or enter into any contract or commitment to purchase, any inventory, except any inventory purchased in the ordinary course of business or in accordance with a written inventory purchase plan previously approved by Parent;
(t) Agree enter into any new line of business;
(u) cancel or terminate any insurance policies held by the Company in effect on the date hereof;
(v) increase or decrease prices charged to its customers other than in the ordinary course of business;
(w) except as expressly permitted in this Agreement, enter into or amend any contract or transaction with any of its directors, officers, shareholders or Affiliates, other than the indemnification agreement to be entered into with its directors or officers, in substantially the form attached hereto in Exhibit D;
(x) except as required by applicable law or GAAP, make any material change in its method of accounting;
(y) approve or agree in writing or otherwise to take any of the actions described foregoing actions; or
(z) take any action or fail to take any action not prohibited by this Agreement, without the written consent of Parent, with the knowledge that such action or failure to take such action would result in Section 5.1(a) through (s) aboveany of the conditions to the Merger set forth in Article VI not being satisfied.
Appears in 1 contract
Samples: Agreement and Plan of Reorganization (Cirrus Logic Inc)
Conduct Prior to the Effective Time. 5.1 4.1 Conduct of Business by Company, Indirect Parent, Second Intermediary -------------------------------------------------------------------- Parent, First Intermediary Parent Company and Parent. During the period from the date -------------------------------------------- of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective TimeClosing, Indirect Parenteach of the Company, Second Intermediary Parent, First Intermediary Parent and Parent shall cause the Company to and the Company Merger Sub shall, except to the extent that Purchaser the other party shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed)writing, carry on its business, business in the usual, regular and ordinary coursecourse consistent with past practices, in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulationsregulations (except where noncompliance would not have a Material Adverse Effect), pay its debts and taxes when due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve substantially intact its present business organization, (ii) keep available the services of its present officers and employees and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has significant business dealings. In addition, except as required or permitted by the terms of this Agreement, and the transactions contemplated herebyAgreement or set forth in Schedule 4.1 hereto, without the prior written consent of Purchaserthe other party, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective TimeClosing, neither Indirect Parenteach of the Company, Second Intermediary Parent, First Intermediary Parent nor Parent shall permit the Company to, and Company Merger Sub shall not do any of the following:
(a) With respect to Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parent, waive Waive any stock repurchase rights, accelerate, amend or (except as specifically provided for herein) change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans to any employee, consultant or director of the Company, except as provided for under this Agreement or the attached exhibitsplans;
(b) Grant any severance or termination pay to any officer or employee except pursuant to applicable law, written agreements outstanding, or policies existing, existing on the date hereof and as previously or concurrently disclosed in writing or made available to Purchaserthe other party, or adopt any new severance plan, or amend or modify or alter in any manner any severance plan, agreement or arrangement existing on the date hereof or hire any new employees or consultantshereof;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify any material rights to any Intellectual Property of the Company Intellectual Propertyor Parent, as applicable, or enter into grants to transfer or license to any person future patent rights, other than in the ordinary course of business consistent with past practices provided that in no event shall the Company or Parent license on an exclusive basis or sell any Intellectual Property of the Company, or Parent as applicable;
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Companythe Company and Parent, as applicable, including repurchases of unvested shares at cost in connection with the termination of the relationship with any employee or consultant pursuant to stock option or purchase agreements in effect on the date hereof;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber encumber, or propose agree to any of the foregoing with respect to, any shares of capital stock or any securities convertible into or exchangeable for shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into or exchangeable for shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such sharesshares or convertible or exchangeable securities;
(g) Cause, permit or propose any amendments to the Company Amend its Charter Documents;
(h) Acquire Except for routine acquisitions of oil and gas leases and related properties in the ordinary course of business, acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of Parent or the Company as applicable, or enter into any joint ventures, strategic partnerships or alliancesalliances or other arrangements that provide for exclusivity of territory or otherwise restrict such party's ability to compete or to offer or sell any products or services;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets assets, except (A) sales of services and licenses of software in the ordinary course of business consistent with past practice, (B) sales of inventory in the ordinary course of business consistent with past practice, (C) the sale, lease or disposition (other than through licensing) of property or assets that are not material, individually or in the aggregate, to the business of such party and (D) routine dispositions of oil and gas leases and related properties in the ordinary course of business;
(j) Incur Except with respect to advances under (i) the Company's existing senior secured credit facility, or (ii) any overline facility obtained for the specific purpose of funding margin calls to secure the Company's hedging obligations, or (iii) any senior secured credit facility that replaces the Company's existing senior secured credit facility, incur any indebtedness for borrowed money in excess of $25,000 in the aggregate (other than purchase money debt in connection with the acquisition by the Company of vehicles, office equipment and operating equipment not exceeding $500,000 in the aggregate) or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Parent or the Company, as applicable, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than in connection with the financing of ordinary course trade payables by Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parentforegoing;
(k) Adopt or amend any material employee benefit plan, policy or arrangement, any employee stock purchase or employee stock option plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director or employee, or, except in the ordinary course of business consistent with past practice, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultants, except in the ordinary course of business consistent with past practices;
(il) payPay, discharge, settle or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), or litigation (whether or not commenced prior to the date of this Agreement) other than the payment, discharge, settlement or satisfaction, in the ordinary course of business consistent with past practice practices or in accordance with their terms, or liabilities recognized or disclosed in the Unaudited Financial Statements or in the most recent consolidated financial statements (or included in the notes thereto) of Company as provided Parent SEC Reports filed prior to the Purchasers date of this Agreement, as applicable, or incurred since the date of such financial statements, or (ii) waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any confidentiality or similar agreement to which the Company is a party or of which the Company is a beneficiary or to which Parent is a party or of which Parent is a beneficiary, as applicable;
(m) Make any individual or series of related payments outside of the ordinary course of business in excess of $10,000;
(n) Except in the ordinary course of business consistent with past practicepractices, modify, amend or terminate any Material Company Contract or agreement to which Company is a party Parent Contract, as applicable, or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into, renew or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company other than renewals of existing nonexclusive contracts, agreements or obligations;
(pn) Except as required by U.S. GAAP, revalue any of its assets or make any change in accounting methods, principles or practices;
(qo) Incur Except in the ordinary course of business consistent with past practices, incur or enter into any agreement, contract or commitment requiring Company such party to pay in excess of $10,000100,000 in any 12 month period, excluding routine purchase orders consistent other than the Company under a Routine Operating Contract;
(p) Engage in any action that could reasonably be expected to cause the Merger to fail to qualify as a "reorganization" under Section 368(a) of the Code;
(q) Make or rescind any Tax elections that, individually or in the aggregate, could be reasonably likely to adversely affect in any material respect the Tax liability or Tax attributes of such party, settle or compromise any material income tax liability or, except as required by applicable law, materially change any method of accounting for Tax purposes or prepare or file any Return in a manner inconsistent with past practicespractice;
(r) Settle Form, establish or acquire any material litigationsubsidiary except as contemplated by this Agreement;
(s) Make Permit any Person to exercise any of its discretionary rights under any Plan to provide for the automatic acceleration of any outstanding options, the termination of any outstanding repurchase rights or change the termination of any election in respect of Taxes, adopt or change any accounting method in respect of Taxes, file any Tax Returns or any amendment cancellation rights issued pursuant to any Tax Return other than in a manner consistent with prior practices, enter into any closing agreement, settle any claim or assessment in respects of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxessuch plans;
(t) Make capital expenditures except in accordance with prudent business and operational practices consistent with prior practice;
(u) Make or omit to take any action which would be reasonably anticipated to have a Material Adverse Effect;
(v) Enter into any transaction with or distribute or advance any assets or property to any of its officers, directors, partners, stockholders or other affiliates; or
(w) Agree in writing or otherwise agree, commit or resolve to take any of the actions described in Section 5.1(a4.1 (a) through (sv) above.
Appears in 1 contract
Samples: Merger Agreement (Tremisis Energy Acquisition Corp)
Conduct Prior to the Effective Time. 5.1 Conduct of Business by Company, Indirect Parent, Second Intermediary -------------------------------------------------------------------- Parent, First Intermediary Parent Company and ParentCentury. During the period from the date -------------------------------------------- of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective TimeClosing, Indirect Parent, Second Intermediary Parent, First Intermediary Parent the Companies and Parent shall cause the Company to and the Company Century shall, except to the extent that Purchaser the other party shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed)writing, carry on its business, business in the usual, regular and ordinary coursecourse consistent with past practices, in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulationsregulations (except where noncompliance would not have a Material Adverse Effect), pay its debts and taxes when due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve substantially intact its present business organization, (ii) keep available the services of its present officers officers, managers and employees employees, and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has significant business dealings. In addition, except as permitted or required by the terms of this Agreement, and Agreement or set forth on the transactions contemplated herebySchedule 5.1 hereto, without the prior written consent of Purchaserthe other party, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective TimeClosing, neither Indirect Parent, Second Intermediary Parent, First Intermediary Parent nor Parent none of the Companies or Century shall permit the Company to, and Company shall not do any of the following:
(a) With respect to Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parent, waive Waive any stock repurchase rights, accelerate, amend or (except as specifically provided for herein) change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans to any employee, consultant or director of the Company, except as provided for under this Agreement or the attached exhibitsplans;
(b) Grant any severance or termination pay to any officer officer, manager or employee except pursuant to applicable law, written agreements outstanding, or policies existing, existing on the date hereof and as previously or concurrently disclosed in writing or made available to Purchaserthe other party, or adopt any new severance plan, or amend or modify or alter in any manner any severance plan, agreement or arrangement existing on the date hereof or hire any new employees or consultantshereof;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify any material rights to the any Intellectual Property of either Company Intellectual Propertyor Century, as applicable, or enter into grants to transfer or license to any person future patent rights, other than in the ordinary course of business consistent with past practices provided that in no event shall either Company or Century license on an exclusive basis or sell any Intellectual Property of Company or Century, as applicable;
(d) DeclareExcept for employment agreements in the ordinary course or otherwise scheduled or set forth in this Agreement, declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock stock, membership interests or ownership interests, or split, combine or reclassify any capital stock stock, membership interests or ownership interests, or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock, membership interests or ownership interests;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock, membership interests or ownership interests of either Company or Century, as applicable, except repurchases of unvested shares, membership interests or ownership interests at cost in connection with the termination of the employment relationship with any employee pursuant to stock of Companyoption or purchase agreements in effect on the date hereof;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber encumber, or propose agree to any of the foregoing with respect to to, any shares of capital stock, membership interests or ownership interests or any securities convertible into or exchangeable for shares of capital stock, membership interests or ownership interests, or subscriptions, rights, warrants or options to acquire any shares of capital stock, membership interests or ownership interests or any securities convertible into or exchangeable for shares of capital stock, membership interests or ownership interests, or enter into other agreements or commitments of any character obligating it to issue any such shares, membership interests, ownership interests or convertible or exchangeable securities (except relating to employment and similar agreements);
(g) Cause, permit or propose any amendments to the Company Amend its Charter Documents, except for the filing of the Certificate of Designations by Century;
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of Century or either Company, as applicable, or enter into any joint ventures, strategic partnerships or alliancesalliances or other arrangements that provide for exclusivity of territory or otherwise restrict such party's ability to compete or to offer or sell any products or services;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets assets, except sales of inventory in the ordinary course of business consistent with past practicepractice and, except for the sale, lease or disposition (other than through licensing) of property or assets which are not material, individually or in the aggregate, to the business of such party;
(j) Incur any indebtedness for borrowed money in excess of $100,000 in the aggregate or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Century or either Company, as applicable, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than in connection with the financing of ordinary course trade payables by Indirect Parentpurchase agreements relating to preparing for production, Second Intermediary Parent, First Intermediary Parent or Parentmarketing and selling products and services;
(k) Adopt or amend any material employee benefit plan, policy or arrangement, any employee stock purchase or employee stock option plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"practice), pay any special bonus or special remuneration to any director or employee, or, except in the ordinary course of business consistent with past practice, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultants, except in the ordinary course of business consistent with past practices and other than for new hires in the ordinary course;
(il) payPay, discharge, settle or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), or litigation (whether or not commenced prior to the date of this Agreement) other than the payment, discharge, settlement or satisfaction, in the ordinary course of business consistent with past practice practices or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of either Company or of Century, as provided to the Purchasers applicable, or incurred since the date of such financial statements, or (ii) waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any confidentiality or similar agreement to which either Company is a party or of which either Company is a beneficiary or to which Century is a party or of which Century is a beneficiary, as applicable;
(m) Make any individual or series of related payments outside of the ordinary course of business in excess of $10,000;
(n) Except in the ordinary course of business consistent with past practicepractices, modify, amend or terminate any Material Contract of either Company or agreement to which Company is a party Century, as applicable, or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into, renew or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company other than renewals of existing nonexclusive contracts, agreements or obligations;
(pn) Except as required by U.S. GAAP, revalue any of its assets or make any change in accounting methods, principles or practices;
(qo) Incur or enter into any agreement, contract or commitment requiring Company such party to pay in excess of $10,000100,000 in any 12 month period, excluding routine purchase orders consistent with past practicesother than in the ordinary course or otherwise provided in this Agreement and employment agreements which may be entered into by the Company;
(p) Engage in any action that could reasonably be expected to cause the Transaction to fail to qualify as a tax-deferred exchange under Section 351 of the Code;
(q) Settle any litigation;
(r) Settle Make or rescind any Tax elections that, individually or in the aggregate, could be reasonably likely to adversely affect in any material litigationrespect the Tax liability or Tax attributes of such party, settle or compromise any material income tax liability or, except as required by applicable law, materially change any method of accounting for Tax purposes or prepare or file any Return in a manner inconsistent with past practice;
(s) Make Form, establish or change acquire any election in respect of Taxes, adopt or change any accounting method in respect of Taxes, file any Tax Returns or any amendment to any Tax Return other than in a manner consistent with prior practices, enter into any closing agreement, settle any claim or assessment in respects of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of TaxesSubsidiary;
(t) Permit any Person to exercise any of its discretionary rights under any Plan to provide for the automatic acceleration of any outstanding options, the termination of any outstanding repurchase rights or the termination of any cancellation rights issued pursuant to such plans; or
(u) Agree in writing or otherwise agree, commit or resolve to take any of the actions described in Section 5.1(a5.1 (a) through (st) above.
Appears in 1 contract
Samples: Exchange Agreement (Century Pacific Financial Corp)
Conduct Prior to the Effective Time. 5.1 4.1 Conduct of Business by Company, Indirect Parent, Second Intermediary -------------------------------------------------------------------- Parent, First Intermediary Parent Company and Parent. During the period from the date -------------------------------------------- of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective TimeClosing, Indirect Parenteach of the Company, Second Intermediary Parent, First Intermediary Parent and Parent shall cause the Company to and the Company Merger Sub shall, except to the extent that Purchaser the other party shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed)writing, carry on its business, business in the usual, regular and ordinary coursecourse consistent with past practices, in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulationsregulations (except where noncompliance would not have a Material Adverse Effect), pay its debts and taxes when due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve substantially intact its present business organization, (ii) keep available the services of its present officers and employees and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has significant business dealings. In addition, except as required or permitted by the terms of this Agreement, and the transactions contemplated hereby, without the prior written consent of Purchaserthe other party, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective TimeClosing, neither Indirect Parent, Second Intermediary Parent, First Intermediary Parent nor Parent shall permit each of the Company toand its Subsidiaries, Parent and Company Merger Sub shall not do any of the following:
(a) With respect to Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parent, waive Waive any stock repurchase rights, accelerate, amend or (except as specifically provided for herein) change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans to any employee, consultant or director of the Company, except as provided for under this Agreement or the attached exhibitsplans;
(b) Grant any severance or termination pay to any officer or employee except pursuant to applicable law, written agreements outstanding, or policies existing, existing on the date hereof and as previously or concurrently disclosed in writing or made available to Purchaserthe other party, or adopt any new severance plan, or amend or modify or alter in any manner any severance plan, agreement or arrangement existing on the date hereof or hire any new employees or consultantshereof;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify any material rights to any Intellectual Property of the Company Intellectual Propertyor Parent, as applicable, or enter into grants any agreements to transfer or license to any person future patent rights, other than in the ordinary course of business consistent with past practices, provided that in no event shall the Company or Parent license on an exclusive basis or sell any Intellectual Property of the Company or Parent, as applicable;
(d) DeclareExcept for the Reverse Split by Parent and the conversion of the Series A Preferred Stock into Parent Common Stock to be completed following the Closing, declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock;
(e) PurchaseExcept as set forth in Schedule 4.1(e) hereof, purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Companythe Company and Parent, as applicable, except repurchases of unvested shares at cost in connection with the termination of the employment relationship with any employee pursuant to stock option or purchase agreements in effect on the date hereof;
(f) IssueExcept for the Equity Financing, issue, deliver, sell, authorize, pledge or otherwise encumber encumber, or propose agree to any of the foregoing with respect to, any shares of capital stock or any securities convertible into or exchangeable for shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into or exchangeable for shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such sharesshares or convertible or exchangeable securities;
(g) Cause, permit or propose any amendments Amend their respective Charter Documents except as contemplated by the filing of the Certificate of Designations to the Company Charter Documentsbe filed by Parent prior to Closing;
(h) Acquire Except as disclosed in Schedule 4.1(h) hereto, acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of Parent or the Company as applicable, or enter into any joint ventures, strategic partnerships or alliancesalliances or other arrangements that provide for exclusivity of territory or otherwise restrict such party's ability to compete or to offer or sell any products or services;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets assets, except sales of inventory in the ordinary course of business consistent with past practicepractice and, except for the sale, lease or disposition (other than through licensing) of property or assets which are not material, individually or in the aggregate, to the business of such party;
(j) Incur Except as disclosed in Schedule 4.1(j) hereto, incur any indebtedness for borrowed money in excess of $50,000 in the aggregate or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Parent or the Company, as applicable, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than in connection with the financing of ordinary course trade payables by Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parentforegoing;
(k) Adopt Except as disclosed in Schedule 4.1(k) hereto or as contemplated by this Agreement, adopt or amend any material employee benefit plan, policy or arrangement, any employee stock purchase or employee stock option plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director or employee, or, except in the ordinary course of business consistent with past practice, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultants, except in the ordinary course of business consistent with past practices;
(l) Except as disclosed in Schedule 4.1
(1) hereto, (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), or litigation (whether or not commenced prior to the date of this Agreement) other than the payment, discharge, settlement or satisfaction, in the ordinary course of business consistent with past practice practices or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of the Company or of Parent included in Parent SEC Reports, as provided to the Purchasers applicable, or incurred since the date of such financial statements, or (ii) waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any confidentiality or similar agreement to which the Company is a party or of which the Company is a beneficiary or to which Parent is a party or of which Parent is a beneficiary, as applicable;
(m) Make any individual or series of related payments outside of the ordinary course of business in excess of $10,000;
(nExcept as disclosed on Schedule 4.2(m) Except and except in the ordinary course of business consistent with past practicepractices, modify, amend or terminate any Material Contract of the Company, or Parent, as applicable, or other material contract or material agreement to which Company the Company, or Parent is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into, renew or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company other than renewals of existing nonexclusive contracts, agreements or obligations;
(pn) Except as required by U.S. GAAP, revalue any of its assets or make any change in accounting methods, principles or practices;
(qo) Incur Except as set forth in Schedule 4.1(o) hereto or in the ordinary course of business consistent with past practices, incur or enter into any agreement, contract or commitment requiring Company such party to pay in excess of $10,00050,000 in any 12 month period;
(p) Engage in any action that could reasonably be expected to cause the Transaction to fail to qualify as a "reorganization" under Section 368(a) of the Code;
(q) Except as set forth in Schedule 4.1(q) hereto, excluding routine purchase orders consistent with past practicessettle any litigation;
(r) Settle Make or rescind any Tax elections that, individually or in the aggregate, could be reasonably likely to adversely affect in any material litigationrespect the Tax liability or Tax attributes of such party, settle or compromise any material income tax liability or, except as required by applicable law, materially change any method of accounting for Tax purposes or prepare or file any Return in a manner inconsistent with past practice;
(s) Make Form, establish or change acquire any election in respect of Taxes, adopt or change any accounting method in respect of Taxes, file any Tax Returns or any amendment to any Tax Return other than in a manner consistent with prior practices, enter into any closing agreement, settle any claim or assessment in respects of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of TaxesSubsidiary except as contemplated by this Agreement;
(t) Permit any Person to exercise any of its discretionary rights under any Plan to provide for the automatic acceleration of any outstanding options, the termination of any outstanding repurchase rights or the termination of any cancellation rights issued pursuant to such plans;
(u) Agree in writing or otherwise agree, commit or resolve to take any of the actions described in Section 5.1(a4.1 (a) through (sv) above.
Appears in 1 contract
Samples: Merger Agreement (Applied Spectrum Technologies Inc)
Conduct Prior to the Effective Time. 5.1 Conduct of Business by Company, Indirect Parent, Second Intermediary -------------------------------------------------------------------- Parent, First Intermediary Parent Company and ParentChiste. During the period from the date -------------------------------------------- of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective TimeClosing, Indirect Parent, Second Intermediary Parent, First Intermediary Parent and Parent shall cause the Company to and the Company Chiste shall, except to the extent that Purchaser the other party shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed)writing, carry on its business, business in the usual, regular and ordinary coursecourse consistent with past practices, in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulationsregulations (except where noncompliance would not have a Material Adverse Effect), pay its debts and taxes when due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve substantially intact its present business organization, (ii) keep available the services of its present officers officers, managers and employees employees, and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has significant business dealings. In addition, except as permitted or required by the terms of this Agreement, and Agreement or set forth on the transactions contemplated herebySchedule 5.1 hereto, without the prior written consent of Purchaserthe other party, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective TimeClosing, neither Indirect Parent, Second Intermediary Parent, First Intermediary Parent nor Parent shall permit the each of Company to, and Company Chiste shall not do any of the following:
(a) With respect to Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parent, waive Waive any stock repurchase rights, accelerate, amend or (except as specifically provided for herein) change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans to any employee, consultant or director of the Company, except as provided for under this Agreement or the attached exhibitsplans;
(b) Grant any severance or termination pay to any officer officer, manager or employee except pursuant to applicable law, written agreements outstanding, or policies existing, existing on the date hereof and as previously or concurrently disclosed in writing or made available to Purchaserthe other party, or adopt any new severance plan, or amend or modify or alter in any manner any severance plan, agreement or arrangement existing on the date hereof or hire any new employees or consultantshereof;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify any material rights to the any Intellectual Property of Company Intellectual Propertyor Chiste, as applicable, or enter into grants to transfer or license to any person future patent rights, other than in the ordinary course of business consistent with past practices provided that in no event shall Company or Chiste license on an exclusive basis or sell any Intellectual Property of Company or Chiste, as applicable;
(d) DeclareExcept in respect of the Private Placement and the Investment, employment agreements in the ordinary course or otherwise scheduled or set forth in this Agreement, declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock stock, membership interests or ownership interests, or split, combine or reclassify any capital stock stock, membership interests or ownership interests, or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock, membership interests or ownership interests;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock, membership interests or ownership interests of Company and Chiste, as applicable, except repurchases of unvested shares, membership interests or ownership interests at cost in connection with the termination of the employment relationship with any employee pursuant to stock of Companyoption or purchase agreements in effect on the date hereof;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber encumber, or propose agree to any of the foregoing with respect to to, any shares of capital stock, membership interests or ownership interests or any securities convertible into or exchangeable for shares of capital stock, membership interests or ownership interests, or subscriptions, rights, warrants or options to acquire any shares of capital stock, membership interests or ownership interests or any securities convertible into or exchangeable for shares of capital stock, membership interests or ownership interests, or enter into other agreements or commitments of any character obligating it to issue any such shares, membership interests, ownership interests or convertible or exchangeable securities (except relating to employment and similar agreements and the Private Placement and the proposed Investment);
(g) CauseAmend its Charter Documents (except with respect to Company to add provisions relating to "drag along rights", permit or propose any amendments to employment related issues and the Company Charter Documentssale of Interests in the Private Placement);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of Chiste or Company, as applicable, or enter into any joint ventures, strategic partnerships or alliancesalliances or other arrangements that provide for exclusivity of territory or otherwise restrict such party's ability to compete or to offer or sell any products or services;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets assets, except sales of inventory in the ordinary course of business consistent with past practicepractice and, except for the sale, lease or disposition (other than through licensing) of property or assets which are not material, individually or in the aggregate, to the business of such party;
(j) Incur any indebtedness for borrowed money in excess of $100,000 in the aggregate or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Chiste or Company, as applicable, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than in connection with the financing of ordinary course trade payables by Indirect Parentpurchase agreements relating to preparing for production, Second Intermediary Parent, First Intermediary Parent or Parentmarketing and selling Company product and services;
(k) Adopt or amend any material employee benefit plan, policy or arrangement, any employee stock purchase or employee stock option plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"practice), pay any special bonus or special remuneration to any director or employee, or, except in the ordinary course of business consistent with past practice, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultants, except in the ordinary course of business consistent with past practices and other than for new hires in the ordinary course;
(il) pay, discharge, settle or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), or litigation (whether or not commenced prior to the date of this Agreement) other than the payment, discharge, settlement or satisfaction, in the ordinary course of business consistent with past practice practices or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company or of Chiste, as provided to the Purchasers applicable, or incurred since the date of such financial statements, or (ii) waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any confidentiality or similar agreement to which Company is a party or of which Company is a beneficiary or to which Chiste is a party or of which Chiste is a beneficiary, as applicable;
(m) Make any individual or series of related payments outside of the ordinary course of business in excess of $10,000;
(n) Except in the ordinary course of business consistent with past practicepractices, modify, amend or terminate any Material Contract of Company or agreement to which Company is a party Chiste, as applicable, or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into, renew or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company other than renewals of existing nonexclusive contracts, agreements or obligations;
(pn) Except as required by U.S. GAAP, revalue any of its assets or make any change in accounting methods, principles or practices;
(qo) Incur or enter into any agreement, contract or commitment requiring Company such party to pay in excess of $10,000100,000 in any 12 month period, excluding routine purchase orders consistent with past practicesother than in the ordinary course or otherwise provided in this Agreement and employment agreements which may be entered into by the Company;
(p) Engage in any action that could reasonably be expected to cause the Transaction to fail to qualify as a "reorganization" under Section 351 of the Code;
(q) Settle any litigation;
(r) Settle Make or rescind any Tax elections that, individually or in the aggregate, could be reasonably likely to adversely affect in any material litigationrespect the Tax liability or Tax attributes of such party, settle or compromise any material income tax liability or, except as required by applicable law, materially change any method of accounting for Tax purposes or prepare or file any Return in a manner inconsistent with past practice;
(s) Make Form, establish or change acquire any election in respect of Taxes, adopt or change any accounting method in respect of Taxes, file any Tax Returns or any amendment to any Tax Return other than in a manner consistent with prior practices, enter into any closing agreement, settle any claim or assessment in respects of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of TaxesSubsidiary;
(t) Permit the any Person to exercise any of its discretionary rights under any Plan to provide for the automatic acceleration of any outstanding options, the termination of any outstanding repurchase rights or the termination of any cancellation rights issued pursuant to such plans; or
(u) Agree in writing or otherwise agree, commit or resolve to take any of the actions described in Section 5.1(a5.1 (a) through (st) above.
Appears in 1 contract
Samples: Exchange Agreement (Chiste Corp)
Conduct Prior to the Effective Time. 5.1 Conduct of Business by of the Company, Indirect Parent, Second Intermediary -------------------------------------------------------------------- Parent, First Intermediary Parent and Parent. During the period from the date -------------------------------------------- of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, Indirect Parent, Second Intermediary Parent, First Intermediary Parent and Parent shall cause the Company agrees, and agrees to and the Company shallcause each of its Subsidiaries (in each case, except to the extent that Purchaser Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), writing) to carry on its business, business in 35 41 the usual, regular and ordinary course, course in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulationsconducted, to pay its debts and taxes Taxes when due subject due, to good faith disputes over such debts or taxes, pay or perform other material obligations when due, and and, to the extent consistent with such business, to use its commercially all reasonable efforts consistent with past practices practice and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and key employees and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, licensees and others having business dealings with which it has significant business dealingsit. The Company shall promptly notify Parent of any materially negative event involving or adversely affecting the Company or its Subsidiaries. In addition, except as permitted by the terms of this Agreement, and the transactions contemplated hereby, without the prior written consent of PurchaserParent, which consent shall not be unreasonably withheld, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, neither Indirect Parent, Second Intermediary Parent, First Intermediary Parent nor Parent shall permit the Company to, and Company nor its Subsidiaries shall not do any of the following:
(a) With respect to Indirect Parent, Second Intermediary Parent, First Intermediary Parent Make any payments or Parent, waive enter into any stock repurchase rights, accelerate, amend commitment or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans to any employee, consultant or director transaction outside of the Company, except as provided for under this Agreement ordinary course of business in excess of $25,000 or in the attached exhibitsordinary course of business in excess of $50,000;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstandingExcept in the ordinary course of business, or policies existingmodify, on the date hereof and as previously disclosed in writing or made available to Purchaser, or adopt any new severance plan, or amend or modify terminate any material contract or alter in agreement to which the Company is a party or waive, release or assign any manner any severance plan, agreement material rights or arrangement existing on the date hereof or hire any new employees or consultantsclaims thereunder;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify any rights to the Company Intellectual PropertyProperty (other than pursuant to end-user licenses granted to customers of the Company in the ordinary course of business, provided that no such license shall (i) contain any right of refusal to the license or (ii) involve the transfer of product(s) to any person or entity in violation of applicable U.S. export laws and regulations) or enter into grants to transfer or license to any person future patent rights;
(d) Enter into or amend any agreements pursuant to which any other party is granted marketing, distribution or similar rights of any type or scope with respect to any products of the Company;
(e) Amend or otherwise modify (or agree to do so), or violate the terms of, any of the Contracts;
(f) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities stock or property) in respect of any capital stock Company Capital Stock, or split, combine or reclassify any capital stock Company Capital Stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stockCompany Capital Stock;
(eg) Purchase, redeem or otherwise acquire, directly or indirectly, any Company Capital Stock, except repurchases of unvested shares at cost in connection with the termination of capital the employment relationship with any employee or consultant pursuant to stock of Companyoption or purchase agreements in effect on the date hereof;
(fh) Issue, grant, deliver, sell, pledge or authorize, pledge or otherwise encumber or propose to do any of the foregoing with respect to foregoing, any shares of capital stockCompany Capital Stock or securities convertible into, or enter into 36 42 subscriptions, rights, warrants or options to acquire, or other agreements or commitments of any character obligating it to issue any such sharesshares of Company Capital Stock or other convertible securities, except for (A) the issuance of any Company Capital Stock upon exercise or conversion of presently outstanding Company Options, warrants or Company Preferred Stock, (B) the grant of stock options to new employees pursuant to outstanding written offers of employment, and (C) the issuance on terms acceptable to Parent of a promissory note in original principal amount of up to $500,000 (the "Bridge Note") the proceeds of which shall be used only to cover ordinary course operating expenses of the Company from the issuance of the Bridge Note through the Effective Time;
(gi) Cause, Cause or permit or propose any amendments to the Company Charter Documentsits Certificate of Incorporation or Bylaws or equivalent charter documents;
(hj) Acquire or agree to acquire by merging or consolidating with, or by purchasing any assets or equity interest in or a portion of the assets securities of, or by any other manner, any business or any corporation, partnership, association association, joint venture or other business organization or division thereof, or otherwise acquire or agree to enter into acquire outside of the ordinary course of business any joint venturesassets in any amount, strategic partnerships or alliancesin the ordinary course of business in an amount in excess of $25,000 in the case of a single transaction or in excess of $50,000 in the aggregate;
(ik) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory in the ordinary course of business consistent with past practicepractice and except for the sale, lease or disposition (other than through licensing) of a property or assets which are not material, individually or in the aggregate, to the business of Company;
(jl) Incur Except in the case of the Bridge Note, incur individual liabilities in excess of $25,000 in any one case or $50,000 in the aggregate or incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than in connection with the financing of ordinary course trade payables by Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parentconsistent with past practice;
(km) Grant any severance or termination pay (i) to any director or officer or (ii) to any other employee except payments made pursuant to written agreements outstanding on the date hereof and as disclosed in the Company Schedules, or adopt any new severance plan;
(n) Adopt or amend any material employee policy or arrangementbenefit plan, or enter into any employment contract contract, extend employment offers, pay or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), agree to pay any special bonus or special remuneration to any director or employee, or, except in the ordinary course of business consistent with past practice, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultants, except (i) as consistent with the ordinary course of the Company consistent with past practice with employees who are terminable "at will," (ii) the Company may pay its employees the Special Bonus (as defined in Section 6.20(b)) and (iii) the Company may negotiate amendments to the outstanding Company Options and warrants as provided in Section 6.19);
(io) payEffect or agree to effect, dischargeincluding by way of hiring or involuntary termination, settle any change in the Company's directors, officers or satisfy key employees;
(p) Revalue any claimsof its assets, liabilities including without limitation writing down the value of inventory or obligations (absolute, accrued, asserted writing off notes or unasserted, contingent or otherwise), or litigation (whether or not commenced prior to the date of this Agreement) accounts receivable other than the payment, discharge, settlement or satisfaction, in the ordinary course of business consistent with past practice or in accordance with their termsbusiness, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company as provided to the Purchasers or incurred since the date of such financial statements, or (ii) waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any confidentiality or similar agreement to which Company is a party or of which Company is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business in excess of $10,000;
(n) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any Material Contract or agreement to which Company is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into, renew or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company other than renewals of existing nonexclusive contracts, agreements or obligations;
(p) Except except as required by GAAP, revalue any of its assets or make any change in accounting methods, principles or practices;
(q) Incur Pay, discharge or enter into any agreementsatisfy, contract or commitment requiring Company to pay in an amount in excess of $10,00025,000 (in any one case) or $50,000 (in the aggregate), excluding routine purchase orders any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business of liabilities reflected or reserved against in the Company Financials (or the notes thereto) or that arose in the ordinary course of business subsequent to March 31, 2000 or expenses consistent with past practicesthe provisions of this Agreement incurred in connection with any transaction contemplated hereby;
(r) Settle any material litigation;
(s) Make or change any material election in respect of Taxes, adopt or change any accounting method in respect of Taxes, file any Tax Returns or any amendment to any Tax Return other than in a manner consistent with prior practices, enter into any closing agreement, settle any claim or assessment in respects respect of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes;
(s) Enter into any strategic alliance, joint development or joint marketing agreement;
(t) Agree Commence a lawsuit other than (i) for the routine collection of bills, (ii) in such cases where it, in good faith, determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided that it consults with Parent prior to the filing of such a suit or (iii) for a breach of this Agreement;
(u) Materially reduce the amount of any insurance coverage provided by or fail to renew any existing insurance policies;
(v) Engage in any action with the intent to directly or indirectly adversely impact any of the transactions contemplated by this Agreement;
(w) Engage in any action that could reasonably be expected to cause the Merger to fail to qualify as a "reorganization" under Section 368(a) of the Code; or
(x) Take, or agree in writing or otherwise to take take, any of the actions described in Section Sections 5.1(a) through (sw) above, or any other action that would prevent the Company from performing or cause the Company not to perform its covenants hereunder.
Appears in 1 contract
Conduct Prior to the Effective Time. 5.1 4.1 Conduct of Business by Company, Indirect Parent, Second Intermediary -------------------------------------------------------------------- Parent, First Intermediary Parent and Parent. the Company During the period from the date -------------------------------------------- of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, Indirect Parent, Second Intermediary Parent, First Intermediary Parent and Parent shall cause the Company to and the Company shall, except to the extent that Purchaser each of its subsidiaries shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), carry on its business, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and business in compliance with all applicable laws and regulations, pay its debts and taxes when due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when duedue subject to good faith disputes over such obligations, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, ; (ii) keep available the services of its present officers and employees employees; and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has significant business dealings. In addition, except as permitted by the terms of this Agreement, and except as provided in Article 4 of the transactions contemplated herebyCompany Schedules, without the prior written consent of PurchaserParent, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, neither Indirect Parent, Second Intermediary Parent, First Intermediary Parent nor Parent shall permit the Company to, and Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) With respect to Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parent, waive Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans to any employee, consultant or director of the Company, except as provided for under this Agreement or the attached exhibitsplans;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing or made available to PurchaserParent, or adopt any new severance plan, or amend or modify or alter in any manner any severance plan, agreement or arrangement existing on the date hereof or hire any new employees or consultants;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in 51 any material respect any rights to the Company Intellectual Property, or enter into grants to transfer or license to any person future patent rights, other than non-exclusive licenses in the ordinary course of business and consistent with past practice;
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock, other than the exercise of options or warrants or conversions of securities outstanding on the date of this Agreement or granted pursuant to Section 4.1(f)(i) below (including any exchange of Series D Common Stock for Series F Preferred Stock in connection with the Offer to Purchase);
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Companythe Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the employment relationship with any employee pursuant to stock option or purchase agreements in effect on the date hereof, other than the exercise of options or warrants or conversions of securities outstanding on the date of this Agreement or granted pursuant to Section 4.1(f)(i) (including any exchange of Series D Common Stock for Series F Preferred Stock in connection with the Offer to Purchase);
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber encumber, any shares of capital stock or propose any securities convertible into shares of the foregoing with respect capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares;shares or convertible securities, other than (i) stock options for Company Common Stock pursuant to the Company Stock Option Plans granted to employees of the Company to purchase up to 700,000 shares (as appropriately adjusted for stock splits and the like) of Company Common Stock to employees of the Company (other than officers of the Company) with strike prices no less than the fair market value of the Parent Common Stock at the time of grant multiplied by the Exchange Ratio and otherwise with vesting schedules and other terms and conditions consistent with Parent's stock option grants to Parent's employees; (ii) issuance of shares of the Company Common Stock and Series F Preferred Stock pursuant to the exercise of stock options or warrants therefor outstanding as of the date of this Agreement or granted pursuant to the preceding clause (i); (iii) the exercise of options or warrants or conversions of securities outstanding on the date of this Agreement or granted pursuant to clause (i) above (including any exchange of Series D Common Stock for Series F Preferred Stock in connection with the Offer to Purchase), and (iv) the issuance of shares contemplated by Sections 6.3(i) and 6.3(j).
(g) Cause, permit or propose any amendments to the Company Charter Documents;
(h) Acquire or agree to acquire by merging or consolidating withits Articles of Incorporation, or by purchasing any equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association Bylaws or other business organization charter documents (or division thereof, or otherwise acquire or agree to enter into any joint ventures, strategic partnerships or alliances;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory in the ordinary course of business consistent with past practice;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect similar governing instruments of any of the foregoing other than in connection with the financing of ordinary course trade payables by Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parent;
(kits subsidiaries) Adopt or amend any material employee policy or arrangement, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into except as set forth in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director or employee, or, except in the ordinary course of business consistent with past practice, increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultantsCompany Conversion Agreements;
(i) pay, discharge, settle or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), or litigation (whether or not commenced prior to the date of this Agreement) other than the payment, discharge, settlement or satisfaction, in the ordinary course of business consistent with past practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company as provided to the Purchasers or incurred since the date of such financial statements, or (ii) waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any confidentiality or similar agreement to which Company is a party or of which Company is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business in excess of $10,000;
(n) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any Material Contract or agreement to which Company is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into, renew or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company other than renewals of existing nonexclusive contracts, agreements or obligations;
(p) Except as required by GAAP, revalue any of its assets or make any change in accounting methods, principles or practices;
(q) Incur or enter into any agreement, contract or commitment requiring Company to pay in excess of $10,000, excluding routine purchase orders consistent with past practices;
(r) Settle any material litigation;
(s) Make or change any election in respect of Taxes, adopt or change any accounting method in respect of Taxes, file any Tax Returns or any amendment to any Tax Return other than in a manner consistent with prior practices, enter into any closing agreement, settle any claim or assessment in respects of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes;
(t) Agree in writing or otherwise to take any of the actions described in Section 5.1(a) through (s) above.
Appears in 1 contract
Samples: Agreement and Plan of Reorganization (Healtheon Corp)
Conduct Prior to the Effective Time. 5.1 4.1 Conduct of Business by the Company, Indirect Parent, Second Intermediary -------------------------------------------------------------------- Parent, First Intermediary Parent and Parent. During the period from the date -------------------------------------------- of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, Indirect Parent, Second Intermediary Parent, First Intermediary Parent and Parent shall cause the Company to and the Company each of its subsidiaries shall, except to the extent that Purchaser Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed)writing, carry on its business, in all material respects, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulations, pay its debts and taxes when due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when duedue subject to good faith disputes over such obligations, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has significant business dealings. In addition, the Company will use reasonable efforts to promptly notify Parent of any material event involving the Company's business or operations, to the extent that the Company has knowledge of any such material event. In addition, except as permitted by the terms of this Agreement, and except as provided in Article 4 of the transactions contemplated herebyCompany Schedules, without the prior written consent of PurchaserParent, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, neither Indirect Parent, Second Intermediary Parent, First Intermediary Parent nor Parent shall permit the Company to, and Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) With respect to Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parent, waive Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans to any employee, consultant or director of the Company, except as provided for under this Agreement or the attached exhibitsplans;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing or made available to PurchaserParent, or adopt any new severance plan, or amend or modify or alter in any manner any severance plan, agreement or arrangement existing on the date hereof or hire any new employees or consultants;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to transfer or license to any person future patent rights, other than non-exclusive licenses in the ordinary course of business and consistent with past practice;
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Companythe Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the employment relationship with any employee pursuant to stock option or purchase agreements in effect on the date hereof;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber encumber, any shares of capital stock or propose any securities convertible into shares of the foregoing with respect capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such sharesshares or convertible securities, other than (i) stock options pursuant to the Company Stock Option Plans granted to new employees of the Company to purchase up to 15,000 shares in the aggregate (as appropriately adjusted for stock splits and the like) of Company Common Stock with strike prices equal to the fair market value of the Company Common Stock at the time of grant and otherwise with vesting schedules and other terms and conditions consistent with past practice, (ii) issuance of shares of Company Common Stock pursuant to the exercise of stock options therefor outstanding as of the date of this Agreement or granted pursuant to the preceding clause (i), (iii) issuance of shares of the Company Common Stock to participants in the Company Purchase Plan pursuant to the terms thereof, and (iv) issuance of shares of Company Common Stock pursuant to exercise of the Warrants;
(g) Cause, permit or propose any amendments to the Company Charter Documentsits Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any material joint ventures, strategic partnerships or alliances;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment in the ordinary course of business consistent with past practice;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables by Indirect Parent, Second Intermediary Parent, First Intermediary Parent consistent with past practice or Parent(ii) pursuant to existing credit facilities in the ordinary course of business;
(k) Adopt Other than the payment of routine, annual bonuses to employees, consistent with past practices, adopt or amend any material employee policy benefit plan or arrangementemployee stock purchase or employee stock option plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director or employee, or, except in the ordinary course of business consistent with past practice, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultants;
(i) pay, discharge, settle or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), or litigation (whether or not commenced prior to the date of this Agreement) consultants other than the payment, discharge, settlement or satisfaction, in the ordinary course of business business, consistent with past practice or in accordance with their termspractice, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company as provided to the Purchasers or incurred since the date of such financial statements, or (ii) waive the benefits of, agree to modify change in any manner, terminate, release material respect any person from management policies or knowingly fail to enforce any confidentiality or similar agreement to which Company is a party or of which Company is a beneficiaryprocedures;
(ml) Make any individual or series of related payments outside of the ordinary course of business in excess of $10,000100,000;
(nm) Except as set forth on Part 4.1(m) of the Company Schedules and except for any modifications or amendments that are made in the ordinary course of business consistent with past practice, modify, amend or terminate any Material Company Contract or other material contract or agreement to which the Company or any subsidiary thereof is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(on) Enter into, renew or materially modify into any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company other than renewals in the ordinary course of existing nonexclusive contracts, agreements or obligationsbusiness consistent with past practice;
(po) Except Revalue any of its assets or, except as required by GAAP, revalue any of its assets or make any change in accounting methods, principles or practices;
(p) Engage in any action that could reasonably be expected to cause the Merger to fail to qualify as a "reorganization" under Section 368(a) of the Code, whether or not otherwise permitted by the provisions of this Article IV; or
(q) Incur Engage in any action with the intent to directly or enter into indirectly adversely impact any agreement, contract or commitment requiring Company to pay of the transactions contemplated by this Agreement; or
(r) Hire any employee with an annual compensation level in excess of $10,000, excluding routine purchase orders consistent with past practices;
(r) Settle any material litigation;100,000; or
(s) Make or change any election in respect of Taxes, adopt or change any accounting method in respect of Taxes, file any Tax Returns or any amendment to any Tax Return other than in a manner consistent with prior practices, enter into any closing agreement, settle any claim or assessment in respects of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes;
(t) Agree in writing or otherwise to take any of the actions described in Section 5.1(a(a) through (sr) above.
Appears in 1 contract
Samples: Agreement and Plan of Reorganization (Healtheon Corp)
Conduct Prior to the Effective Time. 5.1 Conduct of the Business by Company, Indirect Parent, Second Intermediary -------------------------------------------------------------------- Parent, First Intermediary Parent and Parent. During the period from the date -------------------------------------------- of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, Indirect Parent, Second Intermediary Parent, First Intermediary Parent and Parent shall cause the Company to and the Company shall, except to the extent that Purchaser shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), carry on its business, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulations, pay its debts and taxes when due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has significant business dealingsCompany. In addition, except as permitted by the terms of this Agreement, and the transactions contemplated hereby, without the prior written consent of Purchaser, during the period from From the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its the terms hereof or the Effective TimeTime (the “Interim Period”), neither Indirect Parent, Second Intermediary Parent, First Intermediary Parent nor Parent shall permit the Company shall cause the Business to be conducted in the ordinary course of business, consistent with past practices and in material compliance with all applicable Laws and shall use all commercially reasonable efforts to keep intact the Business, keep available the services of their current officers and employees and preserve their relationships with Payors, customers, suppliers, lessors, licensors, licensees, distributors and others with whom they deal to the end that the Business shall be unimpaired at the Closing. The Company shall not take any action that would, or that would reasonably be expected to, result in any of the conditions to the Transactions set forth in Article VII not being satisfied. In addition (and without limiting the generality of the foregoing), and other than as expressly contemplated by this Agreement or other than expressly set forth on Section 5.1 of the Disclosure Schedule, during the Interim Period, the Company shall not do any of the following:following without the prior written consent of the Parent (such consent not to be unreasonably withheld, conditioned or delayed):
(ai) With respect to Indirect Parent, Second Intermediary Parent, First Intermediary Parent amend its certificate of formation or Parent, waive any stock repurchase rights, accelerate, amend operating agreement (or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans to any employee, consultant or director of the Company, except as provided for under this Agreement or the attached exhibitscomparable documents);
(bii) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing or made available to Purchaser, or adopt any new severance plan, or amend or modify or alter in any manner any severance plan, agreement or arrangement existing on the date hereof or hire any new employees or consultants;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify any rights to the Company Intellectual Property, or enter into grants to transfer or license to any person future patent rights;
(d) Declaredeclare, set aside aside, make or pay any dividends on dividend or make any other distributions (whether distribution payable in cash, stockequity, property or otherwise, with respect to its ownership interests;
(iii) redeem or otherwise acquire directly or indirectly any equity securities or propertydebt interests or any Convertible Securities or authorize, issue or sell any equity or debt interests or any Convertible Securities;
(iv) adopt, amend or terminate any Benefit Plan (or any plan that would be a Benefit Plan if adopted) or enter into, adopt, extend, renew, amend or terminate any collective bargaining agreement or other Contract with any works council or labor organization, union or association, except in respect of any capital stock or each case as required by Law;
(v) (A) split, combine or reclassify any capital stock of the Company’s equity interests (including through the declaration or payment of an in-kind dividend) or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock the Company’s equity interests or any of their other securities (except as otherwise permitted by this Agreement) or (B) purchase or redeem any securities of the Company;
(fvi) Issuecreate any new Subsidiary, deliverenter into any joint venture or partnership with any other Person or acquire the securities of, sellor invest in, authorizeany other Person;
(vii) make, pledge accrue or otherwise encumber become liable for any bonus, profit sharing, deferred compensation or propose incentive payment, except for accruals under existing plans, if any, or increase the rate of compensation payable or to become payable by it to any of its officers, directors or employees, other than in the foregoing ordinary course of business consistent with past practices;
(viii) increase any compensation or benefits of, or pay or agree to pay any benefit (including, but not limited to, severance or termination pay), or make any award or grant under any Benefit Plan to any present or former managers, directors, officers or employees, other than in the ordinary course of business consistent with past practices, or negotiate or enter into any collective bargaining agreement, or make any commitment with respect to collective bargaining or recognition of any shares labor organization or bargaining unit or hire or terminate the employment of any executive officer or management-level employee (other than termination due to employee neglect or misconduct);
(ix) create, incur or assume any Indebtedness (including obligations in respect of capital stockleases) or guarantee any such Indebtedness, other than in the ordinary course of business consistent with past practices;
(x) permit, allow or suffer any of its assets or properties to become subjected to any Lien of any nature whatsoever, other than Permitted Liens;
(xi) enter into any Contract that would have been required to be set forth on Section 2.11(a) of the Disclosure Schedule if it were in effect on the date hereof, or modify, amend, voluntarily terminate or grant any Consent or waiver under any Contract that is set forth or required to be set forth on Section 2.11(a) of the Disclosure Schedule or that would have been required to be set forth on Section 2.11(a) of the Disclosure Schedule if it were in effect on the date hereof, in any case other than in the ordinary course of business consistent with past practices;
(xii) except as noted in Section 5.1(xii) of the Disclosure Schedule, cancel any Indebtedness or settle, compromise, discharge, waive, release or assign any material claim, right or Proceeding, other than in the ordinary course of business consistent with past practices;
(xiii) pay, loan or advance any amount to, or sell, transfer or lease any of its assets to, or enter into any agreement or arrangement with, InnoHold or any of its Related Persons (other agreements or commitments than in the ordinary course of any character obligating it to issue any such sharesbusiness consistent with past practices in connection with reasonable, out-of-pocket expenses);
(gxiv) Causemake any change in any method of accounting or accounting practices or policy other than as required by changes in Law or GAAP that become effective after the date hereof, permit or propose any amendments to other than in the Company Charter Documentsordinary course of business;
(hxv) Acquire make any material change in internal accounting controls;
(xvi) prepare or agree file any Tax Return inconsistent with past practices or, on any such Tax Return, take any position, make any election, or adopt any method or period that is inconsistent with positions taken, elections made or methods or periods used in preparing or filing similar Tax Returns in prior periods (including positions, elections, methods or periods that would have the effect of deferring income to periods ending after the Closing Date or accelerating deductions to periods ending on or before the Closing Date), file any amended Tax Return, extend any limitation period applicable to a Tax liability, initiate a voluntary disclosure to a Taxing authority, enter into or amend a Tax indemnification arrangement, settle or otherwise compromise any claim relating to Taxes or Tax benefits, enter into any closing agreement or similar agreement relating to Taxes or Tax benefits, otherwise settle any dispute relating to Taxes or Tax benefits, request any ruling or similar guidance with respect to Taxes or Tax benefits, or take other similar actions relating to Taxes;
(xvii) acquire any assets that are material or acquire by merging or consolidating with, or by purchasing any equity interest in or a substantial portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereofthereof or otherwise, or otherwise acquire or agree to enter into any joint ventures, strategic partnerships or alliances;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory other than in the ordinary course of business consistent with past practicepractices;
(jxviii) Incur make or incur any indebtedness for borrowed money capital expenditure outside the ordinary course of business or guarantee which exceeds $5,000,000 individually or in the aggregate with respect to any such indebtedness series of another persongroup or related capital expenditures;
(xix) pledge or encumber, issue sell, assign, lease, license, abandon, dedicate to the public, permit to lapse, dispose of or sell otherwise transfer any debt securities of its assets, except assets that individually or options, warrants, calls or other rights to acquire any debt securities of Company, in the aggregate are not material;
(xx) enter into any "keep well" contract, understanding or other agreement to maintain any financial statement condition commitment that materially restrains, restricts, limits or enter into any arrangement having impedes the economic effect of any ability of the foregoing other than Company to compete with any Person in connection with any line of business or in any geographical area or to conduct any business in any way in any geographic area or solicit the financing employment of ordinary course trade payables by Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parenthire any person;
(kxxi) Adopt modify, amend, terminate or amend cancel (A) any material employee policy Top Payor Contract or arrangementTop Vendor Contract, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice practices or (B) the Amended EdiZONE Agreement;
(xxii) default, breach or suffer to exist any event or condition which with employees who are terminable "at will"), pay the lapse of notice or time or both could constitute a material default or breach under any special bonus or special remuneration Company Contract;
(xxiii) make any sales to any director Payors or employeecustomer under conditions as to prices, ordiscounts, except rebates, returns, or payment terms that are not consistent in any material respect with generally applied past practices with such Payor or customer or for new Payors or customers purchasing similar services (in each case, other than in the ordinary course of business consistent with past practice, increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultantspractices);
(ixxiv) pay, discharge, settle accelerate the collection of any trade receivables or satisfy delay the payment of trade payables or any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), or litigation (whether or not commenced prior to the date of this Agreement) other liability other than the payment, discharge, settlement or satisfaction, in the ordinary course of business consistent with past practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company as provided to the Purchasers or incurred since the date of such financial statements, or (ii) waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any confidentiality or similar agreement to which Company is a party or of which Company is a beneficiarypractices;
(mxxv) Make pay or agree to pay any individual management charge to InnoHold or series of related payments outside of the ordinary course of business incur any other liability to InnoHold or enter into any agreement with InnoHold (in excess of $10,000;
(n) Except each case, other than in the ordinary course of business consistent with past practice, modify, amend or terminate any Material Contract or agreement to which Company is a party or waive, delay the exercise of, release or assign any material rights or claims thereunderpractices);
(oxxvi) Enter intocommence or threaten to commence legal or arbitration proceedings, renew or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company other than renewals in the ordinary course of existing nonexclusive contracts, agreements or obligations;
(p) Except as required by GAAP, revalue any of its assets or make any change in accounting methods, principles or practices;
(q) Incur or enter into any agreement, contract or commitment requiring Company to pay in excess of $10,000, excluding routine purchase orders business consistent with past practices;
(rxxvii) Settle do or omit to do anything which prejudices any material litigationright of the Company to the Company Intellectual Property (in each case, other than in the ordinary course of business consistent with past practices);
(sxxviii) Make or change any election in respect decrease the inventory levels maintained by the Company, outside the ordinary course of Taxesthe Company’s business, adopt or change any accounting method in respect taking into consideration (i) the dynamic growth of Taxes, file any Tax Returns or any amendment to any Tax Return other than in a manner consistent with prior the Company’s business and (ii) the Company’s evolving manufacturing challenges and practices, ;
(xxix) enter into any closing agreementlease of real property, settle except any claim or assessment renewals of existing leases in respects the ordinary course of Taxesbusiness consistent with past practices; or
(xxx) authorize any of, or consent commit or agree to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes;
(t) Agree take, whether in writing or otherwise otherwise, to take do any of of, the actions described in Section 5.1(a) through (s) aboveforegoing actions.
Appears in 1 contract
Samples: Merger Agreement (Global Partner Acquisition Corp.)
Conduct Prior to the Effective Time. 5.1 4.1 Conduct of Business by the Company. Except as expressly permitted by this Section 4.1 or required by the terms of this Agreement, Indirect and except as provided in Section 4.1 of the Company Schedule, without the prior written consent of Parent, Second Intermediary -------------------------------------------------------------------- Parent, First Intermediary Parent and Parent. During during the period from the date -------------------------------------------- of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, Indirect Parent, Second Intermediary Parent, First Intermediary Parent and Parent shall cause the Company to and the Company shall, except to the extent that Purchaser shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), carry on its business, in the usual, regular and ordinary course, in substantially the same manner as heretofore previously conducted and in material compliance with all applicable laws and regulations, pay its material debts and taxes when due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has significant business dealings. In addition, except as expressly permitted or contemplated by the terms of this Agreement, and except as provided in Section 4.1 of the transactions contemplated herebyCompany Schedule, without the prior written consent of PurchaserParent, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, neither Indirect Parent, Second Intermediary Parent, First Intermediary Parent nor Parent shall permit the Company to, and Company shall not do any of the following:
(a) With respect to Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parent, waive Waive any stock repurchase rights, accelerateaccelerate (except in connection with the termination of the Company Option Plan), amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans to any employee, consultant or director of the Company, except as provided for under this Agreement or the attached exhibitsplans;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing or made available to PurchaserParent, or adopt any new severance plan, or amend or modify or alter in any manner any severance plan, agreement or arrangement existing on the date hereof or hire any new employees or consultants;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify any rights to the Company Intellectual Property, or enter into grants to transfer or license to any person future patent rights;
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company, except repurchases of unvested shares at cost in connection with the termination of the employment relationship with any employee pursuant to stock option or purchase agreements in effect on the date hereof or granted hereafter;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of capital stock or propose any securities convertible into shares of the foregoing with respect capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such sharesshares or convertible securities, other than: (x) the issuance, delivery and/or sale of shares of Company Common Stock pursuant to the exercise of Company Stock Options or Company Warrants outstanding as of the date of this Agreement or granted pursuant to clause (y) hereof; and (y) the granting of stock options to purchase up to seventy-five thousand (75,000) shares in the aggregate (and the issuance of Company Common Stock upon exercise thereof), in the ordinary course of business and consistent with past practices;
(g) Cause, permit or propose any amendments to the Company Charter Documents;
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to acquire any assets (other than in the ordinary course of business) or enter into any joint ventures, strategic partnerships or alliances;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory and the grant of end-user licenses in the ordinary course of business consistent with past practice, except for the sale, lease or disposition (other than through licensing) of property or assets which are not material, individually or in the aggregate, to the business of the Company;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables by Indirect Parent, Second Intermediary Parent, First Intermediary Parent consistent with past practice or Parent(ii) in a principal amount not to exceed $150,000 in the aggregate;
(k) Adopt or amend any material employee benefit plan, policy or arrangement, any employee stock purchase or employee stock option plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director or employee, or, or increase the salaries or wage rates (except for increases in the ordinary course of business consistent with past practice, increase the salaries or wage rates for non-officer employees) or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultants;
(i) pay, discharge, settle or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), ) or litigation (whether or not commenced prior to the date of this Agreement) ), other than the payment, discharge, settlement or satisfaction, in the ordinary course of business consistent with past practice or in accordance with their terms, or of liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of the Company as provided to included in the Purchasers Company SEC Reports or incurred since the date of such financial statements, or (ii) waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce (without resorting to litigation) any confidentiality or similar agreement to which the Company is a party or of which the Company is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business (including payments to financial, legal, accounting or other professional service advisors) in excess of $10,000100,000 per month (except that such limit shall be $500,000 for the first month following the execution of this Agreement and except that the $100,000 limit shall not apply to amounts owed to the Principal Shareholder or for legal services performed through the date of this Agreement);
(n) Except in the ordinary course of business consistent with past practice, materially modify, amend or terminate any Material Contract material contract or agreement to which the Company is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into, renew into or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by Company other than renewals of existing nonexclusive contracts, agreements or obligationsthe Company;
(p) Except as required by GAAP, revalue Revalue any of its assets or, except as required or permitted by GAAP, make any change in accounting methods, principles or practices;
(q) Incur or enter into any agreement, contract or commitment outside of the ordinary course of business requiring payments by the Company to pay in excess of $10,000, excluding routine purchase orders consistent with past practices100,000 individually;
(r) Settle Make any tax election that, individually or in the aggregate, is reasonably likely to adversely affect in any material litigation;respect the tax liability or tax attributes of the Company or settle or compromise any material income tax liability; provided, however, that nothing in this Section 4.1(r) or elsewhere in this Agreement shall prohibit the Company from selling state tax losses to the extent permitted by applicable taxing authorities.
(s) Make Amend or change terminate any election in respect of Taxes, adopt or change any accounting method in respect of Taxes, file any Tax Returns or any amendment to any Tax Return other than in a manner consistent with prior practices, enter into any closing agreement, settle any claim or assessment in respects of Taxes, or consent to any extension or waiver all of the limitation period applicable to any claim or assessment in respect of Taxes;Related Agreements; or
(t) Agree in writing or otherwise to take any of the actions described in Section 5.1(a4.1(a) through (sSection 4.1(s) above. In the event the Company shall request Parent to consent in writing to an action pursuant to this Section 4.1, Parent shall not unreasonably delay its determination as to whether to withhold such consent.
Appears in 1 contract
Samples: Merger Agreement (Visx Inc)
Conduct Prior to the Effective Time. SECTION 5.1 Conduct of Business by the Company, Indirect Parent, Second Intermediary -------------------------------------------------------------------- Parent, First Intermediary Parent and Parent. During the period from the date -------------------------------------------- of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Appointment Time, Indirect Parent, Second Intermediary Parent, First Intermediary Parent and Parent shall cause the Company to and the Company each of its subsidiaries shall, except to the extent that Purchaser Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed)writing, carry on its business, business in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted course consistent with past practice and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes Taxes when due subject to good faith disputes over such debts or taxesTaxes, pay or perform other material obligations when due, and use its commercially reasonable best efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, licensees and others with which it has significant business dealings. In addition, during that period the Company will promptly notify Parent of any material event involving its business or operations consistent with the agreements contained herein. In addition, except as permitted by the terms of this Agreement, the Transaction Option Agreement or the Stockholders' Agreements, and except as contemplated by this Agreement, the transactions contemplated herebyTransaction Option Agreement or the Stockholders' Agreements, without the prior written consent of Purchaser, Parent during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Appointment Time, neither Indirect Parent, Second Intermediary Parent, First Intermediary Parent nor Parent shall permit except as set forth in Section 5.1 of the Company toDisclosure Schedule, and the Company shall not do and shall not permit any of its subsidiaries to do any of the following:
(a) With respect to Indirect Parent, Second Intermediary Parent, First Intermediary Parent or ParentExcept as provided in this Agreement, waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans to any employee, consultant or director of the Company, except as provided for under this Agreement or the attached exhibitsplans;
(b) Grant any increase in compensation or fringe benefits, bonus or severance or termination pay to any director, officer or employee other than in the ordinary course of business, consistent with past practice, except pursuant to written agreements outstandingin effect, or policies existing, on the date hereof and (or as previously disclosed in writing or made available required by applicable law), copies of which have been provided to PurchaserParent, or adopt or enter into any new severance plan, plan or amend or modify or alter in any manner any severance plan, agreement or arrangement existing on the date hereof or hire any new employees or consultantsagreement;
(c) Transfer Enter into any licensing or other agreement with regard to the acquisition, distribution or licensing of any Intellectual Property, or transfer or license to any person or entity or otherwise extend, amend or modify any rights to the Company Intellectual Property, other than non-exclusive licenses, distribution or enter into grants to transfer or license to any person future patent rightsother similar agreements entered in the ordinary course of business consistent with past practice;
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock of the Company or split, combine or reclassify any capital stock of the Company or any subsidiary or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for for, any capital stockstock of the Company or any subsidiary;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Companythe Company or any of its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the employment relationship with any employee pursuant to stock option or purchase agreements in effect on the date hereof;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of capital stock or propose any securities convertible into shares of the foregoing with respect capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such sharesshares or convertible securities, other than the issuance, delivery and/or sale of (i) shares of Company Common Stock pursuant to the exercise of outstanding Company Options, and (ii) pursuant to grants of Company Options to newly hired employees in the ordinary course of business consistent with past practice and in accordance with the terms and conditions of the Company Option Plan pursuant to which such Company Option was granted;
(g) Cause, Cause or permit or propose any amendments to the Company Charter Documents;
(h) Acquire or agree to acquire by merging or consolidating with, or or, by purchasing any equity interest in or a portion of the assets (outside the ordinary course of business) of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, ; or otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or any subsidiary or enter into any material joint ventures, partnerships, strategic partnerships relationships or alliances;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory the Company or of any subsidiary other than sales, leases, licenses, or encumbrances of assets or properties in the ordinary course of business consistent with past practice;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Companythe Company or any subsidiary, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing foregoing, other than in connection with the financing of ordinary course trade payables by Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parentof business consistent with past practice;
(k) Make any loan, advance or capital contribution to or investment in any person, other than in the ordinary course of business consistent with past practice;
(l) Create or assume any Encumbrance on any assets of the Company or any of its subsidiaries, other than Encumbrances that do not materially detract from the value of such assets or materially impair the use thereof by the Company or its subsidiaries;
(m) Adopt or amend (except as required by law) any material employee policy benefit plan or arrangementemployee stock purchase or employee stock option plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will")agreement, pay any special bonus or special remuneration to any director or employee, or change any management policies or procedures;
(n) Make any material capital expenditures, except in accordance with the current Company annual budget and plan, as previously disclosed to Parent;
(o) Modify, amend or terminate any Material Contract to which the Company or any of the Company's subsidiaries is a party or waive, release or assign any material rights or claims thereunder or enter into any contract that would be deemed a Material Contract had it existed on the date hereof;
(p) Revalue any of the Company's or any of its subsidiaries' assets or, except as required by GAAP, make any change in accounting methods, principles or practices;
(q) Extend, amend or modify the terms of, or any rights to, any Intellectual Property, including the pricing, policy or practice for any license of software of the Company or of any subsidiary to a third party, such as through discounts or similar practices, lengthening the term of any license or changing the standard basis of pricing other than in the ordinary course of business business, consistent with past practice, increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultants;
(ir) payPay, discharge, settle discharge or satisfy any claimsclaims (including claims of stockholders), indebtedness, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), except for payments, discharges or litigation (whether satisfactions of liabilities, indebtedness or not commenced prior to the date of this Agreement) other than the payment, discharge, settlement or satisfaction, obligations in the ordinary course of business consistent with past practice or in accordance with their terms, or liabilities recognized or disclosed terms as in the most recent consolidated financial statements (or the notes thereto) of Company as provided to the Purchasers or incurred since effect on the date of such financial statements, or (ii) waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any confidentiality or similar agreement to which Company is a party or of which Company is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business in excess of $10,000;
(n) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any Material Contract or agreement to which Company is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into, renew or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company other than renewals of existing nonexclusive contracts, agreements or obligations;
(p) Except as required by GAAP, revalue any of its assets or make any change in accounting methods, principles or practices;
(q) Incur or enter into any agreement, contract or commitment requiring Company to pay in excess of $10,000, excluding routine purchase orders consistent with past practices;
(r) Settle any material litigationhereof;
(s) Make Adopt a plan of complete or change any election in respect of Taxespartial liquidation or resolutions providing for or authorizing such a liquidation or a dissolution, adopt merger, consolidation, restructuring, recapitalization or change any accounting method in respect of Taxes, file any Tax Returns or any amendment to any Tax Return other than in a manner consistent with prior practices, enter into any closing agreement, settle any claim or assessment in respects of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxesreorganization (except as contemplated by this Agreement);
(t) Settle or compromise any litigation (whether or not commenced prior to the date of this Agreement), other than settlements or compromises of litigation that do not provide for injunctive or similar relief and where the amount paid (after giving effect to insurance proceeds actually received) in settlement or compromise does not exceed $25,000, provided that the aggregate amount paid in connection with the settlement or compromise of all such litigation matters shall not exceed $50,000;
(u) Amend any term of any outstanding security of the Company or any of its subsidiaries;
(v) Make any material Tax election inconsistent with past practices or settle or compromise any material Federal, state, local or foreign Tax liability or agree to an extension of a statute of limitations for any assessment of any Tax;
(w) Take any action that would materially delay the consummation of the transactions contemplated hereby or, except to the extent permitted by this Section 5.1, make any of the representations and warranties untrue or incorrect in any material respect; or
(x) Agree in writing or otherwise to take (or permit any of its subsidiaries to agree in writing or otherwise to take) any of the actions described in Section 5.1(a5.1 (a) through (sw) above.
Appears in 1 contract
Samples: Merger Agreement (Autologic Information International Inc)
Conduct Prior to the Effective Time. 5.1 4.1 Conduct of Business by the Company, Indirect Parent, Second Intermediary -------------------------------------------------------------------- Parent, First Intermediary Parent and Parent. During the period from the date -------------------------------------------- of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, Indirect Parent, Second Intermediary Parent, First Intermediary Parent and Parent shall cause the Company to and the Company each of its subsidiaries shall, except to the extent that Purchaser Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed)writing, carry on its business, in all material respects, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulations, pay its debts and taxes when due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when duedue subject to good faith disputes over such obligations, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has significant business dealings. In addition, except as permitted by the terms of this Agreement, and except as provided in Article 4 of the transactions contemplated herebyCompany Schedules, without the prior written consent of PurchaserParent, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, neither Indirect Parent, Second Intermediary Parent, First Intermediary Parent nor Parent shall permit the Company to, and Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) With respect Except for the acceleration of the vesting of stock options pursuant to Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parentpre-existing contractual arrangement as set forth in Part 2.2(b) of the Company Schedules, waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans to any employee, consultant or director of the Company, except as provided for under this Agreement or the attached exhibitsplans;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing or made available to PurchaserParent, or adopt any new severance plan, or amend or modify or alter in any manner any severance plan, agreement or arrangement existing on the date hereof or hire any new employees or consultants;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to transfer or license to any person future patent rights, other than non-exclusive licenses in the ordinary course of business and consistent with past practice;
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Companythe Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the employment relationship with any employee pursuant to stock option or purchase agreements in effect on January 20, 2000;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber encumber, any shares of capital stock or propose any securities convertible into shares of the foregoing with respect capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such sharesshares or convertible securities, other than (i) stock options pursuant to the Company Stock Option Plans granted to employees of the Company to purchase 1,200,000 shares (as appropriately adjusted for stock splits and the like) of Company Common Stock with strike prices equal to the fair market value of the Company Common Stock at the time of grant and otherwise with vesting schedules and other terms subject to Section 5; (ii) issuance of shares of the Company Common Stock in connection with the prior acquisitions of the Company, as set forth in Part 4.1 of the Company Schedules; and (iii) issuance of shares by the Company Common Stock pursuant to the exercise of stock options therefor outstanding as of January 20, 2000 or granted pursuant to the preceding clause (i);
(g) Cause, permit or propose any amendments to its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries) except to the Company Charter Documentsextent required to comply with the Company's obligations hereunder, required by law or required by the rules and regulations of Nasdaq;
(h) Acquire Except as set forth on Part 4.1 of the Company Schedules and except for the acquisition of Question Exchange, Inc. pursuant to the terms of a certain Agreement and Plan of Merger dated January 27, 2000, acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any material joint ventures, strategic partnerships or alliances;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory and used equipment in the ordinary course of business consistent with past practice;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than in connection with the financing of ordinary course trade payables by Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parentconsistent with past practice;
(k) Adopt or amend any material employee policy benefit plan or arrangementemployee stock purchase or employee stock option plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director or employee, or, except in the ordinary course of business consistent with past practice, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultantsconsultants other than in the ordinary course of business, consistent with past practice, or change in any material respect any management policies or procedures;
(il) payExcept for payments made in connection with the acquisition of Question Exchange, dischargeInc., settle or satisfy make any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), or litigation (whether or not commenced prior to the date payments outside of this Agreement) other than the payment, discharge, settlement or satisfaction, in the ordinary course of business consistent with past practice practices in excess of $50,000 individually or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company as provided to the Purchasers or incurred since the date of such financial statements, or (ii) waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any confidentiality or similar agreement to which Company is a party or of which Company is a beneficiaryaggregate;
(m) Make any individual or series of related payments outside of the ordinary course of business in excess of $10,000;
(n) Except in the ordinary course of business consistent with past practice, modifyModify, amend or terminate any Material Company Contract or other material contract or agreement to which the Company or any subsidiary thereof is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(on) Enter into, renew or materially modify into any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company other than renewals in the ordinary course of existing nonexclusive contracts, agreements or obligationsbusiness consistent with past practice;
(po) Except Materially revalue any of its assets or, except as required by GAAP, revalue any of its assets or make any change in accounting methods, principles or practices;
(qp) Incur or enter into Take any agreement, contract or commitment requiring Company action that could reasonably be expected to pay in excess cause the Merger to fail to qualify as a "reorganization" under Section 368(a) of $10,000, excluding routine purchase orders consistent with past practices;the Code; or
(r) Settle any material litigation;
(s) Make or change any election in respect of Taxes, adopt or change any accounting method in respect of Taxes, file any Tax Returns or any amendment to any Tax Return other than in a manner consistent with prior practices, enter into any closing agreement, settle any claim or assessment in respects of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes;
(tq) Agree in writing or otherwise to take any of the actions described in Section 5.1(a(a) through (sp) above.
Appears in 1 contract
Samples: Agreement and Plan of Reorganization (Va Linux Systems Inc)
Conduct Prior to the Effective Time. 5.1 4.1 Conduct of Business by Company, Indirect Parent, Second Intermediary -------------------------------------------------------------------- Parent, First Intermediary Parent and Parentthe Business; Notices. During the period from the date -------------------------------------------- of this Agreement Date and continuing until the earlier of the termination of this Agreement pursuant to in accordance with its terms or and the Effective TimeTime (the “Pre-Closing Period”) (except (i) as required or otherwise expressly contemplated under this Agreement or as required by Applicable Law (provided that the Company shall to the extent reasonably practicable and permitted by Applicable Law, Indirect Parent, Second Intermediary Parent, First Intermediary Parent and Parent shall cause notify Acquirer at least two (2) Business Days in advance of any action proposed to be taken by the Company to and comply with Applicable Law that would otherwise not be permitted under the provisions of this Section 4.1) or (ii) with the written consent of Acquirer) the Company shall, except to and shall cause each Subsidiary to:
(a) conduct the extent that Purchaser shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), carry on its business, Business in the usual, regular and ordinary course, course in substantially the same manner as heretofore conducted (except to the extent expressly provided otherwise herein or as consented to in writing by Acquirer) and in compliance with Applicable Law;
(b) use commercially reasonable efforts to pay all applicable laws material Company Debt and regulationsmaterial Company Taxes when due, pay its debts and taxes when due subject to good faith disputes dispute over such debts material Company Debt or taxesmaterial Taxes;
(c) promptly notify Acquirer of (i) the receipt of any notice from any Person alleging that the consent of such Person is or may be required in connection with any of the Transactions and (ii) any Legal Proceeding commenced, pay or, to the knowledge of the Company, threatened in writing, relating to or perform other material obligations when due, and involving the Company or any of the Subsidiaries that relates to the consummation of the Transactions;
(d) use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organizationorganizations, (ii) keep available the services of its present officers and employees Key Employees and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, licensees and others having material business dealings with which it has significant business dealings. In addition, except as permitted by the terms of this Agreement, and the transactions contemplated hereby, without the prior written consent of Purchaser, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, neither Indirect Parent, Second Intermediary Parent, First Intermediary Parent nor Parent shall permit the Company to, and Company shall not do any of the following:
(a) With respect to Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parent, waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans to any employee, consultant or director of the Company, except as provided for under this Agreement or the attached exhibits;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing or made available to Purchaser, or adopt any new severance plan, or amend or modify or alter in any manner any severance plan, agreement or arrangement existing on the date hereof or hire any new employees or consultants;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify any rights to the Company Intellectual Property, or enter into grants to transfer or license to any person future patent rights;
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stockit;
(e) Purchaseuse commercially reasonable efforts to assure that each of its Contracts that would have, redeem if entered into prior to the Agreement Date, constituted Material Contracts entered into after the Agreement Date will not require the procurement of any consent, waiver or otherwise acquirenovation or provide for any material change in the obligations of any party thereto in connection with, directly or indirectlyterminate as a result of the consummation of, the Merger or the other Transactions, and shall give reasonable advance notice to Acquirer prior to allowing any shares of capital stock of Companysuch Material Contract or right thereunder to lapse or terminate by its terms;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber or propose any use commercially reasonable efforts to maintain all real property leased in accordance with the terms of the foregoing with respect to any shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such sharesapplicable lease in all material respects;
(g) Cause, permit promptly notify Acquirer of any notice or propose other communication from any amendments Governmental Entity (i) relating to the Transactions, (ii) indicating that a Company Charter DocumentsAuthorization has been or is about to be revoked or (iii) indicating that a Company Authorization is required in any jurisdiction in which such Company Authorization has not been obtained, which revocation or failure to obtain has had or would reasonably be expected to be material to Acquirer (following the Effective Time) or the Company;
(h) Acquire or agree to acquire by merging or consolidating withpromptly, or by purchasing upon becoming aware, notify Acquirer of any equity interest inaccuracy in or a portion breach of any representation, warranty or covenant of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to enter into any joint ventures, strategic partnerships or alliances;Company herein; and
(i) Sellto the extent not otherwise required by this Section 4.1, lease, license, encumber or otherwise dispose promptly notify Acquirer of any properties change, occurrence or assets except sales of inventory event not in the ordinary course of business consistent business, or of any change, occurrence or event that, individually or in the aggregate with past practice;
(j) Incur any indebtedness for borrowed money other changes, occurrences and events, would reasonably be expected to be materially adverse to the Company or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of cause any of the foregoing other than conditions to the Closing set forth in connection with the financing of ordinary course trade payables by Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parent;
(k) Adopt or amend any material employee policy or arrangement, or enter into any employment contract or collective bargaining agreement (other than offer letters Article VI not to be satisfied. The parties acknowledge and letter agreements entered into agree that in the ordinary course failure to perform any covenant set forth in this Section 4.1, the underlying claim or the determination of business consistent the conditions to the Closing set forth in the first sentence of Section 6.3(a) for the underlying matter as to which notice should have been delivered shall be made by reference to the applicable provision of this Agreement with past practice with employees who are terminable "at will"), pay any special bonus respect to such matter and not as a breach of a covenant in this Section 4.1; claims or special remuneration the determination of the conditions to any director the Closing set forth in the first sentence of Section 6.3(a) for breach of the obligations to make the notice required by this Section 4.1 may be made by reference to this Section 4.1.
4.2 Restrictions on Conduct of the Business. Without limiting the generality or employee, oreffect of Section 4.1, except as expressly set forth on Schedule 4.2 of the Company Disclosure Letter, during the Pre-Closing Period, the Company shall not do, cause or permit (and shall cause each Subsidiary not to do, cause or permit) any of the following (except (x) as required by Applicable Law, (y) to the extent expressly provided otherwise herein or as consented to in the ordinary course of business consistent with past practice, increase the salaries or wage rates or fringe benefits writing by Acquirer (including rights which shall be deemed to severance or indemnificationhave been granted if such request is delivered to Acquirer and Acquirer has not responded within five (5) of its directors, officers, employees or consultants;
(i) pay, discharge, settle or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwiseBusiness Days)), or litigation (whether or not commenced prior to the date z) as set forth on a subsection of this Agreement) other than the payment, discharge, settlement or satisfaction, in the ordinary course of business consistent with past practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company as provided to the Purchasers or incurred since the date of such financial statements, or (ii) waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any confidentiality or similar agreement to which Company is a party or of which Company is a beneficiary;
(m) Make any individual or series of related payments outside Schedule 4.2 of the ordinary course of business in excess of $10,000;
(n) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any Material Contract or agreement to which Company is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into, renew or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company other than renewals of existing nonexclusive contracts, agreements or obligations;
(p) Except as required by GAAP, revalue any of its assets or make any change in accounting methods, principles or practices;
(q) Incur or enter into any agreement, contract or commitment requiring Company to pay in excess of $10,000, excluding routine purchase orders consistent with past practices;
(r) Settle any material litigation;
(s) Make or change any election in respect of Taxes, adopt or change any accounting method in respect of Taxes, file any Tax Returns or any amendment to any Tax Return other than in a manner consistent with prior practices, enter into any closing agreement, settle any claim or assessment in respects of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes;
(t) Agree in writing or otherwise to take any of the actions described in Section 5.1(a) through (s) above.Disclosure Letter:
Appears in 1 contract
Samples: Merger Agreement
Conduct Prior to the Effective Time. 5.1 4.1 Conduct of Business by Company, Indirect Parent, Second Intermediary -------------------------------------------------------------------- Parent, First Intermediary Parent and Parentof JDA. During the period from the date -------------------------------------------- of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, Indirect Parent, Second Intermediary Parent, First Intermediary Parent and Parent shall cause the Company to and the Company shall, except to the extent that Purchaser shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), carry on its business, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulations, pay its debts and taxes when due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has significant business dealings. In addition, except as permitted by the terms of this Agreement, and the transactions contemplated hereby, without the prior written consent of Purchaser, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, neither Indirect ParentJDA agrees (except to the extent that BESC shall otherwise consent in writing), Second Intermediary Parentto carry on its business in substantially the same manner as described in the Business Plan and, First Intermediary Parent nor Parent shall permit to the Company toextent consistent with such business, use all reasonable efforts to preserve intact JDA's present business organizations, keep available the services of its present officers and key employees and preserve their relationships with, suppliers, licensors, licensees, and Company others having business dealings with it, to the end that JDA's goodwill and ongoing businesses shall not do be unimpaired at the Effective Time. JDA shall promptly notify BESC of any event or occurrence or emergency and any event which could, in the reasonable judgment of JDA, have a Material Adverse Effect on JDA. Except as expressly contemplated by this Agreement or set forth in Schedule 4.1, JDA shall not, without the followingprior written consent of BESC:
(a) With respect to Indirect ParentIssue, Second Intermediary Parentdeliver or sell or authorize or propose the issuance, First Intermediary Parent delivery or Parentsale of, waive or purchase or propose the purchase of, any shares of its capital stock repurchase or securities convertible into, or subscriptions, rights, acceleratewarrants or options to acquire, amend or change other agreements or commitments of any character obligating it to issue any such shares or other convertible securities except for the period issuance of exercisability shares of capital stock upon exercise of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans to any employee, consultant or director of outstanding on the Company, except as provided for under this Agreement or the attached exhibitsdate hereof;
(b) Enter into any commitment or transaction not in the ordinary course of business (i) to be performed over a period longer than six (6) months in duration, or (ii) to purchase fixed assets for a purchase price in excess of $1,000;
(c) Grant any severance or termination pay to any officer director or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing or made available to Purchaser, or adopt any new severance plan, or amend or modify or alter in any manner any severance plan, agreement or arrangement existing on the date hereof or hire any new employees or consultantsemployee;
(cd) Transfer or license to any person or entity any rights to JDA's Intellectual Property;
(e) Enter into or otherwise extendamend any agreements pursuant to which any other party is granted exclusive marketing or other rights of any type or scope with respect to any products of JDA;
(f) Violate, amend or otherwise modify the terms of any rights of the contracts or agreements required to the Company Intellectual Property, or enter into grants to transfer or license to any person future patent rightsbe set forth in JDA Schedules;
(dg) Declare, set aside Commence any litigation;
(h) Declare or pay any dividends on or make any other distributions (whether in cash, stock, equity securities stock or property) in respect of any of its capital stock stock, or 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 any shares of capital stock;
(e) Purchasestock of JDA, redeem or repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock except from former employees, directors and consultants in accordance with agreements, copies of Companywhich have been furnished to BESC's counsel, providing for the repurchase of shares at cost in connection with any termination of service to JDA;
(fi) Issue, deliver, sell, authorize, pledge Cause or otherwise encumber permit any amendments to its Articles of Incorporation or propose any of the foregoing with respect to any shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such sharesBylaws;
(g) Cause, permit or propose any amendments to the Company Charter Documents;
(hj) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a substantial portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to enter into acquire any joint venturesassets which are material, strategic partnerships individually or alliancesin the aggregate, to the business of JDA;
(ik) Sell, lease, license, encumber license or otherwise dispose of any of its properties or assets which are material, individually or in the aggregate, to the business of JDA, except sales of inventory in the ordinary course of business consistent with past practicebusiness;
(jl) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, or issue or sell any debt securities of JDA or options, warrants, calls or other rights to acquire guarantee any debt securities of Company, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than in connection with the financing of ordinary course trade payables by Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parentothers;
(km) Adopt or amend any material employee policy or arrangementbenefit plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will")contract, pay any special bonus or special remuneration to any director or employee, or, except in the ordinary course of business consistent with past practice, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultantsemployees;
(in) payRevalue any of its assets, dischargeincluding without limitation writing down the value of inventory or writing off notes or accounts receivable other than in the ordinary course of business;
(o) Pay, settle discharge or satisfy in an amount in excess of $1,000 in any claimsone case any claim, liabilities liability or obligations obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), or litigation (whether or not commenced prior to the date of this Agreement) other than the payment, discharge, settlement discharge or satisfaction, satisfaction in the ordinary course of business consistent with past practice of liabilities reflected or reserved against in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements JDA Financial Statements (or the notes thereto) of Company as provided to the Purchasers or incurred since the date of such financial statements, or (ii) waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any confidentiality or similar agreement to which Company is a party or of which Company is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business in excess of $10,000;
(n) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any Material Contract or agreement to which Company is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into, renew or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company other than renewals of existing nonexclusive contracts, agreements or obligations);
(p) Except as required by GAAP, revalue any of its assets or make any change in accounting methods, principles or practices;
(q) Incur or enter into any agreement, contract or commitment requiring Company to pay in excess of $10,000, excluding routine purchase orders consistent with past practices;
(r) Settle any material litigation;
(s) Make or change any material election in respect of Taxes, adopt or change any accounting method in respect of Taxes, file any Tax Returns material Return or any amendment to any Tax Return other than in a manner consistent with prior practicesmaterial Return, enter into any closing agreement, settle any claim or assessment in respects respect of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes;; or
(tq) Agree Take, or agree in writing or otherwise to take take, any of the actions described in Section 5.1(aSections 4.1(a) through (sp) above, or any action which would make any of the representations or warranties or covenants of JDA contained in this Agreement materially untrue or incorrect.
Appears in 1 contract
Conduct Prior to the Effective Time. 5.1 4.1 Conduct of Business by of the Company, Indirect Parent, Second Intermediary -------------------------------------------------------------------- Parent, First Intermediary Parent and Parent. During the period from the date -------------------------------------------- of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or and the Effective Time, Indirect Parent, Second Intermediary Parent, First Intermediary Parent and the Company agrees (unless the Company is required to take such action pursuant to this Agreement or Parent shall cause the Company to and the Company shall, except to the extent that Purchaser shall otherwise give its prior consent in writing (which consent shall not be unreasonably withheld or delayed), withheld) to carry on its business in the Company's Ordinary Course of Business and in any event substantially consistent with the Operating Plan provided prior to the date of this Agreement to Parent; any material deviations from, or material modifications to, the Operating Plan shall be required to be approved in advance by Parent), to pay its Liabilities and Taxes consistent with the Company's Ordinary Course of Business, to perform other obligations when due consistent with the Company's Ordinary Course of Business (other than Liabilities, Taxes and other obligations, if any, contested in good faith through appropriate proceedings or as set forth in Section 4.1 of the Company Disclosure Schedule), and, to the extent consistent with such business, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance with to use all applicable laws and regulations, pay its debts and taxes when due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, and use its commercially reasonable efforts consistent with past practices and institute all policies reasonably required to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and key employees and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, independent contractors and others other Persons having business dealings with which it has significant business dealingsit, all with the express purpose and intent of preserving unimpaired its goodwill and ongoing businesses at the Effective Time. In addition, except Except as permitted expressly contemplated by the terms of this Agreement, and the transactions contemplated herebyCompany shall not, without the prior written consent of PurchaserParent, take or agree in writing or otherwise to take, any action that would make any of its representations or warranties contained in this Agreement untrue or incorrect in any material respect or prevent the Company from performing or cause the Company not to perform its agreements and covenants hereunder or knowingly cause any condition to Parent's closing obligations in Section 6.1 or Section 6.3 not to be satisfied. Without limiting the generality of the foregoing, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, neither Indirect Parent, Second Intermediary Parent, First Intermediary Parent nor Parent shall permit except as set forth in the Company toDisclosure Schedule or as required or expressly permitted by this Agreement, and the Company shall not do do, cause or permit any of the following, without the prior written consent of Parent:
(a) With respect to Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parent, waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans to any employee, consultant or director of the Company, except as provided for under this Agreement or the attached exhibits;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing or made available to Purchaser, or adopt any new severance plan, or amend or modify or alter in any manner any severance plan, agreement or arrangement existing on the date hereof or hire any new employees or consultants;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify any rights to the Company Intellectual Property, or enter into grants to transfer or license to any person future patent rights;
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber or propose any of the foregoing with respect to any shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares;
(g) Cause, permit or propose any amendments to the Company Charter Documents;
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to enter into any joint ventures, strategic partnerships or alliances;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory in the ordinary course of business consistent with past practice;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than in connection with the financing of ordinary course trade payables by Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parent;
(k) Adopt or amend any material employee policy or arrangement, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director or employee, or, except in the ordinary course of business consistent with past practice, increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultants;
(i) pay, discharge, settle or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), or litigation (whether or not commenced prior to the date of this Agreement) other than the payment, discharge, settlement or satisfaction, in the ordinary course of business consistent with past practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company as provided to the Purchasers or incurred since the date of such financial statements, or (ii) waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any confidentiality or similar agreement to which Company is a party or of which Company is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business in excess of $10,000;
(n) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any Material Contract or agreement to which Company is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into, renew or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company other than renewals of existing nonexclusive contracts, agreements or obligations;
(p) Except as required by GAAP, revalue any of its assets or make any change in accounting methods, principles or practices;
(q) Incur or enter into any agreement, contract or commitment requiring Company to pay in excess of $10,000, excluding routine purchase orders consistent with past practices;
(r) Settle any material litigation;
(s) Make or change any election in respect of Taxes, adopt or change any accounting method in respect of Taxes, file any Tax Returns or any amendment to any Tax Return other than in a manner consistent with prior practices, enter into any closing agreement, settle any claim or assessment in respects of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes;
(t) Agree in writing or otherwise to take any of the actions described in Section 5.1(a) through (s) above.
Appears in 1 contract
Samples: Merger Agreement (Sonicblue Inc)
Conduct Prior to the Effective Time. 5.1 4.1 Conduct of Business by Company, Indirect Parent, Second Intermediary -------------------------------------------------------------------- Parent, First Intermediary Parent the Company and Parent. During the period from the date -------------------------------------------- of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective TimeClosing, Indirect Parenteach of the Company, Second Intermediary Parent, First Intermediary Parent and Parent shall cause the Company to and the Company Merger Sub shall, except to the extent that Purchaser the other party shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed)writing, carry on its business, business in the usual, regular and ordinary coursecourse consistent with past practices, in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulationsregulations (except where noncompliance would not have a Material Adverse Effect), pay its debts and taxes when due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve substantially intact its present business organization, (ii) keep available the services of its present officers and employees employees, (iii) maintain the historical level of each component of working capital and (iiiiv) preserve its relationships with customers, suppliers, distributors, licensors, licensees, employees, associates and others with which it has significant business dealings. In addition, except as required or permitted by the terms of this Agreement, and the transactions contemplated herebyAgreement or set forth in Schedule 4.1 hereto, without the prior written consent of Purchaserthe other party, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective TimeClosing, neither Indirect Parenteach of the Company, Second Intermediary Parent, First Intermediary Parent nor Parent shall permit the Company to, and Company Merger Sub shall not do any of the following:
(a) With respect to Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parent, waive Waive any stock repurchase rights, accelerate, amend or (except as specifically provided for herein) change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans to any employee, consultant or director of the Company, except as provided for under this Agreement or the attached exhibitsplans;
(b) Grant any severance or termination pay to any officer or employee except pursuant to applicable law, written agreements outstanding, or policies existing, existing on the date hereof and as previously or concurrently disclosed in writing or made available to Purchaserthe other party, or adopt any new severance plan, or amend or modify or alter in any manner any severance plan, agreement or arrangement existing on the date hereof or hire any new employees or consultantshereof;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify any material rights to any Intellectual Property of the Company Intellectual Propertyor Parent, as applicable, or enter into grants to transfer or license to any person future patent rights, other than in the ordinary course of business consistent with past practices provided that in no event shall the Company or Parent license on an exclusive basis or sell any Intellectual Property of the Company, or Parent as applicable;
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Companythe Company and Parent, as applicable, including repurchases of unvested shares at cost in connection with the termination of the relationship with any employee or consultant pursuant to agreements in effect on the date hereof;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber encumber, or propose agree to any of the foregoing with respect to, any shares of capital stock or any securities convertible into or exchangeable for shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into or exchangeable for shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such sharesshares or convertible or exchangeable securities;
(g) Cause, permit or propose any amendments to the Company Amend its Charter Documents;
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of Parent or the Company as applicable, or enter into any joint ventures, strategic partnerships or alliancesalliances or other arrangements that provide for exclusivity of territory or otherwise restrict such party's ability to compete or to offer or sell any products or services;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets assets, except (A) sales of inventory in the ordinary course of business consistent with past practice, and (B) the sale, lease or disposition (other than through licensing) of property or assets that are not material, individually or in the aggregate, to the business of such party;
(j) Incur Except with respect to advances under the Company's current credit facilities, incur any indebtedness for borrowed money in excess of $100,000 in the aggregate or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Parent or the Company, as applicable, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than in connection with the financing of ordinary course trade payables by Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parentforegoing;
(k) Adopt or amend any material employee benefit plan, policy or arrangement, any employee stock purchase or employee stock option plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director or employee, or, except in the ordinary course of business consistent with past practice, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultants, except in the ordinary course of business consistent with past practices;
(il) payPay, discharge, settle or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), or litigation (whether or not commenced prior to the date of this Agreement) other than the payment, discharge, settlement or satisfaction, in the ordinary course of business consistent with past practice practices or in accordance with their terms, or liabilities recognized or disclosed in the Unaudited Financial Statements or in the most recent consolidated financial statements (or included in the notes thereto) of Company as provided Parent SEC Reports filed prior to the Purchasers date of this Agreement, as applicable, or incurred since the date of such financial statements, or (ii) waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any confidentiality or similar agreement to which the Company is a party or of which the Company is a beneficiary or to which Parent is a party or of which Parent is a beneficiary, as applicable;
(m) Make any individual or series of related payments outside of the ordinary course of business in excess of $10,000;
(n) Except in the ordinary course of business consistent with past practicepractices, modify, amend or terminate any Material Company Contract or agreement to which Company is a party Parent Contract, as applicable, or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into, renew or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company other than renewals of existing nonexclusive contracts, agreements or obligations;
(pn) Except as required by U.S. GAAP, revalue any of its assets or make any change in accounting methods, principles or practices;
(qo) Incur Except in the ordinary course of business consistent with past practices, incur or enter into any agreement, contract or commitment requiring Company such party to pay in excess of $10,000, excluding routine purchase orders consistent with past practices100,000 in any 12 month period;
(p) Engage in any action that could reasonably be expected to cause the Merger to fail to qualify as a "reorganization" under Section 368(a) of the Code;
(q) Settle any litigation to which an Insider is a party or where the consideration given by the Company is other than monetary;
(r) Settle Make or rescind any Tax elections that, individually or in the aggregate, could be reasonably likely to adversely affect in any material litigationrespect the Tax liability or Tax attributes of such party, settle or compromise any material income tax liability or, except as required by applicable law, materially change any method of accounting for Tax purposes or prepare or file any Return in a manner inconsistent with past practice;
(s) Make Form, establish or change acquire any election in respect of Taxes, adopt or change any accounting method in respect of Taxes, file any Tax Returns or any amendment to any Tax Return other than in a manner consistent with prior practices, enter into any closing agreement, settle any claim or assessment in respects of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxessubsidiary except as contemplated by this Agreement;
(t) Permit any Person to exercise any of its discretionary rights under any Plan to provide for the automatic acceleration of any outstanding options, the termination of any outstanding repurchase rights or the termination of any cancellation rights issued pursuant to such plans;
(u) Make capital expenditures except in accordance with prudent business and operational practices consistent with prior practice;
(v) Make or omit to take any action which would be reasonably anticipated to have a Material Adverse Effect;
(w) Enter into any transaction with or distribute or advance any assets or property to any of its officers, directors, partners, stockholders or other affiliates other than the payment of salary and benefits in the ordinary course of business consistent with past practice; or
(x) Agree in writing or otherwise agree, commit or resolve to take any of the actions described in Section 5.1(a4.1 (a) through (sw) above.
Appears in 1 contract
Conduct Prior to the Effective Time. 5.1 4.1 Conduct of Business by of the Company, Indirect Parent, Second Intermediary -------------------------------------------------------------------- Parent, First Intermediary Parent and Parent. During the period from the date -------------------------------------------- of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, Indirect Parent, Second Intermediary Parent, First Intermediary Parent and Parent shall cause the Company to and the Company shall, except to the extent that Purchaser shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), carry on its business, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulations, pay its debts and taxes when due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has significant business dealings. In addition, except as permitted by the terms of this Agreement, and the transactions contemplated hereby, without the prior written consent of Purchaser, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, neither Indirect Parent, Second Intermediary Parent, First Intermediary Parent nor the Company agrees (except to the extent that Parent shall permit otherwise consent in writing), to carry on its business in the usual, regular and ordinary course in substantially the same manner as heretofore conducted, to pay its debts and taxes when due subject (i) to good faith disputes over such debts or taxes and (ii) in the case of taxes, to Parent's consent to the filing of material Returns if applicable, to pay or perform other obligations when due, and, to the extent consistent with such business, use all reasonable efforts consistent with past practice and policies to preserve intact the Company's present business organizations, keep available the services of its present officers and key employees and preserve their relationships with customers, suppliers, distributors, licensors, licensees, and others having business dealings with it, to the end that the Company's goodwill and ongoing businesses shall be unimpaired at the Effective Time. The Company shall promptly notify Parent of any event or occurrence not in the ordinary course of business of the Company towhich could have a Material Adverse Effect on the Company. Except as expressly contemplated by this Agreement, and the Company shall not do any not, without the prior written consent of the followingParent:
(a) With respect Except pursuant to Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parent, waive any stock repurchase rightsexisting contractual provisions of options outstanding on the date hereof and which are disclosed in writing pursuant to Section 2.2, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options stock granted under any employee, consultant, director or other the employee stock plans of the Company or authorize cash payments in exchange for any options granted under any of such plans to any employee, consultant or director of the Company, except as provided for under this Agreement or the attached exhibitsplans;
(b) Enter into any commitment or transaction (i) which requires performance over a period longer than six months in duration except transactions in the ordinary course of business, or
(c) Grant any severance or termination pay (i) to any director or officer or (ii) to any other employee except (x) payments made pursuant to standard written agreements outstanding, or policies existing, outstanding on the date hereof and as previously disclosed on Schedule 2.13 or (y) in writing or made available the case of employees who do not have standard written agreements, payments of up to Purchaser, or adopt any new severance plan, or amend or modify or alter in any manner any severance plan, agreement or arrangement existing on the date hereof or hire any new employees or consultantstwo months salary;
(cd) Transfer or license to any person or entity or otherwise extend, amend or modify any rights to the Company's Intellectual Property other than nonexclusive object code licenses except as mutually agreed by Parent and the Company Intellectual Property, or enter into grants to transfer or license to any person future patent rightsand set forth on a separate certificate;
(de) DeclareEnter into or amend any agreements pursuant to which any other party is granted marketing or other rights of any type or scope with respect to any products or technology of the Company, except as mutually agreed by Parent and the Company and set aside forth on a separate certificate;
(f) Violate, amend or otherwise modify the terms of any of the contracts set forth in the Company Disclosure Schedule;
(g) Commence any litigation;
(h) Declare or pay any dividends on or make any other distributions (whether in cash, stock, equity securities stock or property) in respect of any of its capital stock stock, or 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 any shares of capital stock;
(e) Purchasestock of the Company, redeem or repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock except from former employees, directors and consultants in accordance with agreements providing for the repurchase of shares in connection with any termination of service to the Company;
(fi) Issue, deliver, sell, authorize, pledge deliver or otherwise encumber sell or authorize or propose any of the foregoing with respect to issuance, delivery or sale of, or purchase or propose the purchase of, any shares of its capital stockstock or securities convertible into, or enter into subscriptions, rights, warrants or options to acquire, or other agreements or commitments of any character obligating it to issue any such sharesshares or other convertible securities, other than the repurchase of shares of the Company's Common Stock from terminated employees pursuant to the terms of restricted stock purchase agreements and the issuance of shares of the Company's Common Stock pursuant to the exercise of Company Incentive Options (as defined below) outstanding as of the date of this Agreement;
(gj) Cause, Cause or permit or propose any amendments to the Company Charter Documentsits Articles of Incorporation or Bylaws;
(hk) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a substantial portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to enter into any joint ventures, strategic partnerships or alliances;agree
(il) Sell, lease, license, encumber license or otherwise dispose of any of its properties or assets which are material, individually or in the aggregate, to the business of the Company, except sales of inventory in the ordinary course of business consistent with past practicebusiness, except as mutually agreed by Parent and the Company and set forth on a separate certificate;
(jm) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, or issue or sell any debt securities of the Company or options, warrants, calls or other rights to acquire guarantee any debt securities of Company, enter into any "keep well" or other agreement others except with respect to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other an existing lease line in an amount not more than in connection with the financing of ordinary course trade payables by Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parent$5,000;
(kn) Adopt or amend any material employee policy or arrangementbenefit plan, or enter into any employment contract or collective bargaining agreement (other than except for offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will")Company's standard form for newly hired employees, pay any special bonus or special remuneration to any director or employee, or, except in the ordinary course of business consistent with past practice, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultantsemployees;
(io) payRevalue any of its assets, dischargeincluding without limitation writing down the value of inventory or writing off notes or accounts receivable other than in the ordinary course of business;
(p) Pay, settle discharge or satisfy in an amount in excess of $5,000 in any claimsone case any claim, liabilities liability or obligations obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), or litigation (whether or not commenced prior to the date of this Agreement) other than the payment, discharge, settlement discharge or satisfaction, satisfaction in the ordinary course of business consistent with past practice of liabilities reflected or in accordance with their terms, or liabilities recognized or disclosed reserved against in the most recent consolidated financial statements Company Financial Statements (or the notes thereto) of Company as provided to the Purchasers or incurred since the date of such financial statements, or (ii) waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any confidentiality or similar agreement to which Company is a party or of which Company is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business in excess of $10,000;
(n) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any Material Contract or agreement to which Company is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into, renew or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company other than renewals of existing nonexclusive contracts, agreements or obligations;
(p) Except as required by GAAP, revalue any of its assets or make any change in accounting methods, principles or practices);
(q) Incur or enter into any agreement, contract or commitment requiring Company to pay in excess of $10,000, excluding routine purchase orders consistent with past practices;
(r) Settle any material litigation;
(s) Make or change any material election in respect of Taxes, adopt or change any accounting method in respect of Taxes, file any Tax Returns material Return or any amendment to any Tax Return other than in a manner consistent with prior practicesmaterial Return, enter into any closing agreement, settle any claim or assessment in respects respect of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes;; or
(tr) Agree Take, or agree in writing or otherwise to take take, any of the actions described in Section 5.1(aSections 4.1(a) through (sq) above, or any action which would make any of the representations or warranties of the Company contained in this Agreement untrue or incorrect or prevent the Company from performing or cause the Company not to perform its covenants hereunder.
Appears in 1 contract
Samples: Agreement and Plan of Reorganization (Sagent Technology Inc)
Conduct Prior to the Effective Time. 5.1 Conduct of Business by Company, Indirect Parent, Second Intermediary -------------------------------------------------------------------- Parent, First Intermediary Parent Company and Parent. During the period from the ----------------------------------------- date -------------------------------------------- of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, Indirect Parent, Second Intermediary Parent, First Intermediary Parent Company and Parent shall cause the Company to and the Company each of its subsidiaries shall, except to the extent that Purchaser shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed)writing, carry on its business, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulations, pay its debts and taxes when due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has significant business dealings. In addition, except as permitted by the terms of this Agreement, and the transactions contemplated hereby, and except as provided in Section 5.1 of the Company Schedule, without the prior written consent of Purchaser, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, neither Indirect ParentCompany shall not, Second Intermediary Parentand with respect to Section (a) below, First Intermediary Parent nor the Parent shall not permit the Company or any of the Company's subsidiaries to, and Company shall not do any of the following:
(a) With respect to Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parent, waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans to any employee, consultant or director of the Company, except as provided for under this Agreement or the attached exhibits;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing or made available to Purchaser, or adopt any new severance plan, or amend or modify or alter in any manner any severance plan, agreement or arrangement existing on the date hereof or hire any new employees or consultantshereof;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify any rights to the Company Intellectual Property, or enter into grants to transfer or license to any person future patent rights, other than in the ordinary course of business consistent with past practices, provided that in no event shall Company license on an exclusive basis or sell any Company Intellectual Property;
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of CompanyCompany or its subsidiaries;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber or propose any of the foregoing with respect to any shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares;
(g) Cause, permit or propose any amendments to the Company Charter DocumentsDocuments (or similar governing instruments of any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to enter into any joint ventures, strategic partnerships or alliances;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory in the ordinary course of business consistent with past practice;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than in connection with the financing of ordinary course trade payables by Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parentconsistent with past practice;
(k) Adopt or amend any material employee policy or arrangement, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director or employee, or, except in the ordinary course of business consistent with past practice, increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultants;
(i) pay, discharge, settle or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), or litigation (whether or not commenced prior to the date of this Agreement) other than the payment, discharge, settlement or satisfaction, in the ordinary course of business consistent with past practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company as provided to the Purchasers or incurred since the date of such financial statements, or (ii) waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any confidentiality or similar agreement to which Company or any of its subsidiaries is a party or of which Company or any of its subsidiaries is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business in excess of $10,000100,000;
(n) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any Material Contract or agreement to which Company or any subsidiary thereof is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into, renew or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company other than renewals of existing nonexclusive contracts, agreements or obligations;
(p) Except as required by GAAP, revalue any of its assets or make any change in accounting methods, principles or practices;
(q) Incur or enter into any agreement, contract or commitment requiring Company or any of its subsidiaries to pay in excess of $10,000100,000, excluding routine purchase orders consistent with past practices;
(r) Settle any material litigation;
(s) Make or change any election in respect of Taxes, adopt or change any accounting method in respect of Taxes, file any Tax Returns or any amendment to any Tax Return other than in a manner consistent with prior practices, enter into any closing agreement, settle any claim or assessment in respects of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes;
(t) Agree in writing or otherwise to take any of the actions described in Section 5.1(a) through (s) above.
Appears in 1 contract
Conduct Prior to the Effective Time. 5.1 4.1 Conduct of Business by Company, Indirect Parent, Second Intermediary -------------------------------------------------------------------- Parent, First Intermediary Parent and Parent. ------------------------------- During the period from the date -------------------------------------------- of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective TimeClosing, Indirect Parent, Second Intermediary Parent, First Intermediary Parent and Parent shall cause the Company to and the Company shallCompany, except to the extent that Purchaser the other party shall otherwise consent in writing (which consent writing, shall not be unreasonably withheld or delayed), carry on its business, business in the usual, regular and ordinary coursecourse consistent with past practices, in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulations, pay its debts and taxes when due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve substantially intact its present business organization, (ii) keep available the services of its present officers and employees and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has significant business dealings. In addition, except as required or permitted by the terms of this Agreement, and the transactions contemplated hereby, without the prior written consent of Purchaserthe other party, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective TimeClosing, neither Indirect Parent, Second Intermediary Parent, First Intermediary Parent nor Parent shall permit the Company to, and Company shall not to do any of the following:
(a) With respect to Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parent, waive Waive any stock repurchase rights, accelerate, amend or (except as specifically provided for herein) change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans to any employee, consultant or director of the Company, except as provided for under this Agreement or the attached exhibitsplans;
(b) Grant any severance or termination pay to any officer or employee except pursuant to applicable law, written agreements outstanding, or policies existing, existing on the date hereof and as previously or concurrently disclosed in writing or made available to Purchaserthe other party, or adopt any new severance plan, or amend or modify or alter in any manner any severance plan, agreement or arrangement existing on the date hereof or hire any new employees or consultantshereof;
(c) Transfer or license to any person or entity or otherwise extendExcept for the Distribution, amend or modify any rights to the Company Intellectual Property, or enter into grants to transfer or license to any person future patent rights;
(d) Declaredeclare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock;
(ed) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company, except repurchases of unvested shares at cost in connection with the termination of the employment relationship with any employee pursuant to stock option or purchase agreements in effect on the date hereof;
(fe) Issue, deliver, sell, authorize, pledge or otherwise encumber encumber, or propose agree to any of the foregoing with respect to, any shares of capital stock or any securities convertible into or exchangeable for shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into or exchangeable for shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such sharesshares or convertible or exchangeable securities;
(f) Amend its Charter Documents;
(g) CauseExcept for the Transfer Agreement, permit acquire or propose any amendments to the Company Charter Documents;
(h) Acquire dispose or agree to acquire or dispose by merging or consolidating with, or by purchasing or disposing of any equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or dispose or agree to acquire or dispose any assets which are material, individually or in the aggregate, to the business of Company, or enter into any joint ventures, strategic partnerships or alliancesalliances or other arrangement;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory in the ordinary course of business consistent with past practice;
(jh) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than in connection with the financing of ordinary course trade payables by Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parentforegoing;
(ki) Adopt or amend any material employee benefit plan, policy or arrangement, any employee stock purchase or employee stock option plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director or employee, or, except in the ordinary course of business consistent with past practice, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultants, except in the ordinary course of business consistent with past practices;
(ij) Except as disclosed in SCHEDULE 4.1(J) hereto, pay, discharge, settle or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), or litigation (whether or not commenced prior to the date of this Agreement) other than the payment, discharge, settlement or satisfaction, in the ordinary course of business consistent with past practice practices or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company as provided to the Purchasers or incurred since the date of such financial statements, or (ii) waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any confidentiality or similar agreement to which Company is a party or of which Company is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business in excess of $10,000;
(n) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any Material Contract or agreement to which Company is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into, renew or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company other than renewals of existing nonexclusive contracts, agreements or obligations;
(pk) Except as required by U.S. GAAP, revalue any of its assets or make any change in accounting methods, principles or practices;
(ql) Incur Except as set forth in SCHEDULE 4.1(L) hereto, incur or enter into any agreement, contract or commitment requiring Company such party to pay in excess of $10,000, excluding routine purchase orders consistent with past practices1,000 in any 12 month period;
(rm) Settle Except for the ASAP Subsidiary, form, establish or acquire any material litigationSubsidiary;
(sn) Make Permit the any person to exercise any of its discretionary rights under any Plan to provide for the automatic acceleration of any outstanding options, the termination of any outstanding repurchase rights or change the termination of any election in respect of Taxes, adopt or change any accounting method in respect of Taxes, file any Tax Returns or any amendment cancellation rights issued pursuant to any Tax Return other than in a manner consistent with prior practices, enter into any closing agreement, settle any claim or assessment in respects of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes;such plans; or
(to) Agree in writing or otherwise agree, commit or resolve to take any of the actions described in Section 5.1(a4.1 (a) through (sn) above.
Appears in 1 contract
Conduct Prior to the Effective Time. 5.1 4.1 Conduct of Business by Company, Indirect Parent, Second Intermediary -------------------------------------------------------------------- Parent, First Intermediary Parent Company and Parent. During the period from the date -------------------------------------------- of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective TimeClosing, Indirect Parenteach of the Company, Second Intermediary Parent, First Intermediary Parent and Parent shall cause the Company to and the Company Merger Sub shall, except to the extent that Purchaser the other party shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed)writing, carry on its business, business in the usual, regular and ordinary coursecourse consistent with past practices, in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulationsregulations (except where noncompliance would not have a Material Adverse Effect), pay its debts and taxes when due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve substantially intact its present business organization, (ii) keep available the services of its present officers and employees and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has significant business dealings. In addition, except as required or permitted by the terms of this Agreement, and the transactions contemplated hereby, without the prior written consent of Purchaserthe other party, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective TimeClosing, neither Indirect Parenteach of the Company, Second Intermediary Parent, First Intermediary Parent nor Parent shall permit the Company to, and Company Merger Sub shall not do any of the following:
(a) With respect to Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parent, waive Waive any stock repurchase rights, accelerate, amend or (except as specifically provided for herein) change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans to any employee, consultant or director of the Company, except as provided for under this Agreement or the attached exhibitsplans;
(b) Grant any severance or termination pay to any officer or employee except pursuant to applicable law, written agreements outstanding, or policies existing, existing on the date hereof and as previously or concurrently disclosed in writing or made available to Purchaserthe other party, or adopt any new severance plan, or amend or modify or alter in any manner any severance plan, agreement or arrangement existing on the date hereof or hire any new employees or consultantshereof;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify any material rights to any Intellectual Property of the Company Intellectual Propertyor Parent, as applicable, or enter into grants to transfer or license to any person future patent rights, other than in the ordinary course of business consistent with past practices provided that in no event shall the Company or Parent license on an exclusive basis or sell any Intellectual Property of the Company, or Parent as applicable;
(d) DeclareExcept for the Reverse Split by Parent to be completed following the Closing, declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock;
(e) PurchaseExcept as set forth in Schedule 4.1(e) hereof and except for the Preferred Share Buy-out, purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Companythe Company and Parent, as applicable, except repurchases of unvested shares at cost in connection with the termination of the employment relationship with any employee pursuant to stock option or purchase agreements in effect on the date hereof;
(f) IssueExcept the Debt Financing and the Loan Conversion, issue, deliver, sell, authorize, pledge or otherwise encumber encumber, or propose agree to any of the foregoing with respect to, any shares of capital stock or any securities convertible into or exchangeable for shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into or exchangeable for shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such sharesshares or convertible or exchangeable securities;
(g) Cause, permit or propose any amendments Amend their respective Charter Documents except as contemplated by the filing of the Certificate of Designations to the Company Charter Documentsbe filed by Parent prior to Closing;
(h) Acquire Except as disclosed in Schedule 4.1(h) hereto, acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of Parent or the Company as applicable, or enter into any joint ventures, strategic partnerships or alliancesalliances or other arrangements that provide for exclusivity of territory or otherwise restrict such party's ability to compete or to offer or sell any products or services;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets assets, except sales of inventory in the ordinary course of business consistent with past practicepractice and, except for the sale, lease or disposition (other than through licensing) of property or assets which are not material, individually or in the aggregate, to the business of such party;
(j) Incur Except as disclosed in Schedule 4.1(j) hereto and except for the Debt Financing, incur any indebtedness for borrowed money in excess of $50,000 in the aggregate or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Parent or the Company, as applicable, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than in connection with the financing of ordinary course trade payables by Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parentforegoing;
(k) Adopt Except as disclosed in Schedule 4.1(k) hereto or as contemplated by this Agreement, adopt or amend any material employee benefit plan, policy or arrangement, any employee stock purchase or employee stock option plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director or employee, or, except in the ordinary course of business consistent with past practice, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultants, except in the ordinary course of business consistent with past practices;
(l) Except as disclosed in Schedule 4.1
(1) hereto and except for the Loan Conversion, (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), or litigation (whether or not commenced prior to the date of this Agreement) other than the payment, discharge, settlement or satisfaction, in the ordinary course of business consistent with past practice practices or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of the Company or of Parent included in Parent SEC Reports, as provided to the Purchasers applicable, or incurred since the date of such financial statements, or (ii) waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any confidentiality or similar agreement to which the Company is a party or of which the Company is a beneficiary or to which Parent is a party or of which Parent is a beneficiary, as applicable;
(m) Make any individual or series of related payments outside of the ordinary course of business in excess of $10,000;
(nExcept as disclosed on Schedule 4.2(m) Except and except in the ordinary course of business consistent with past practicepractices, modify, amend or terminate any Material Contract of the Company, or Parent, as applicable, or other material contract or material agreement to which Company the Company, or Parent is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into, renew or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company other than renewals of existing nonexclusive contracts, agreements or obligations;
(pn) Except as required by U.S. GAAP, revalue any of its assets or make any change in accounting methods, principles or practices;
(qo) Incur Except as set forth in Schedule 4.1(o) hereto or in the ordinary course of business consistent with past practices, incur or enter into any agreement, contract or commitment requiring Company such party to pay in excess of $10,00050,000 in any 12 month period;
(p) Engage in any action that could reasonably be expected to cause the Transaction to fail to qualify as a "reorganization" under Section 368(a) of the Code;
(q) Except as set forth in Schedule 4.1(q) hereto, excluding routine purchase orders consistent with past practicessettle any litigation;
(r) Settle Make or rescind any Tax elections that, individually or in the aggregate, could be reasonably likely to adversely affect in any material litigationrespect the Tax liability or Tax attributes of such party, settle or compromise any material income tax liability or, except as required by applicable law, materially change any method of accounting for Tax purposes or prepare or file any Return in a manner inconsistent with past practice;
(s) Make Form, establish or change acquire any election in respect of Taxes, adopt or change any accounting method in respect of Taxes, file any Tax Returns or any amendment to any Tax Return other than in a manner consistent with prior practices, enter into any closing agreement, settle any claim or assessment in respects of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of TaxesSubsidiary except as contemplated by this Agreement;
(t) Permit any Person to exercise any of its discretionary rights under any Plan to provide for the automatic acceleration of any outstanding options, the termination of any outstanding repurchase rights or the termination of any cancellation rights issued pursuant to such plans; or
(u) Agree in writing or otherwise agree, commit or resolve to take any of the actions described in Section 5.1(a4.1 (a) through (st) above.
Appears in 1 contract
Samples: Merger Agreement (Qorus Com Inc)
Conduct Prior to the Effective Time. 5.1 4.1 Conduct of Business by Company, Indirect Parent, Second Intermediary -------------------------------------------------------------------- Parent, First Intermediary Parent and Parent. During the period from the date -------------------------------------------- of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, Indirect Parent, Second Intermediary Parent, First Intermediary Parent and Parent shall cause the Company to and the Company shall, except to the extent that Purchaser shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), carry on its business, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulations, pay its debts and taxes when due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has significant business dealingsCompany. In addition, except as permitted by the terms of this Agreement, and the transactions contemplated hereby, without the prior written consent of Purchaser, during ----------------------------------- During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or and the Effective Time, neither Indirect Parentthe Company (which for the purposes of this Section 4.1 shall include the Company and each of its subsidiaries) agrees, Second Intermediary Parent, First Intermediary Parent nor except as expressly contemplated by this Agreement or to the extent that Parent shall permit otherwise consent in writing, to carry on its business in the usual, regular, and ordinary course, in substantially the same manner as heretofore conducted, and in compliance in all material respects with all applicable laws and regulations, to pay its debts and Taxes when due subject to good faith disputes over such debts or Taxes, to pay or perform other material obligations when due, and to use all reasonable efforts consistent with past practices and policies to preserve intact the Company's present business organizations, keep available the services of its present officers and employees, and preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others having business dealings with the Company, to the end that the Company's goodwill and ongoing businesses shall not be impaired in any material respect at the Effective Time. The Company shall promptly notify Parent of any event or occurrence not in the ordinary course of business of the Company toand will not enter into or amend any agreement or take any action which reasonably would be expected to have a Material Adverse Effect on the Company. Except as expressly contemplated by this Agreement, and the Company shall not do any prior to the Effective Time or earlier termination of this Agreement pursuant to its terms, without the followingprior written consent of Parent, which consent will not be unreasonably withheld:
(a) With respect to Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parent, waive Waive any stock repurchase rights, accelerate, amend amend, or change the period of exercisability of options or repurchase of restricted stock, or reprice options granted under any employee, consultant, director or other the employee stock plans of the Company or authorize cash payments in exchange for any options granted under any of such plans to any employee, consultant or director of the Company, except as provided for under this Agreement or the attached exhibits;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstandingplans, or policies existing, on the date hereof and as previously disclosed in writing or made available to Purchaser, or adopt any new severance plan, or amend or modify or alter in any manner any severance plan, agreement or arrangement existing on the date hereof or hire any new employees or consultants;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify any rights to the Company Intellectual Property, or enter into grants to transfer or license to any person future patent rights;
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber or propose by inaction suffer any of the foregoing with respect to any shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares;
(g) Cause, permit or propose any amendments to occur when unilateral action by the Company Charter Documents;
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to enter into any joint ventures, strategic partnerships or alliances;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory in the ordinary course of business consistent with past practice;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than in connection with the financing of ordinary course trade payables by Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parent;
(k) Adopt or amend any material employee policy or arrangement, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in action involving termination of such options) could have prevented it, all unless otherwise expressly required pursuant to the ordinary course terms of business consistent the Company Stock Option Plan, or take any such action (or by inaction suffer such to occur when unilateral action by the Company could have prevented it) with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration regard to any director warrant or employee, or, except in the ordinary course of business consistent with past practice, increase the salaries or wage rates or fringe benefits (including rights other right to severance or indemnification) of its directors, officers, employees or consultants;
(i) pay, discharge, settle or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), or litigation (whether or not commenced prior to the date of this Agreement) other than the payment, discharge, settlement or satisfaction, in the ordinary course of business consistent with past practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company as provided to the Purchasers or incurred since the date of such financial statements, or (ii) waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any confidentiality or similar agreement to which Company is a party or of which Company is a beneficiary;
(m) Make any individual or series of related payments outside acquire capital stock of the ordinary course of business in excess of $10,000Company;
(n) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any Material Contract or agreement to which Company is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into, renew or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company other than renewals of existing nonexclusive contracts, agreements or obligations;
(p) Except as required by GAAP, revalue any of its assets or make any change in accounting methods, principles or practices;
(q) Incur or enter into any agreement, contract or commitment requiring Company to pay in excess of $10,000, excluding routine purchase orders consistent with past practices;
(r) Settle any material litigation;
(s) Make or change any election in respect of Taxes, adopt or change any accounting method in respect of Taxes, file any Tax Returns or any amendment to any Tax Return other than in a manner consistent with prior practices, enter into any closing agreement, settle any claim or assessment in respects of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes;
(t) Agree in writing or otherwise to take any of the actions described in Section 5.1(a) through (s) above.
Appears in 1 contract
Conduct Prior to the Effective Time. 5.1 6.1 Conduct of Business by the Company, Indirect ParentEdtechX, Second Intermediary -------------------------------------------------------------------- ParentHoldco, First Intermediary Parent and Parentthe Merger Subs. During the period from the date -------------------------------------------- of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, Indirect Parent, Second Intermediary Parent, First Intermediary Parent and Parent shall cause the Company to and the Company Closing, each of the Company, the Company’s Subsidiaries, EdtechX, Holdco, and the Merger Subs shall, except to the extent that Purchaser EdtechX (in the case of a request by the Company or the Company’s Subsidiaries) or the Company (in the case of a request by EdtechX) shall otherwise consent in writing (which consent shall not be unreasonably withheld withheld, conditioned or delayed)) or as set forth in Schedule 6.1 hereto or as contemplated by this Agreement, carry on its business, business in the usual, regular and ordinary coursecourse consistent with past practices, in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulations, pay its debts and taxes when due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, Legal Requirements (except as expressly contemplated by Schedule 6.1 hereto) and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve substantially intact its present business organization, (ii) keep available the services of its present key officers and employees and (iii) preserve its relationships with key customers, suppliers, distributors, licensors, licensees, and others other business partners with which it has significant business dealingsdealings of more than $2,000,000 per annum. In addition, except as required or permitted by the terms of this Agreement, and the transactions contemplated herebyAgreement or as set forth in Schedule 6.1 hereto, without the prior written consent of PurchaserEdtechX (in the case of a request by the Company or the Company’s Subsidiaries) or the Company (in the case of a request by EdtechX) (which consent shall not be unreasonably withheld, conditioned or delayed), during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective TimeClosing, neither Indirect Parent, Second Intermediary Parent, First Intermediary Parent nor Parent shall permit each of the Company to(on its behalf and on behalf of its Subsidiaries), EdtechX, Holdco, EdtechX Merger Sub and Company Meten Merger Sub shall not do any of the following:
(a) With respect to Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parent, waive Waive any stock repurchase rights, accelerate, amend or (except as specifically provided for herein) change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans to any employee, consultant or director of the Company, except as provided for under this Agreement or the attached exhibitsplans;
(b) Grant any material severance or termination pay to (i) any officer or employee (ii) any employee, except pursuant to applicable law, written agreements outstanding, or Plans or policies existing, existing on the date hereof and as previously or concurrently disclosed in writing or made available to Purchaserthe other Party, or adopt in the case of the Company and its Subsidiaries except in connection with the promotion, hiring or firing of any new severance plan, or amend or modify or alter employee in any manner any severance plan, agreement or arrangement existing on the date hereof or hire any new employees or consultantsordinary course of business consistent with past practice;
(c) Transfer Abandon, allow to lapse, transfer, sell, assign, or license to any person or entity Person or otherwise extend, amend or modify any material rights to the Company any Intellectual Property, Property or enter into grants to transfer or license to any person Person future patent rights, other than in the ordinary course of business consistent with past practices;
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock (other than any such dividend or distribution by a Subsidiary of the Company to the Company or another such Subsidiary), or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock or other equity securities or ownership interests of the Company, EdtechX, or Holdco;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber encumber, or propose agree to any of the foregoing with respect to to, any shares of capital stockstock or other equity securities or ownership interests (other than in connection with the exercise of any Company Convertible Securities) or any securities convertible into or exchangeable for shares of capital stock or other equity securities or ownership interests, or subscriptions, rights, warrants or options to acquire any shares of capital stock or other equity securities or ownership interests or any securities convertible into or exchangeable for shares of capital stock or other equity securities or other ownership interests, or enter into other agreements or commitments of any character obligating it to issue any such shares, equity securities or other ownership interests or convertible or exchangeable securities;
(g) Cause, permit or propose Amend its Charter Documents in any amendments to the Company Charter Documentsmaterial respect;
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association association, or other business organization or division thereof, or otherwise acquire or agree to acquire outside the ordinary course of business any assets which are material, individually or in the aggregate, to the business of EdtechX or the Company, as applicable, or enter into any joint ventures, strategic partnerships or alliances, or other arrangements that provide for exclusivity of territory or otherwise restrict such Party’s ability to compete or to offer or sell any products or services to other Persons. For purposes of this paragraph, “material” includes the requirement that, as a result of such transaction, financial statements of the acquired, merged, or consolidated entity be included in the Registration Statement;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets assets, except (A) sales of inventory in the ordinary course of business consistent with past practice, and (B) the sale, lease or disposition of property or assets that are not material, individually or in the aggregate, to the business of such Party (measured with all of its Subsidiaries, taken as a whole);
(j) Incur Except incurrences of indebtedness under the Company’s existing credit facilities (and, in the case of the Company and its Subsidiaries, extensions of credit in the ordinary course with employees and among the Company and its Subsidiaries), incur any indebtedness for borrowed money or guarantee any such indebtedness of another personPerson or Persons (other than Affiliates), issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of CompanyEdtechX, Holdco, or the Company and its Subsidiaries, as applicable, enter into any "“keep well" ” or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than in connection with the financing of ordinary course trade payables by Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parentforegoing;
(k) Adopt Except as otherwise required by Legal Requirements or pursuant to an existing Plan, policy or Company Contract of the Company or its Subsidiaries, (i) adopt or materially amend any material employee policy or arrangementPlan (including any Plan that provides for severance), or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"practice), (ii) pay any special bonus or special remuneration to any director or employee, or, except in the ordinary course of business consistent with past practicepractices, or (iii) materially increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultants, except in the ordinary course of business consistent with past practices;
(l) (i) payPay, discharge, settle or satisfy any material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), or litigation (whether or not commenced prior to the date of this Agreement) other than the payment, discharge, settlement or satisfactionsatisfaction of any claims, liabilities or obligations in the ordinary course of business consistent with past practice practices or in accordance with their terms, or liabilities recognized or disclosed in the Company Financial Statements or in the most recent consolidated financial statements (or the notes thereto) of Company EdtechX SEC Reports, as provided to the Purchasers applicable, or incurred since the date of such financial statements, or (ii) waive the benefits of, agree to modify in any material manner, terminate, release any person Person from or knowingly fail to enforce any material confidentiality or similar agreement to which the Company or any of its Subsidiaries is a party or of which the Company any of its Subsidiaries is a beneficiary;
beneficiary (m) Make any individual or series of related payments outside of other than with customers and other counterparties in the ordinary course of business in excess consistent with past practices) or to which EdtechX is a party or of $10,000which EdtechX is a beneficiary, as applicable;
(nm) Except in the ordinary course of business consistent with past practicepractices, modify, amend modify in any material respect or terminate (other than in accordance with its terms) any Material Company Contract or agreement to which Company is a party EdtechX Contract, as applicable, or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into, renew or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company other than renewals of existing nonexclusive contracts, agreements or obligations;
(pn) Except as required by law or U.S. GAAP, revalue any of its assets in any material manner or make any material change in accounting methods, principles or practices;
(qo) Incur Except in the ordinary course of business consistent with past practices, incur or enter into any agreement, contract or commitment requiring Company such Party to pay in excess of $10,0002,000,000 in any 12 month period;
(p) Settle any material litigation where the consideration given by the Party is other than monetary or to which an officer, excluding routine purchase orders consistent director or employee of such Person is a party in his or her capacity as such;
(q) Make, revoke, amend, or rescind any material Tax elections, enter into or amend any agreement or settlement or compromise with any Governmental Entity with regard to a material amount of Tax, execute any waiver of restrictions on assessment or collection of any Tax other than in the ordinary course of business, or change any method of accounting for Tax purposes or prepare or file any Tax Return in a manner inconsistent with past practicespractice, except as otherwise required by applicable Legal Requirements;
(r) Settle Form or establish any material litigationsubsidiary except in the ordinary course of business consistent with prior practice or as contemplated by this Agreement;
(s) Make Permit any Person to exercise any of its discretionary rights under any Plan to provide for the automatic acceleration of any outstanding options, the termination of any outstanding repurchase rights or change the termination of any election in respect of Taxes, adopt or change any accounting method in respect of Taxes, file any Tax Returns or any amendment cancellation rights issued pursuant to any Tax Return other than in a manner consistent with prior practices, enter into any closing agreement, settle any claim or assessment in respects of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxessuch Plans;
(t) Make capital expenditures in excess of $2,000,000;
(u) Enter into any material transaction with or distribute or advance any assets or property to any of its officers, directors, partners, stockholders, managers, members or other Affiliates other than (i) the payment of salary and benefits and the advancement of expenses in the ordinary course of business consistent with prior practice or (ii) such distributions or advancements by a Subsidiary of the Company to the Company or another such Subsidiary; or
(v) Agree in writing or otherwise agree or commit to take any of the actions described in Section 5.1(a6.1(a) through (su) above.
Appears in 1 contract
Samples: Agreement and Plan of Reorganization (EdtechX Holdings Acquisition Corp.)
Conduct Prior to the Effective Time. 5.1 4.1 Conduct of Business by of the Company, Indirect Parent, Second Intermediary -------------------------------------------------------------------- Parent, First Intermediary Parent and Parent. During the period from the date -------------------------------------------- of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, Indirect Parent, Second Intermediary Parent, First Intermediary Parent and Parent shall cause the Company to and the Company shall, except to the extent that Purchaser shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), carry on its business, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulations, pay its debts and taxes when due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has significant business dealings. In addition, except as permitted by the terms of this Agreement, and the transactions contemplated hereby, without the prior written consent of Purchaser, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, neither Indirect Parent, Second Intermediary Parent, First Intermediary Parent nor the Company agrees (except to the extent that Parent shall permit otherwise consent in writing) to carry on its business in the usual, regular and ordinary course in substantially the same manner as heretofore conducted, to pay its debts and Taxes when due, to pay or perform other obligations when due, and, to the extent consistent with such business, to use all reasonable best efforts consistent with past practice and policies to preserve intact its present business organization, keep available the services of its present officers and key employees and preserve the Company's relationships with customers, suppliers, distributors, licensors, licensees, and others having business dealings with it, all with the goal of preserving unimpaired its goodwill and ongoing businesses at the Effective Time. The Company shall promptly notify Parent of any event or occurrence or emergency not in the ordinary course of its business, and any material event involving or adversely affecting the Company toor its business. Except as expressly contemplated by this Agreement, and the Company shall not do any not, without the prior written consent of the followingParent:
(a) With Enter into any commitment, activity or transaction other than in the ordinary course of business consistent with past practice;
(b) Transfer to any person or entity any rights to any Company Intellectual Property (other than pursuant to end-user licenses in the ordinary course of business) or enter into any agreement with respect to Indirect Company Intellectual Property with any person or entity other than in the ordinary course of business consistent with past practice;
(c) Hire any employees or terminate any employees other than for cause or encourage any employees to resign from the Company other than in the ordinary course of business consistent with past practice;
(d) Amend or otherwise modify (or agree to do so), except in the ordinary course of business, or violate the terms of, any of the agreements set forth or described in the Company Schedules;
(e) Commence or settle any litigation;
(f) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect of any of its capital stock, or 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 capital stock of the Company, or repurchase, redeem or otherwise acquire, directly or indirectly, any shares of its capital stock (or options, warrants or other rights exercisable therefor) except for (i) repurchases of Company Capital Stock upon the termination of service of any service providers of the Company in accordance with the standard terms set forth in the agreements governing such repurchases, all of which agreements have been provided or made available to Parent, Second Intermediary (ii) conversion of Company Preferred Stock and (iii) exercises or conversion of Company Convertible Securities;
(g) Except for the issuance of shares of Company Capital Stock upon exercise or conversion of presently outstanding Company Options or Warrants, and except for the issuance of Company Options to new and current employees in the ordinary course of business exercisable for an amount of shares of Company Common Stock not in excess of 4,000,000 and with an exercise price equal to the then fair market value of the Company Common Stock (taking into account the Exchange Ratio in the Merger), issue, sell, grant, contract to issue, grant or sell, or authorize the issuance, delivery, sale or purchase of any shares of Company Capital Stock or securities convertible into, or exercisable or exchangeable for, shares of Company Capital Stock, or any securities, warrants, options or rights to purchase any of the foregoing, except for issuances of Company Capital Stock upon the exercise thereof or upon exercise or conversion of Company Convertible Securities or Company Preferred Stock outstanding as of the date of this Agreement;
(h) Cause or permit any amendments to its Certificate of Incorporation or Bylaws;
(i) Acquire or agree to acquire by merging or consolidating with, or by purchasing any assets or equity securities of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company;
(j) Sell, lease, license or otherwise dispose of any of the assets or properties of the Company which are not Company Intellectual Property other than in the ordinary course of business and consistent with past practices, including but not limited to the performance of obligations under contractual arrangements listed on the Company Schedules existing as of the date hereof, or create any security interest in such assets or properties;
(k) Grant any loan to any person or entity, incur any indebtedness or guarantee any indebtedness, issue or sell any debt securities, guarantee any debt securities of others, purchase any debt securities of others or amend the terms of any outstanding agreements related to borrowed money, except for advances to employees for travel and business expenses in the ordinary course of business consistent with past practices;
(l) Grant any severance or termination pay (cash, equity or otherwise) to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing or made available to Parent, First Intermediary Parent or Parentadopt any new severance plan, or amend or modify or alter in any respect any severance plan, agreement or arrangement existing on the date hereof, or grant any equity-based compensation;
(m) Revalue any of its assets, including without limitation writing down the value of inventory or writing off notes or accounts receivable other than in the ordinary course of business and consistent with past practice;
(n) Take any action to accelerate the vesting schedule of any of the outstanding Company Options or Company Capital Stock;
(o) Pay, discharge or satisfy, in an amount in excess of $25,000 (in any one case) or $100,000 (in the aggregate) any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business of liabilities reflected or reserved against in the Company Financial Statements or incurred by the Company following the date of the Current Balance Sheet in the ordinary course of business;
(p) Make or change any material election in respect of Taxes, adopt or change any accounting method in respect of Taxes, enter into any closing agreement, settle any claim or assessment in respect of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes;
(q) Enter into any strategic alliance, joint development or joint marketing arrangement or agreement other than in the ordinary course of business consistent with past practice;
(r) Fail to pay or otherwise satisfy its monetary obligations as they become due, except such as are being contested in good faith;
(s) Waive or commit to waive any rights with a value in excess of $25,000 (in any one case) or $100,000 (in the aggregate);
(t) Cancel, materially amend or renew any insurance policy other than in the ordinary course of business;
(u) Alter, or enter into any commitment to alter, its interest in any corporation, association, joint venture, partnership or business entity in which the Company directly or indirectly holds any interest on the date hereof;
(v) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans to any employee, consultant or director of the Company, except as provided for under this Agreement or the attached exhibitsplans;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing or made available to Purchaser, or adopt any new severance plan, or amend or modify or alter in any manner any severance plan, agreement or arrangement existing on the date hereof or hire any new employees or consultants;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify any rights to the Company Intellectual Property, or enter into grants to transfer or license to any person future patent rights;
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber or propose any of the foregoing with respect to any shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares;
(g) Cause, permit or propose any amendments to the Company Charter Documents;
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to enter into any joint ventures, strategic partnerships or alliances;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory in the ordinary course of business consistent with past practice;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than in connection with the financing of ordinary course trade payables by Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parent;
(kw) Adopt or amend any material employee benefit plan, policy or arrangement, or employee stock purchase or stock option plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into into, in the ordinary course of business and consistent with past practice practice, with newly hired employees who are terminable "at will"" and who are not officers of the Company), pay any special bonus or special remuneration (cash, equity or otherwise) to any director or employee, orgrant any equity-based compensation award, except in the ordinary course of business consistent with past practice, or increase the salaries or wage rates or fringe benefits (cash, equity or otherwise) (including rights to severance or indemnification) of its directors, officers, employees or consultants;
(i) pay, discharge, settle or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), or litigation (whether or not commenced prior to the date of this Agreement) consultants other than the payment, discharge, settlement or satisfaction, in the ordinary course of business consistent with past practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company as provided to the Purchasers or incurred since the date of such financial statements, or (ii) waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any confidentiality or similar agreement to which Company is a party or of which Company is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business in excess of $10,000;
(n) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any Material Contract or agreement to which Company is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;; or
(ox) Enter into, renew or materially modify any contracts, agreementsTake, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company other than renewals of existing nonexclusive contracts, agreements or obligations;
(p) Except as required by GAAP, revalue any of its assets or make any change in accounting methods, principles or practices;
(q) Incur or enter into any agreement, contract or commitment requiring Company to pay in excess of $10,000, excluding routine purchase orders consistent with past practices;
(r) Settle any material litigation;
(s) Make or change any election in respect of Taxes, adopt or change any accounting method in respect of Taxes, file any Tax Returns or any amendment to any Tax Return other than in a manner consistent with prior practices, enter into any closing agreement, settle any claim or assessment in respects of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes;
(t) Agree agree in writing or otherwise to take take, any of the actions described in Section 5.1(aSections 4.1(a) through (sw) above, or any other action that would prevent the Company from performing or cause the Company not to perform its covenants hereunder.
Appears in 1 contract
Samples: Agreement and Plan of Reorganization (Rational Software Corp)
Conduct Prior to the Effective Time. 5.1 4.1 Conduct of Business by of the Company, Indirect Parent, Second Intermediary -------------------------------------------------------------------- Parent, First Intermediary Parent and Parent. During the period from the date -------------------------------------------- of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, Indirect Parent, Second Intermediary Parent, First Intermediary Parent and Parent shall cause the Company to and the Company shall, except to the extent that Purchaser shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), carry on its business, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulations, pay its debts and taxes when due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has significant business dealings. In addition, except as permitted by the terms of this Agreement, and the transactions contemplated hereby, without the prior written consent of Purchaser, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or and the Effective Time, neither Indirect the Company agrees to use commercially reasonable efforts (except to the extent that Parent shall otherwise consent in writing, which consent will not be unreasonably withheld) to carry on its business in the usual, regular and ordinary course in substantially the same manner as heretofore conducted, to pay its debts and Taxes when due, to pay or perform other obligations when due (except for any of such which are in good faith being contested), and, to the extent consistent with such business, to use commercially reasonable efforts to preserve intact its present business organization, keep available the services of its present officers and key employees, and preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others having business dealings with it, all with the goal of preserving unimpaired its goodwill and ongoing businesses at the Effective Time. The Company shall promptly notify Parent of any event or occurrence not in the ordinary course of its business. Except as expressly contemplated by this Agreement, the Company shall not, without the prior written consent of Parent, Second Intermediary Parent, First Intermediary Parent nor Parent shall permit the Company to, and Company shall which consent will not do any of the followingbe unreasonably withheld:
(a) With respect to Indirect ParentEnter into any commitment, Second Intermediary Parent, First Intermediary Parent activity or Parent, waive any stock repurchase rights, accelerate, amend or change transaction not in the period ordinary course of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans to any employee, consultant or director of the Company, except as provided for under this Agreement or the attached exhibitsbusiness;
(bi) Grant any severance Except for licenses of software to customers in the ordinary course of business and consistent with past practices, sell, license or termination pay transfer to any officer person or employee except pursuant entity any rights to written agreements outstandingany Company Intellectual Property or enter into any agreement with respect to the Company Intellectual Property with any person or entity or with respect to the Intellectual Property of any person or entity, (ii) other than Intellectual Property rights acquired under "shrink-wrap" and other commercial end-user licenses (in each case which is not included in the Company's products or technology including products and technology currently available or under development), buy or license any Intellectual Property or enter into any agreement with respect to the Intellectual Property of any person or entity, (iii) enter into any agreement with respect to the development of any Intellectual Property with a third party, (iv) or change pricing or royalties charged by the Company to its customers or licensees, or policies existing, on the date hereof and as previously disclosed in writing pricing or made available royalties set or charged by persons who have licensed Intellectual Property to Purchaser, or adopt any new severance plan, or amend or modify or alter in any manner any severance plan, agreement or arrangement existing on the date hereof or hire any new employees or consultants;Company
(c) Transfer or license to any person or entity or otherwise extend, amend or modify any rights to the any Company Intellectual Property, or enter into grants Property except for licenses of software to transfer or license to any person future patent rightscustomers in the ordinary course of business and consistent with past practices;
(d) Enter into or amend any agreements pursuant to which any other party is granted manufacturing, marketing, distribution or similar rights of any type or scope with respect to any products of the Company except in the ordinary course of business and consistent with past practices;
(e) Amend or otherwise modify (or agree to do so), except in the ordinary course of business consistent with past practice, or violate the terms of, any of the agreements set forth or described in the Company Disclosure Schedules;
(f) Commence or settle any litigation or any dispute resolution process, except in connection with this Agreement;
(g) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities stock or property) in respect of any capital stock Company Capital Stock, or split, combine or reclassify any capital stock of the Company Capital Stock or issue or authorize the issuance of any other securities in respect ofsecurities, in lieu of or in substitution for any capital stock;
(e) Purchaseshares of Company Capital Stock, or repurchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock Company Capital Stock (or options, warrants or other rights exercisable therefor) other than the repurchase at cost of shares of employees upon termination of their employment with the Company;
(fh) Issue, deliver, sell, authorize, pledge Cause or otherwise encumber permit any amendments to its Certificate of Incorporation or propose any of the foregoing with respect to any shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such sharesBylaws;
(g) Cause, permit or propose any amendments to the Company Charter Documents;
(hi) Acquire or agree to acquire by merging or consolidating with, or by purchasing any assets or equity interest in or a portion of the assets securities of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to enter into acquire any joint venturesassets which are material, strategic partnerships individually or alliancesin the aggregate, to the business of the Company;
(ij) Sell, lease, license, encumber license or otherwise dispose of any of its properties or assets assets, except sales of inventory in the ordinary course of business and consistent with past practice;
(jk) Incur any indebtedness for borrowed money (except pursuant to any existing loan agreement) or guarantee any such indebtedness of another person, any other party or issue or sell any debt securities of the Company or options, warrants, calls purchase or other rights to acquire guarantee any debt securities of Company, enter into any "keep well" others or other agreement to maintain any financial statement condition or enter into any arrangement having amend the economic effect terms of any of the foregoing other than in connection with the financing of ordinary course trade payables by Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parentoutstanding loan agreement;
(kl) Grant any loans to others or purchase debt securities of others or amend the terms of any outstanding loan agreement except in the ordinary course of business and consistent with past practices;
(m) Grant any severance or termination pay to any director, officer, employee or consultant, except payments made pursuant to written agreements or policies outstanding on the date hereof (all of which such agreements are disclosed on Schedule 2.20(b));
(n) Adopt or amend any material employee benefit plan, program, policy or arrangement (including without limitation any amendment which accelerates vesting under any such employee benefit plan, program, policy or arrangement), or enter into any employment contract contract, extend any employment offer, pay or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), agree to pay any special bonus or special remuneration to any director director, employee or employeeconsultant (except pursuant to any policy, orplan, agreement or arrangement in effect on the date of this Agreement) or except in the ordinary course of business consistent Business in connection with past practiceannual reviews, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultantsemployees;
(io) payTake any action, dischargeincluding the acceleration of vesting of any options, settle warrants, restricted stock or satisfy other rights to acquire shares of Company capital stock, which would be reasonably likely to interfere with Parent's ability to account for the Merger as a pooling of interests or any claimsother action that could jeopardize the treatment of the Merger as a tax-free reorganization hereunder;
(p) Pay, liabilities discharge or obligations satisfy, in an amount in excess of $25,000, in any one case, or $100,000, in the aggregate, any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), or litigation (whether or not commenced prior to the date of this Agreement) other than the payment, discharge, settlement discharge or satisfaction, satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company as provided to the Purchasers or incurred since the date of such financial statements, or (ii) waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any confidentiality or similar agreement to which Company is a party or of which Company is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business in excess of $10,000;
(n) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any Material Contract or agreement to which Company is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into, renew or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company other than renewals of existing nonexclusive contracts, agreements or obligations;
(p) Except as required by GAAP, revalue any of its assets or make any change in accounting methods, principles or practices;
(q) Incur or enter into any agreement, contract or commitment requiring Company to pay in excess of $10,000, excluding routine purchase orders and consistent with past practices;
(r) Settle any material litigation;
(sq) Make or change any material election in respect of Taxes, adopt or change any accounting method in respect of Taxes, file any Tax Returns or any amendment to any Tax Return other than in a manner consistent with prior practices, enter into any material closing agreementagreement in respect of taxes, settle any material claim or assessment in respects respect of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes;
(r) Enter into any strategic alliance, joint development or joint marketing arrangement or agreement;
(s) Waive or commit to waive any rights with a value in excess of $25,000, in any one case, or $100,000, in the aggregate;
(t) Agree Cancel, materially amend or renew any insurance policy other than in the ordinary course of business;
(u) Alter, or enter into any commitment to alter, its equity interest in any corporation, association, joint venture, partnership or business entity in which the Company directly or indirectly holds any such interest on the date hereof; or
(v) Take, or agree in writing or otherwise to take take, any of the actions described in Section 5.1(aSections 4.1(a) through (sx) above, or any other action that would prevent the Company from performing or cause the Company not to perform its covenants hereunder.
Appears in 1 contract
Samples: Agreement and Plan of Reorganization (Russo Paul M)
Conduct Prior to the Effective Time. 5.1 4.1 Conduct of Business by of the Company, Indirect Parent, Second Intermediary -------------------------------------------------------------------- Parent, First Intermediary Parent and Parent. During the period from the date -------------------------------------------- of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, Indirect Parent, Second Intermediary Parent, First Intermediary Parent and Parent shall cause the Company to and the Company shallagrees, except unless otherwise required pursuant to the extent that Purchaser shall otherwise express terms of this Agreement or if Parent has given its prior consent in writing (which consent shall not be unreasonably withheld or delayedwithheld), to carry on on, and to cause each Company Subsidiary to carry on, its business, business in the usual, regular and ordinary coursecourse of business, in substantially the same manner as heretofore conducted to pay, and in compliance with all applicable laws to cause each Company Subsidiary to pay, its Liabilities and regulations, pay its debts and taxes Taxes when due subject in the usual, regular and ordinary course of business, to good faith disputes over such debts or taxes, pay or perform and to cause each Company Subsidiary to pay or perform its other material obligations when duedue in the usual, regular and ordinary course of business (other than Liabilities, Taxes and other obligations, if any, contested in good faith through appropriate proceedings), and use its commercially to use, and to cause each Company Subsidiary to use, reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and key employees and (iii) preserve its relationships with customerskey providers, subscribers, suppliers, distributors, licensors, licensees, independent contractors and others other Persons having business dealings with which it has significant the Company and/or the Company Subsidiaries, and maintain the Company's and the Company Subsidiaries' respective Permits and Approvals, all with the express purpose and intent of preserving unimpaired the Company's and each Company Subsidiary's goodwill and ongoing business dealingsthrough the Effective Time. In addition, except Except as otherwise expressly permitted by the terms of this Agreement, and neither the transactions contemplated herebyCompany nor either Company Subsidiary shall, without the prior written consent of PurchaserParent (which consent shall not be unreasonably withheld), take or agree in writing or otherwise to take any action that would make any of the Company's representations or warranties contained in this Agreement to be untrue or incorrect or prevent the Company from performing, or cause the Company not to perform, its agreements and covenants hereunder or knowingly cause any condition to Parent's closing obligations in Section 7.1 or Section 7.3 not to be satisfied. Without limiting the generality of the foregoing, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, except as required or expressly permitted by this Agreement, neither Indirect Parent, Second Intermediary Parent, First Intermediary Parent nor Parent shall permit the Company to, and nor any Company Subsidiary shall not do cause or permit any of the following:following with respect to the Company or any Company Subsidiary, without the prior written consent of Parent (which consent shall (i) not be unreasonably withheld, except in the case of those matters set forth in subsections (e) and (v) below, with respect to which Parent may grant or deny consent in its sole and absolute discretion, and (ii) be granted as promptly as reasonably practicable, and in any event within two Business Days, or such shorter period as may be warranted due to exigent circumstances):
(a) With respect cause or permit any amendments to Indirect Parent, Second Intermediary Parent, First Intermediary Parent its certificate of incorporation or Parent, waive any stock repurchase rights, accelerate, amend by laws (or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans to any employee, consultant or director of the Company, except as provided for under this Agreement or the attached exhibitscomparable organizational documents);
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing or made available to Purchaser, or adopt any new severance plan, or amend or modify or alter in any manner any severance plan, agreement or arrangement existing on the date hereof or hire any new employees or consultants;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify any rights to the Company Intellectual Property, or enter into grants to transfer or license to any person future patent rights;
(d) Declare, set aside declare or pay any dividends dividend on or make any other distributions payment, dividend or distribution (whether in cash, stock, equity securities stock or property) in respect of any capital stock of its Equity Securities, or split, combine or reclassify any capital stock of its Equity Securities or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its Equity Securities; provided, however, that the Company or either Company Subsidiary may declare or pay cash dividends, so long as such dividends will not impair the obligation of the Company and the Company Subsidiaries to satisfy the Minimum Capital Requirements;
(c) except as expressly contemplated by Section 1.6(d), accelerate, amend or change the period of exercisability or vesting of options or other rights granted under its stock plans or authorize cash payments in exchange for any capital stockoptions or other rights granted under any of such plans;
(d) enter into any Contract or commitment, or amend or otherwise modify or waive any of the terms of any of its Contracts, other than (i) Contracts with providers (other than any Affiliate or Associate of the Company or either Company Subsidiary) entered into in the ordinary course of business which (A) involve total obligations of less than $1,000,000 per annum in the case of any provider that is a hospital or similar facility, or $150,000 per annum in the case of any other provider, and (B) have a term of not more than one year and (ii) Contracts (excluding Contracts with providers) which involve total obligations of less than $50,000 per annum and which are not otherwise material to the business of the Company or the contracting Company Subsidiary, as applicable;
(e) Purchaseissue, redeem deliver or otherwise acquiresell or authorize or propose the issuance, directly delivery or indirectlysale of, any shares of capital stock of Company;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber or propose any of the foregoing with respect to any shares of capital stockEquity Securities, or enter into other agreements or commitments of any character obligating it to issue any such sharesshares or other convertible securities;
(f) transfer to any person or entity any rights to any Intellectual Property other than non-exclusive licenses in connection with the provision of services or benefits in the ordinary course of business;
(g) Causesell, permit lease, license or propose otherwise dispose of or encumber any amendments to of its Assets and Properties, other than transactions in connection with cash management and investment activities entered into in the ordinary course of business, consistent with past practice, provided that the Company Charter Documentsspecifically notifies Parent of all such transactions in excess of $100,000;
(h) Acquire acquire any Assets and Properties from any other Person, other than acquisitions in the ordinary course of business, consistent with past practice, not to exceed $100,000 in the aggregate during any month;
(i) incur any Indebtedness, other than Indebtedness incurred in the ordinary course of business, consistent with past practice, not to exceed $50,000 in any instance or $100,000 in the aggregate during any month;
(j) enter into any operating lease, other than in the ordinary course of business, consistent with past practice, and providing for payments of not greater than $50,000 over the term of the lease in any instance or $100,000 in the aggregate during any month;
(k) pay, discharge or satisfy any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise) arising other than in the ordinary course of business, other than the payment, discharge or satisfaction of liabilities reflected or reserved against in the Companies' Financials and reasonable expenses incurred in connection with the transactions contemplated by this Agreement;
(l) make any capital expenditures, capital additions or capital improvements, other than in the ordinary course of business, consistent with past practice, not to exceed $50,000 in any instance or $100,000 in the aggregate during any month;
(m) reduce the amount of any insurance coverage provided by existing insurance policies, or fail to renew any such insurance policy;
(n) terminate or waive any right of substantial value;
(o) (i) adopt or amend any employee benefit or stock purchase or option plan, (ii) hire any new director level or officer level consultant or employee, (iii) pay any special bonus or special remuneration to any employee, consultant or director or (iv) increase the salaries, wage rates, bonus levels, benefits, severance, termination pay, perquisites or compensation of any employee or consultant, other than increases in salaries or wage rates to non-director level or non-officer level employees, on an individual basis, in the ordinary course of business consistent with past practice;
(p) establish or modify any targets, goals, pools or similar provisions under any Plan, employment Contract or other employee compensation arrangement or independent contractor Contract or other compensation arrangement;
(q) commence a lawsuit other than (i) for the routine collection of bills, (ii) in such cases where it in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided that it consults with Parent prior to the filing of such a suit, or (iii) for a breach of this Agreement;
(r) acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a substantial portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to enter into any joint ventures, strategic partnerships or alliances;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory in the ordinary course of business consistent with past practice;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than in connection with the financing of ordinary course trade payables by Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parent;
(k) Adopt or amend any material employee policy or arrangement, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director or employee, or, except in the ordinary course of business consistent with past practice, increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultants;
(i) pay, discharge, settle or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), or litigation (whether or not commenced prior to the date of this Agreement) other than the payment, discharge, settlement or satisfaction, in the ordinary course of business consistent with past practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company as provided to the Purchasers or incurred since the date of such financial statements, or (ii) waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any confidentiality or similar agreement to which Company is a party or of which Company is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business in excess of $10,000;
(n) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any Material Contract or agreement to which Company is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into, renew or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company other than renewals of existing nonexclusive contracts, agreements or obligations;
(p) Except as required by GAAP, revalue any of its assets or make any change in accounting methods, principles or practices;
(q) Incur or enter into any agreement, contract or commitment requiring Company to pay in excess of $10,000, excluding routine purchase orders consistent with past practices;
(r) Settle any material litigation;
(s) Make make or change any election in respect of Taxes, adopt or change any accounting method in respect of Taxes, file any Tax Returns Return or any amendment to a Tax Return (except for any Tax Return other than in a manner consistent with prior practicesreturn that relates to the 2001 taxable period), enter into any closing agreement, settle any claim or assessment in respects respect of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes;
(t) Agree make any change in accounting policies, principles, methods, practices or procedures (including for bad debts, contingent liabilities or otherwise, respecting capitalization or expense of research and development expenditures, depreciation or amortization rates or timing of recognition of income and expense);
(u) revalue any of its assets, including writing off notes or accounts receivable or writing down any other assets;
(i) enter into any Contract with any Affiliate or Associate of the Company or either Company Subsidiary, (ii) enter into any other transaction which, if it had been entered into prior to the date hereof, would be required to be disclosed pursuant to Section 2.34, or (iii) make any payment to any Affiliate or Associate of the Company or either Company Subsidiary, other than payments required to be made pursuant to the express terms of any written Contract listed on Schedule 4.1;
(w) fail to maintain or renew any Permits, fail to comply with any Law or Order in any material respect, or violate any Designated Contract in any material respect;
(x) take or agree in writing or otherwise to take take, any of the actions described in Section Sections 5.1(a) through (s) abovethrough(w)above.
Appears in 1 contract
Conduct Prior to the Effective Time. SECTION 5.1 Conduct of Business by the Company, Indirect Parent, Second Intermediary -------------------------------------------------------------------- Parent, First Intermediary Parent and Parent. During the period from the date -------------------------------------------- of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Appointment Time, Indirect Parent, Second Intermediary Parent, First Intermediary Parent and Parent shall cause the Company to and the Company each of its subsidiaries shall, except to the extent that Purchaser Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed)writing, carry on its business, business in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted course consistent with past practice and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes Taxes when due subject to good faith disputes over such debts or taxesTaxes, pay or perform other material obligations when due, and use its commercially reasonable best efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, licensees and others with which it has significant business dealings. In addition, during that period the Company will promptly notify Parent of any material event involving its business or operations consistent with the agreements contained herein. In addition, except as contemplated or permitted by the terms of this Agreement and the Transaction Option Agreement, and except as contemplated by this Agreement or the transactions contemplated herebyTransaction Option Agreement, and except as set forth in Section 5.1 of the Company Disclosure Schedule, without the prior written consent of Purchaser, Parent during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Appointment Time, neither Indirect Parent, Second Intermediary Parent, First Intermediary Parent nor Parent shall permit the Company to, and Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) With respect to Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parent, waive Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans to any employee, consultant or director of the Company, except as provided for under this Agreement or the attached exhibitsplans;
(b) Grant any severance or termination pay to any director, officer or employee except pursuant to written agreements outstandingin effect, or policies existing, on the date hereof and (or as previously disclosed in writing or made available required by applicable law), copies of which have been provided to PurchaserParent, or adopt any new severance plan, or amend or modify or alter in any manner any severance plan, agreement or arrangement existing on the date hereof or hire any new employees or consultants;
(c) Transfer Enter into any licensing or other agreement with regard to the acquisition, distribution or licensing of any Company Intellectual Property Rights, or transfer or license to any person or entity or otherwise extendentity, amend or modify any rights to the Company Intellectual PropertyProperty Rights, other than non-exclusive licenses, distribution or enter other similar agreements entered into grants to transfer in the ordinary course of business consistent with past practice; provided that any such license (even if entered into in the ordinary course consistent with past practice) that has a value of $500,000 or license to any person future patent rightsmore shall require the written consent of Parent;
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock of the Company or split, combine or reclassify any capital stock of the Company or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stockstock of the Company;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Companythe Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the employment relationship with any employee pursuant to stock option or purchase agreements in effect on the date hereof;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of capital stock or propose any securities convertible into shares of the foregoing with respect capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such sharesshares or convertible securities, other than the issuance, delivery and/or sale of (i) shares of Company Common Stock pursuant to the exercise of outstanding Company Options, and (ii) pursuant to grants of Company Options to newly hired employees in the ordinary course of business consistent with past practice, and not to exceed in the aggregate pursuant to this clause (ii) 75,000 shares of Company Common Stock, during the first 60 days following the date of this Agreement, and increasing by 25,000 shares for each 30 day period thereafter, provided that such Company Options provide for standard vesting over a four-year period (one (1) year cliff vesting, with quarterly vesting thereafter);
(g) Cause, permit or propose any amendments to the Company Charter Documents;
(h) Acquire or agree to acquire by merging or consolidating with, or or, by purchasing any equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, ; or otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company or enter into any material joint ventures, strategic partnerships relationships or alliances;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory which are material, individually or in the ordinary course aggregate, to the business of business consistent with past practicethe Company;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing foregoing, other than in connection with the financing of ordinary course trade payables by Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parentof business consistent with past practice;
(k) Adopt Except as required to comply with any Legal Requirement, adopt or amend any material employee policy benefit plan or arrangementemployee stock purchase or employee stock option plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will")agreement, pay any special bonus or special remuneration to any director or employee, or, except in the ordinary course of business consistent with past practice, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultants;
(i) pay, discharge, settle or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), or litigation (whether or not commenced prior to the date of this Agreement) consultants other than the payment, discharge, settlement or satisfaction, in the ordinary course of business consistent with past practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements respect to employees and consultants (or the notes theretoother than officers) of Company as provided to the Purchasers or incurred since the date of such financial statements, or (ii) waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any confidentiality or similar agreement to which Company is a party or of which Company is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business in excess of $10,000;
(n) Except in the ordinary course of business consistent with past practice, modify, amend or terminate change any Material Contract management policies or agreement to which Company is a party or waive, delay the exercise of, release or assign any material rights or claims thereunderprocedures;
(o1) Enter into, renew or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company other than renewals of existing nonexclusive contracts, agreements or obligations;
(p) Except as required by GAAP, revalue any of its assets or make any change in accounting methods, principles or practices;
(q) Incur or enter into any agreement, contract or commitment requiring Company to pay in excess of $10,000, excluding routine purchase orders consistent with past practices;
(r) Settle Make any material litigationcapital expenditures, except in accordance with the current Company annual budget and plan, as previously disclosed to Parent;
(s) Make or change any election in respect of Taxes, adopt or change any accounting method in respect of Taxes, file any Tax Returns or any amendment to any Tax Return other than in a manner consistent with prior practices, enter into any closing agreement, settle any claim or assessment in respects of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes;
(t) Agree in writing or otherwise to take any of the actions described in Section 5.1(a) through (s) above.
Appears in 1 contract
Conduct Prior to the Effective Time. 5.1 4.1 Conduct of Business by the Company, Indirect Parent, Second Intermediary -------------------------------------------------------------------- Parent, First Intermediary Parent and Parent. ----------------------------------
(a) During the period from commencing with the date -------------------------------------------- execution and delivery of this Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant to its terms or the Effective Time, Indirect Parent, Second Intermediary Parent, First Intermediary Parent and Parent shall cause the Company to and the Company each of its subsidiaries shall, except to the extent that Purchaser Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed)writing, carry on its business, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulations, pay its debts and taxes when due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has significant business dealings. In addition, except Company will promptly notify Parent of any material event involving its business or operations.
(b) Except as permitted or required by the terms of this Agreement, and or as set forth in Section 4.1 of the transactions contemplated hereby, without the prior written consent of PurchaserCompany Disclosure Letter, during the ----------- period from commencing with the date execution and delivery of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, neither Indirect Parent, Second Intermediary Parent, First Intermediary Parent nor Parent shall permit the Company to, and Company shall not do any of the following, and shall not permit any of its subsidiaries to do any of the following, except to the extent that Parent shall otherwise consent in writing:
(ai) With respect to Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parent, waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans to any employee, consultant or director of the Company, except as provided for under this Agreement or the attached exhibitsplans;
(bii) Grant grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing or made available to PurchaserParent, or adopt any new severance plan, or amend or modify or alter in any manner respect any severance plan, agreement or arrangement existing on the date hereof hereof, or hire grant any new employees equity-based compensation (except as permitted by Section 4.1(b)(iv) hereof), whether payable in cash or consultants;stock; ------------------
(ciii) Transfer transfer or license to any person or entity entity, or otherwise extend, amend or modify any rights to the Company Intellectual Property, or enter into grants any agreements or make other commitments or arrangements to grant, transfer or license to any person future patent rightsrights other than non-exclusive licenses granted to end-users in the ordinary course of business and consistent with past practice;
(div) Declaredeclare, set aside or pay any dividends on on, or make any other distributions (whether in cash, stock, equity securities or property) in respect of of, any capital stock of the Company or any of its subsidiaries, or split, combine or reclassify any such capital stock stock, or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any such capital stock;
(ev) Purchasepurchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Companythe Company or any of its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the employment relationship with any employee pursuant to stock option or purchase agreements in effect on the date hereof;
(fvi) Issueissue, deliver, sell, authorize, pledge or otherwise encumber (or propose any of the foregoing with respect to to) any shares of capital stock of the Company or of any subsidiaries of the Company or any securities convertible into, or exercisable or exchangeable for, shares of such capital stock, or any subscriptions, rights, warrants or options to acquire any shares of such capital stock, or enter into other agreements or commitments of any kind or character obligating it the Company or any of its subsidiaries to issue any shares of such sharescapital stock or securities convertible, or exercisable or exchangeable for, shares of such capital stock, other than (A) the issuance, delivery and/or sale of (x) shares of Company Common Stock pursuant to the exercise of stock options therefor outstanding on the date of this Agreement, and (y) shares of Company Common Stock issuable to participants in the Employee Stock Purchase Plan consistent with the terms thereof, and (B) the granting of stock options, in the ordinary course of business and consistent with past practices, to newly hired employees who are not executive officers of the Company in an aggregate amount not to exceed the amount set forth in Section 4.1 ----------- of the Company Disclosure Letter;
(gvii) Causecause, permit or propose any amendments to the Company Charter Documentsits Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(hviii) Acquire acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, limited liability company, general or limited partnership, business trust, unincorporated association or other business organization organization, entity or division thereof, or otherwise acquire or agree to acquire all or substantially all of the assets of any of the foregoing, or purchase any equity interest in any of the foregoing or enter into any joint ventures, strategic partnerships or similar alliances;
(iix) Sellsell, lease, license, encumber or otherwise dispose of any properties or assets assets, except sales of inventory in the ordinary course of business consistent with past practice, and except for the sale, lease or disposition (other than through licensing) of property or assets which are not material, individually or in the aggregate, to the business of Company and its subsidiaries;
(jx) Incur incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing foregoing, other than in connection with the financing of ordinary course trade payables by Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parentconsistent with past practice;
(kxi) Adopt adopt or amend any material employee benefit plan, policy or arrangement, or employee stock purchase or stock option plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into into, in the ordinary course of business and consistent with past practice practice, with newly hired employees who are terminable "at will"" and who are not officers of the Company), pay any special bonus or special remuneration to any director or employee, or, except in the ordinary course of business consistent with past practice, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultants;
(ixii) (A) pay, discharge, settle or satisfy any claims, liabilities or obligations (absolute, accruedwhether absolute or contingent, asserted or unasserted, contingent accrued or unaccrued, or otherwise), ) or litigation (whether or not commenced prior to the date of this Agreement) ), other than the payment, discharge, settlement or satisfaction, in the ordinary course of business consistent with past practice or in accordance with their terms, or liabilities recognized or disclosed terms as in the most recent consolidated financial statements (or the notes thereto) existence as of Company as provided to the Purchasers or incurred since the date of such financial statementshereof, or (iiB) waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any confidentiality or similar agreement to which the Company or any of its subsidiaries is a party or of which the Company or any of its subsidiaries is a beneficiary;
(mxiii) Make make any individual or series of related payments outside of the ordinary course of business in excess of $10,000;300,000 in the case of any individual or series of related payments, or $1,000,000 in the aggregate, excluding payments permitted by this Section 4.1. -----------
(nxiv) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any Material Contract material contract or agreement to which the Company or any of its subsidiaries is a party party, or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(oxv) Enter enter into, renew or materially modify any contracts, agreements, agreements or obligations relating to the distribution, sale, license or marketing by third parties of Company's the products of the Company or any of its subsidiaries, or products licensed by the Company or any of its subsidiaries, other than renewals of existing nonexclusive non-exclusive contracts, agreements or obligationsobligations which may be cancelled by the Company without penalty and with prior notice of sixty (60) days or less;
(pxvi) Except except as required by GAAP, revalue any assets of the Company or any of its assets subsidiaries, or make any change in accounting methods, principles or practices;
(qxvii) Incur incur or enter into any agreement, contract or other commitment or arrangement requiring the Company or any of its subsidiaries to pay make payments in excess of $10,000300,000 in any individual case, excluding routine purchase orders or $1,000,000 in the aggregate;
(xviii) engage in any action that could reasonably be expected to cause the Merger to fail to qualify as a "reorganization" under Section 368(a) of the Code, whether or not otherwise permitted by the provisions of this Article IV; ----------
(xix) engage in any action with the intent to, directly or indirectly, adversely impact or materially delay the consummation of the Merger or any of the other transactions contemplated by this Agreement; or
(xx) hire any employee with an annual compensation level in excess of $100,000, except for employees who are not executive officers and are hired on an "at-will" basis in the ordinary course of business consistent with past practices;
(rxxi) Settle make any Tax election that is reasonably likely to adversely affect in any material litigation;
(s) Make respect the Tax liabilities or change any election in respect Tax attributes of Taxes, adopt or change any accounting method in respect of Taxes, file any Tax Returns the Company or any amendment to of its subsidiaries, or settle or compromise any material income Tax Return other than in a manner consistent with prior practices, enter into any closing agreement, settle any claim or assessment in respects of Taxesliability, or consent to any extension or waiver of the limitation any limitations period applicable with respect to any claim or assessment in respect of Taxes;
(txxii) Agree other than fees payable to pursuant to the engagement letter referred to in Section 2.18 hereof, make any individual or series of ------------ related payments outside of the ordinary course of business (including payments to legal, accounting or other professional service advisors) in excess of $1,000,000 in the aggregate;
(xxiii) agree in writing or otherwise to take any of the actions described in Section 5.1(a4.1(b)(i) through (s) above.Section 4.1(b)(xxii)
Appears in 1 contract
Conduct Prior to the Effective Time. 5.1 4.1 Conduct of Business by of the Company, Indirect Parent, Second Intermediary -------------------------------------------------------------------- Parent, First Intermediary Parent and Parent. During the period from the date -------------------------------------------- of this Agreement and continuing until the earlier of (x) the termination of this Agreement pursuant to its terms or and (y) the Effective Time, Indirect Parent, Second Intermediary Parent, First Intermediary Parent and the Company agrees (unless the Company is required to take such action pursuant to this Agreement or Parent shall cause the Company to and the Company shall, except to the extent that Purchaser shall otherwise give its prior consent in writing (writing, which consent shall not be unreasonably withheld or delayed), withheld) to carry on its business, business substantially in the usual, regular and ordinary course, in course substantially the same manner as heretofore conducted consistent with past practice and in compliance any event consistent with all applicable laws and regulationsthe Operating Plan provided prior to the date of this Agreement to Parent (any material deviations therefrom or material modifications to the Operating Plan shall be required to be approved in advance by Parent), to pay its debts Liabilities and taxes Taxes consistent with the Company's past practices (and in any event when due subject due), to good faith disputes over such debts or taxes, pay or perform other material obligations when duedue consistent with the Company's past practices (other than Liabilities, Taxes and other obligations, if any, contested in good faith through appropriate proceedings), and, to the extent consistent with such business, to use its all commercially reasonable efforts consistent with past practices and institute all commercially reasonable policies required to (i) preserve substantially intact its present business organization, (ii) keep available the services of its present officers and key employees and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, independent contractors and others other Persons having business dealings with which it has significant business dealingsit, all with the express purpose and intent of preserving substantially unimpaired its goodwill and ongoing businesses at the Effective Time, provided, however, that the Company may without necessity of Parent approval make adjustments to its operations that the Company's management reasonably deems necessary or appropriate to respond to any changed market, competitive, or economic conditions. In additionSubject to the same proviso, except as permitted expressly contemplated by the terms of this Agreement, and the transactions contemplated herebyCompany shall not, without the prior written consent of PurchaserParent, take or agree in writing or otherwise to take, any action that would result in the occurrence of any of the changes described in Section 2.9 or any other action that would make any of its representations or warranties contained in this Agreement untrue or incorrect in any material respect. The Company shall not, without the prior written consent of Parent, take or agree in writing or otherwise to take, any action that would prevent the Company from performing or cause the Company not to perform its agreements and covenants hereunder or knowingly cause any condition to Parent's closing obligations in Section 6.1 or Section 6.3 not to be satisfied. Without limiting the generality of the foregoing, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, neither Indirect Parent, Second Intermediary Parent, First Intermediary Parent nor Parent shall permit except as set forth in the Company toDisclosure Schedule or as required or expressly permitted by this Agreement, the Company and Company each of its Subsidiaries shall not do (and shall cause each of their respective Subsidiaries, if any, not to) do, cause or permit any of the following:
(a) With respect to Indirect , without the prior written consent of Parent, Second Intermediary Parent, First Intermediary Parent or Parent, waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans to any employee, consultant or director of the Company, except as provided for under this Agreement or the attached exhibits;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing or made available to Purchaser, or adopt any new severance plan, or amend or modify or alter in any manner any severance plan, agreement or arrangement existing on the date hereof or hire any new employees or consultants;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify any rights to the Company Intellectual Property, or enter into grants to transfer or license to any person future patent rights;
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber or propose any of the foregoing with respect to any shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares;
(g) Cause, permit or propose any amendments to the Company Charter Documents;
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to enter into any joint ventures, strategic partnerships or alliances;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory in the ordinary course of business consistent with past practice;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than in connection with the financing of ordinary course trade payables by Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parent;
(k) Adopt or amend any material employee policy or arrangement, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director or employee, or, except in the ordinary course of business consistent with past practice, increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultants;
(i) pay, discharge, settle or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), or litigation (whether or which shall not commenced prior to the date of this Agreement) other than the payment, discharge, settlement or satisfaction, in the ordinary course of business consistent with past practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company as provided to the Purchasers or incurred since the date of such financial statements, or (ii) waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any confidentiality or similar agreement to which Company is a party or of which Company is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business in excess of $10,000;
(n) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any Material Contract or agreement to which Company is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into, renew or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company other than renewals of existing nonexclusive contracts, agreements or obligations;
(p) Except as required by GAAP, revalue any of its assets or make any change in accounting methods, principles or practices;
(q) Incur or enter into any agreement, contract or commitment requiring Company to pay in excess of $10,000, excluding routine purchase orders consistent with past practices;
(r) Settle any material litigation;
(s) Make or change any election in respect of Taxes, adopt or change any accounting method in respect of Taxes, file any Tax Returns or any amendment to any Tax Return other than in a manner consistent with prior practices, enter into any closing agreement, settle any claim or assessment in respects of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes;
(t) Agree in writing or otherwise to take any of the actions described in Section 5.1(a) through (s) above.be unreasonably withheld:
Appears in 1 contract
Samples: Merger Agreement (Broadcom Corp)
Conduct Prior to the Effective Time. 5.1 4.1 Conduct of Business by of the Company, Indirect Parent, Second Intermediary -------------------------------------------------------------------- Parent, First Intermediary Parent and Parent. During the period from the date -------------------------------------------- of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, Indirect Parent, Second Intermediary Parent, First Intermediary Parent and Parent shall cause the Company to and the Company shallagrees, except unless otherwise required pursuant to the extent that Purchaser shall otherwise express terms of this Agreement or if Parent has given its prior consent in writing (which consent shall not be unreasonably withheld or delayedwithheld), to carry on on, and to cause each Company Subsidiary to carry on, its business, business in the usual, regular and ordinary coursecourse of business, in substantially the same manner as heretofore conducted to pay, and in compliance with all applicable laws to cause each Company Subsidiary to pay, its Liabilities and regulations, pay its debts and taxes Taxes when due subject in the usual, regular and ordinary course of business, to good faith disputes over such debts or taxes, pay or perform and to cause each Company Subsidiary to pay or perform its other material obligations when duedue in the usual, regular and ordinary course of business (other than Liabilities, Taxes and other obligations, if any, contested in good faith through appropriate proceedings), and use its commercially to use, and to cause each Company Subsidiary to use, reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and key employees and (iii) preserve its relationships with customerskey providers, subscribers, suppliers, distributors, licensors, licensees, independent contractors and others other Persons having business dealings with which it has significant the Company and/or the Company Subsidiaries, and maintain the Company's and the Company Subsidiaries' respective Permits and Approvals, all with the express purpose and intent of preserving unimpaired the Company's and each Company Subsidiary's goodwill and ongoing business dealingsthrough the Effective Time. In addition, except Except as otherwise expressly permitted by the terms of this Agreement, and neither the transactions contemplated herebyCompany nor either Company Subsidiary shall, without the prior written consent of PurchaserParent (which consent shall not be unreasonably withheld), take or agree in writing or otherwise to take any action that would make any of the Company's representations or warranties contained in this Agreement to be untrue or incorrect or prevent the Company from performing, or cause the Company not to perform, its agreements and covenants hereunder or knowingly cause any condition to Parent's closing obligations in Section 7.1 or Section 7.3 not to be satisfied. Without limiting the generality of the foregoing, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, except as required or expressly permitted by this Agreement, neither Indirect Parent, Second Intermediary Parent, First Intermediary Parent nor Parent shall permit the Company to, and nor any Company Subsidiary shall not do cause or permit any of the following:following with respect to the Company or any Company Subsidiary, without the prior written consent of Parent (which consent shall (i) not be unreasonably withheld, except in the case of those matters set forth in subsections (e) and (v) below, with respect to which Parent may grant or deny consent in its sole and absolute discretion, and (ii) be granted as promptly as reasonably practicable, and in any event within two Business Days, or such shorter period as may be warranted due to exigent circumstances):
(a) With respect cause or permit any amendments to Indirect Parent, Second Intermediary Parent, First Intermediary Parent its certificate of incorporation or Parent, waive any stock repurchase rights, accelerate, amend by-laws (or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans to any employee, consultant or director of the Company, except as provided for under this Agreement or the attached exhibitscomparable organizational documents);
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing or made available to Purchaser, or adopt any new severance plan, or amend or modify or alter in any manner any severance plan, agreement or arrangement existing on the date hereof or hire any new employees or consultants;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify any rights to the Company Intellectual Property, or enter into grants to transfer or license to any person future patent rights;
(d) Declare, set aside declare or pay any dividends dividend on or make any other distributions payment, dividend or distribution (whether in cash, stock, equity securities stock or property) in respect of any capital stock of its Equity Securities, or split, combine or reclassify any capital stock of its Equity Securities or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its Equity Securities; provided, however, that the Company or either Company Subsidiary may declare or pay cash dividends, so long as such dividends will not impair the obligation of the Company and the Company Subsidiaries to satisfy the Minimum Capital Requirements;
(c) except as expressly contemplated by Section 1.6(d), accelerate, amend or change the period of exercisability or vesting of options or other rights granted under its stock plans or authorize cash payments in exchange for any capital stockoptions or other rights granted under any of such plans;
(d) enter into any Contract or commitment, or amend or otherwise modify or waive any of the terms of any of its Contracts, other than (i) Contracts with providers (other than any Affiliate or Associate of the Company or either Company Subsidiary) entered into in the ordinary course of business which (A) involve total obligations of less than $1,000,000 per annum in the case of any provider that is a hospital or similar facility, or $150,000 per annum in the case of any other provider, and (B) have a term of not more than one year and (ii) Contracts (excluding Contracts with providers) which involve total obligations of less than $50,000 per annum and which are not otherwise material to the business of the Company or the contracting Company Subsidiary, as applicable;
(e) Purchaseissue, redeem deliver or otherwise acquiresell or authorize or propose the issuance, directly delivery or indirectlysale of, any shares of capital stock of Company;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber or propose any of the foregoing with respect to any shares of capital stockEquity Securities, or enter into other agreements or commitments of any character obligating it to issue any such sharesshares or other convertible securities;
(f) transfer to any person or entity any rights to any Intellectual Property other than non-exclusive licenses in connection with the provision of services or benefits in the ordinary course of business;
(g) Causesell, permit lease, license or propose otherwise dispose of or encumber any amendments to of its Assets and Properties, other than transactions in connection with cash management and investment activities entered into in the ordinary course of business, consistent with past practice, provided that the Company Charter Documentsspecifically notifies Parent of all such transactions in excess of $100,000;
(h) Acquire acquire any Assets and Properties from any other Person, other than acquisitions in the ordinary course of business, consistent with past practice, not to exceed $100,000 in the aggregate during any month;
(i) incur any Indebtedness, other than Indebtedness incurred in the ordinary course of business, consistent with past practice, not to exceed $50,000 in any instance or $100,000 in the aggregate during any month;
(j) enter into any operating lease, other than in the ordinary course of business, consistent with past practice, and providing for payments of not greater than $50,000 over the term of the lease in any instance or $100,000 in the aggregate during any month;
(k) pay, discharge or satisfy any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise) arising other than in the ordinary course of business, other than the payment, discharge or satisfaction of liabilities reflected or reserved against in the Companies' Financials and reasonable expenses incurred in connection with the transactions contemplated by this Agreement;
(l) make any capital expenditures, capital additions or capital improvements, other than in the ordinary course of business, consistent with past practice, not to exceed $50,000 in any instance or $100,000 in the aggregate during any month;
(m) reduce the amount of any insurance coverage provided by existing insurance policies, or fail to renew any such insurance policy;
(n) terminate or waive any right of substantial value;
(o) (i) adopt or amend any employee benefit or stock purchase or option plan, (ii) hire any new director level or officer level consultant or employee, (iii) pay any special bonus or special remuneration to any employee, consultant or director or (iv) increase the salaries, wage rates, bonus levels, benefits, severance, termination pay, perquisites or compensation of any employee or consultant, other than increases in salaries or wage rates to non-director level or non-officer level employees, on an individual basis, in the ordinary course of business consistent with past practice;
(p) establish or modify any targets, goals, pools or similar provisions under any Plan, employment Contract or other employee compensation arrangement or independent contractor Contract or other compensation arrangement;
(q) commence a lawsuit other than (i) for the routine collection of bills, (ii) in such cases where it in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided that it consults with Parent prior to the filing of such a suit, or (iii) for a breach of this Agreement;
(r) acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a substantial portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to enter into any joint ventures, strategic partnerships or alliances;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory in the ordinary course of business consistent with past practice;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than in connection with the financing of ordinary course trade payables by Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parent;
(k) Adopt or amend any material employee policy or arrangement, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director or employee, or, except in the ordinary course of business consistent with past practice, increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultants;
(i) pay, discharge, settle or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), or litigation (whether or not commenced prior to the date of this Agreement) other than the payment, discharge, settlement or satisfaction, in the ordinary course of business consistent with past practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company as provided to the Purchasers or incurred since the date of such financial statements, or (ii) waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any confidentiality or similar agreement to which Company is a party or of which Company is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business in excess of $10,000;
(n) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any Material Contract or agreement to which Company is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into, renew or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company other than renewals of existing nonexclusive contracts, agreements or obligations;
(p) Except as required by GAAP, revalue any of its assets or make any change in accounting methods, principles or practices;
(q) Incur or enter into any agreement, contract or commitment requiring Company to pay in excess of $10,000, excluding routine purchase orders consistent with past practices;
(r) Settle any material litigation;
(s) Make make or change any election in respect of Taxes, adopt or change any accounting method in respect of Taxes, file any Tax Returns Return or any amendment to a Tax Return (except for any Tax Return other than in a manner consistent with prior practicesreturn that relates to the 2001 taxable period), enter into any closing agreement, settle any claim or assessment in respects respect of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes;
(t) Agree make any change in accounting policies, principles, methods, practices or procedures (including for bad debts, contingent liabilities or otherwise, respecting capitalization or expense of research and development expenditures, depreciation or amortization rates or timing of recognition of income and expense);
(u) revalue any of its assets, including writing off notes or accounts receivable or writing down any other assets;
(i) enter into any Contract with any Affiliate or Associate of the Company or either Company Subsidiary, (ii) enter into any other transaction which, if it had been entered into prior to the date hereof, would be required to be disclosed pursuant to Section 2.34, or (iii) make any payment to any Affiliate or Associate of the Company or either Company Subsidiary, other than payments required to be made pursuant to the express terms of any written Contract listed on Schedule 4.1;
(w) fail to maintain or renew any Permits, fail to comply with any Law or Order in any material respect, or violate any Designated Contract in any material respect;
(x) take or agree in writing or otherwise to take take, any of the actions described in Section Sections 5.1(a) through (sw) above.
Appears in 1 contract
Conduct Prior to the Effective Time. 5.1 4.1 Conduct of Business by Company, Indirect Parent, Second Intermediary -------------------------------------------------------------------- Parent, First Intermediary Parent Company and ParentEneco. During the period from the date -------------------------------------------- of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective TimeClosing, Indirect Parent, Second Intermediary Parent, First Intermediary Parent and Parent shall cause each of the Company to and the Company Eneco shall, except to the extent that Purchaser the other party shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed)writing, carry on its business, business in the usual, regular and ordinary coursecourse consistent with past practices, in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulationsregulations (except where noncompliance would not have a Material Adverse Effect), pay its debts and taxes when due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve substantially intact its present business organization, (ii) keep available the services of its present officers and employees and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has significant business dealings. In addition, except as required or permitted by the terms of this Agreement, and the transactions contemplated hereby, without the prior written consent of Purchaserthe other party, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective TimeClosing, neither Indirect Parent, Second Intermediary Parent, First Intermediary Parent nor Parent shall permit each of the Company to, and Company Eneco shall not do any of the following:
(a) With respect to Indirect Parent, Second Intermediary Parent, First Intermediary Parent or ParentExcept as disclosed on Schedule 4.1(a), waive any stock repurchase rights, accelerate, amend or (except as specifically provided for herein) change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans to any employee, consultant or director of the Company, except as provided for under this Agreement or the attached exhibitsplans;
(b) Grant any severance or termination pay to any officer or employee except pursuant to applicable law, written agreements outstanding, or policies existing, existing on the date hereof and as previously or concurrently disclosed in writing or made available to Purchaserthe other party, or adopt any new severance plan, or amend or modify or alter in any manner any severance plan, agreement or arrangement existing on the date hereof or hire any new employees or consultantshereof;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify any material rights to any Intellectual Property of the Company Intellectual Propertyor Eneco, as applicable, or enter into grants to transfer or license to any person future patent rights, other than in the ordinary course of business consistent with past practices provided that in no event shall the Company or Eneco license on an exclusive basis or sell any Intellectual Property of the Company, or Eneco as applicable;
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock, except for the conversion of the outstanding Eneco Preferred Stock by Eneco prior to Closing and the issuance of any convertible notes by Eneco pursuant to the terms and conditions of Eneco's current note offering;
(e) PurchaseExcept as set forth in Schedule 4.1(e) hereof, purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Companythe Company and Eneco, as applicable, except repurchases of unvested shares at cost in connection with the termination of the employment relationship with any employee pursuant to stock option or purchase agreements in effect on the date hereof;
(f) IssueExcept for the conversion of the outstanding Eneco Preferred Stock by Eneco prior to Closing and the issuance of any convertible notes by Eneco pursuant to the terms and conditions of Eneco's current note offering, issue, deliver, sell, authorize, pledge or otherwise encumber encumber, or propose agree to any of the foregoing with respect to, any shares of capital stock or any securities convertible into or exchangeable for shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into or exchangeable for shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such sharesshares or convertible or exchangeable securities;
(g) Cause, permit or propose any amendments Amend its Charter Documents (except for the amendment to the Company Charter DocumentsEneco's articles of incorporation to increase its authorized shares of common stock from 25,000,000 shares to 75,000,000 shares);
(h) Acquire Except as disclosed in Schedule 4.1(h) hereto, acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of Eneco or the Company as applicable, or enter into any joint ventures, strategic partnerships or alliancesalliances or other arrangements that provide for exclusivity of territory or otherwise restrict such party's ability to compete or to offer or sell any products or services;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets assets, except sales of inventory in the ordinary course of business consistent with past practicepractice and, except for the sale, lease or disposition (other than through licensing) of property or assets which are not material, individually or in the aggregate, to the business of such party;
(j) Incur Except as disclosed in Schedule 4.1(j) hereto and the issuance of any convertible notes by Eneco pursuant to the terms and conditions of Eneco's current note offering, incur any indebtedness for borrowed money in excess of $50,000 in the aggregate or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Eneco or the Company, as applicable, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than in connection with the financing of ordinary course trade payables by Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parentforegoing;
(k) Adopt Except as disclosed in Schedule 4.1(k) hereto or as contemplated by this Agreement, adopt or amend any material employee benefit plan, policy or arrangement, any employee stock purchase or employee stock option plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director or employee, or, except in the ordinary course of business consistent with past practice, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultants, except in the ordinary course of business consistent with past practices;
(l) Except as disclosed in Schedule 4.1
(1) hereto, (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), or litigation (whether or not commenced prior to the date of this Agreement) other than the payment, discharge, settlement or satisfaction, in the ordinary course of business consistent with past practice practices or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of the Company or of Eneco included in Eneco SEC Reports, as provided to the Purchasers applicable, or incurred since the date of such financial statements, or (ii) waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any confidentiality or similar agreement to which the Company is a party or of which the Company is a beneficiary or to which Eneco is a party or of which Eneco is a beneficiary, as applicable;
(m) Make any individual or series of related payments outside of the ordinary course of business in excess of $10,000;
(nExcept as disclosed on Schedule 4.2(m) Except and except in the ordinary course of business consistent with past practicepractices, modify, amend or terminate any Material Contract of the Company, or Eneco, as applicable, or other material contract or material agreement to which Company the Company, or Eneco is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into, renew or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company other than renewals of existing nonexclusive contracts, agreements or obligations;
(pn) Except as required by U.S. GAAP, revalue any of its assets or make any change in accounting methods, principles or practices;
(qo) Incur Except as set forth in Schedule 4.1(o) hereto or in the ordinary course of business consistent with past practices, incur or enter into any agreement, contract or commitment requiring Company such party to pay in excess of $10,00050,000 in any 12 month period;
(p) Engage in any action that could reasonably be expected to cause the Transaction to fail to qualify as a "reorganization" under Section 368(a) of the Code;
(q) Except as contemplated by Article V herein or as set forth in Schedule 4.1(q) hereto, excluding routine purchase orders consistent with past practicessettle any litigation;
(r) Settle Make or rescind any Tax elections that, individually or in the aggregate, could be reasonably likely to adversely affect in any material litigationrespect the Tax liability or Tax attributes of such party, settle or compromise any material income tax liability or, except as required by applicable law, materially change any method of accounting for Tax purposes or prepare or file any Return in a manner inconsistent with past practice;
(s) Make Form, establish or change acquire any election in respect of Taxes, adopt or change any accounting method in respect of Taxes, file any Tax Returns or any amendment to any Tax Return other than in a manner consistent with prior practices, enter into any closing agreement, settle any claim or assessment in respects of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of TaxesSubsidiary;
(t) Permit any Person to exercise any of its discretionary rights under any Plan to provide for the automatic acceleration of any outstanding options, the termination of any outstanding repurchase rights or the termination of any cancellation rights issued pursuant to such plans; or
(u) Agree in writing or otherwise agree, commit or resolve to take any of the actions described in Section 5.1(a4.1 (a) through (st) above.
Appears in 1 contract
Samples: Merger Agreement (Wentworth I Inc)
Conduct Prior to the Effective Time. 5.1 Conduct of Business by of the Company, Indirect Parent, Second Intermediary -------------------------------------------------------------------- Parent, First Intermediary Parent and Parent. During the period from the date -------------------------------------------- of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, Indirect Parent, Second Intermediary Parent, First Intermediary Parent and Parent shall cause the Company to and the Company shall, except to the extent that Purchaser shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), carry on its business, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulations, pay its debts and taxes when due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has significant business dealings. In addition, except as permitted by the terms of this Agreement, and the transactions contemplated hereby, without the prior written consent of Purchaser, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, neither Indirect Parentthe Company agrees, Second Intermediary Parent, First Intermediary Parent nor (i) except to the extent that Parent shall permit otherwise consent in writing or, (ii) required by this Agreement to carry on the Company's business in the usual, regular and ordinary course in substantially the same manner as heretofore conducted, to pay the debts and Taxes of the Company towhen due, to pay or perform other obligations when due, and, to the extent consistent with such business, use its commercially reasonable efforts consistent with past practice and Company shall not do any of policies to preserve intact the following:
(a) With respect to Indirect ParentCompany's present business organizations, Second Intermediary Parent, First Intermediary Parent or Parent, waive any stock repurchase rights, accelerate, amend or change keep available the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans to any employee, consultant or director services of the Company's present officers and key employees and preserve the Company's relationships with customers, except suppliers, distributors, licensors, licensees, and others having business dealings with it, all with the goal of preserving the Company's goodwill and ongoing businesses at the Effective Time. Except as provided for under expressly required by this Agreement or Agreement, the attached exhibits;
Company shall not, without the prior written consent of Parent (b) Grant which consent shall not be unreasonably withheld): make any severance or termination pay to any officer or employee except expenditures, other than pursuant to written agreements outstandingexisting obligations and other than with respect to trade creditors in the ordinary course, or policies existingenter into any commitment or transaction exceeding $10,000 individually or in the aggregate or any commitment or transaction of the type described in Section 2.8 hereof; (i) except for in the ordinary course of business, on the date hereof and as previously disclosed in writing sell, license or made available to Purchaser, or adopt any new severance plan, or amend or modify or alter in any manner any severance plan, agreement or arrangement existing on the date hereof or hire any new employees or consultants;
(c) Transfer or license transfer to any person or entity or otherwise extend, amend or modify any rights to the any Company Intellectual Property, Property or enter into grants any agreement with respect to transfer any Company Intellectual Property with any person or entity or with respect to any Intellectual Property of any person or entity, (ii) buy or license any Intellectual Property or enter into any agreement with respect to the Intellectual Property of any person or entity, (iii) enter into any agreement with respect to the development of any Intellectual Property with a third party, (iv) or change pricing or royalties charged by the Company to its customers or licensees, or the pricing or royalties set or charged by persons who have licensed Intellectual Property to the Company; enter into or amend any Contract pursuant to which any other party is granted marketing, distribution, development or similar rights of any type or scope with respect to any person future patent rights;
products or technology of the Company; amend or otherwise modify (d) Declareor agree to do so), or violate the terms of, any of the Contracts set forth or described in the Company Disclosure Schedule; commence or settle any litigation; declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities stock or property) in respect of any capital stock Company Common or Preferred Stock, or split, combine or reclassify any capital stock Company Common or Preferred Stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock;
(e) Purchaseshares of Company Common or Preferred Stock, or repurchase, redeem or otherwise acquire, directly or indirectly, any shares of capital Company Common or Preferred Stock (or options, warrants or other rights exercisable therefor) other than in accordance (i) with the agreements evidencing Company Options or restricted stock awards, (ii) the issuance of Company;
Company Common Stock upon the exercise of warrants outstanding as of the date hereof, and (fiii) Issuethe issuance of Company Common Stock upon conversion of Company Preferred Stock. issue, delivergrant, sell, authorize, pledge deliver or otherwise encumber sell or authorize or propose any of the foregoing with respect to issuance, grant, delivery or sale of, or purchase or propose the purchase of, any shares of capital stockstock of the Company or securities convertible into, or enter into subscriptions, rights, warrants or options to acquire, or other agreements or commitments of any character obligating it to issue or purchase any such shares;
shares or other convertible securities other than in accordance (gi) Causewith the agreements evidencing Company Options or restricted stock awards, (ii) the issuance of Company Common Stock upon the exercise of warrants outstanding as of the date hereof, and (iii) the issuance of Company Common Stock upon conversion of Company Preferred Stock. cause or permit or propose any amendments to its articles of incorporation, bylaws or other organizational documents of the Company Charter Documents;
(h) Acquire except for amendment by the Sixth Amended and Restated Articles of Incorporation of Company); acquire or agree to acquire by merging or consolidating with, or by purchasing any assets or equity interest in or a portion of the assets securities of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to enter into acquire any joint venturesassets which are material, strategic partnerships individually or alliances;
(iin the aggregate, to the Company's business; except as allowed pursuant to Section 4.1(b) Sellhereof, sell, lease, license, encumber license or otherwise dispose of any of its properties or assets, except properties or assets except sales of inventory which are not Intellectual Property and only in the ordinary course of business and consistent with past practice;
(j) Incur practices; incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, or issue or sell any debt securities or options, warrants, calls or other rights to acquire guarantee any debt securities of Company, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than in connection with the financing of ordinary course trade payables by Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parent;
others except for (ki) Adopt or amend any material employee policy or arrangement, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director or employee, or, except short-term unsecured borrowing incurred in the ordinary course of business consistent with past practice, and (ii) unsecured borrowings pursuant to existing credit facilities in the ordinary course of business, not in excess of $100,000; grant any loans to others or purchase debt securities of others or amend the terms of any outstanding loan agreement; grant any severance or termination pay (i) to any director or officer, or (ii) to any other employee or contract worker except payments made pursuant to standard written agreements outstanding prior to the date hereof or disclosed in the Company Disclosure Schedule; except as required to comply with applicable law, and except for the amendments to the Management Plan and the Severance Plan as set forth as Exhibits I and J, respectively, hereto adopt or amend any employee benefit plan, or enter into any employment contract, pay or agree to pay any special bonus or special remuneration to any director, employee or contract worker, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultants;
(i) contract workers except payments made pursuant to standard written agreements in place prior to the date hereof or disclosed in the Company Disclosure Schedule; revalue any of its assets, including without limitation writing down the value of inventory or writing off notes or accounts receivable other than in the ordinary course of business; pay, dischargedischarge or satisfy, settle in an amount in excess of $10,000 in any one case, or satisfy in the aggregate, any claimsclaim, liabilities liability or obligations obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), or litigation (whether or not commenced prior to the date of this Agreement) other than the payment, discharge, settlement discharge or satisfaction, satisfaction in the ordinary course of business consistent with past practice of liabilities reflected or in accordance with their terms, or liabilities recognized or disclosed reserved against in the most recent consolidated financial statements (or the notes thereto) of Company as provided to the Purchasers or incurred since the date of such financial statements, or (ii) waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any confidentiality or similar agreement to which Company is a party or of which Company is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business in excess of $10,000;
(n) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any Material Contract or agreement to which Company is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into, renew or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company other than renewals of existing nonexclusive contracts, agreements or obligations;
(p) Except as required by GAAP, revalue any of its assets or Current Balance Sheet; make any change in accounting methods, principles or practices;
(q) Incur or enter into any agreement, contract or commitment requiring Company to pay in excess of $10,000, excluding routine purchase orders consistent with past practices;
(r) Settle any material litigation;
(s) Make or change any material election in respect of Taxes, adopt or change any accounting method in respect of Taxes, file any Tax Returns or any amendment to any Tax Return other than in a manner consistent with prior practices, enter into any closing agreement, settle any claim or assessment in respects respect of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes;
(t) Agree ; enter into any strategic alliance or joint marketing arrangement or agreement; take any action to accelerate the vesting schedule of any of the outstanding Company Options or Company Common or Preferred Stock; hire or terminate any employees or contract workers, or encourage any employees or contract workers to resign from the Company; or take, or agree in writing or otherwise to take take, any of the actions described in Section 5.1(aSections 4.1(a) through 4.1(t) hereof, or any other action that would (si) aboveprevent the Company from performing or cause the Company not to perform their respective covenants hereunder or (ii) cause or result in any or their respective representations and warranties contained herein being untrue or incorrect.
Appears in 1 contract
Samples: Agreement and Plan of Reorganization (Cell Genesys Inc)
Conduct Prior to the Effective Time. 5.1 Section 4.1 Conduct of Business by Company, Indirect Parent, Second Intermediary -------------------------------------------------------------------- Parent, First Intermediary Parent and Parent. During the period from the date -------------------------------------------- of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, Indirect Parent, Second Intermediary Parent, First Intermediary Parent and Parent shall cause the Company to and the Company shall, except to the extent that Purchaser shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), carry on its business, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulations, pay its debts and taxes when due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has significant business dealingsCompany. In addition, except as permitted by the terms of this Agreement, and the transactions contemplated hereby, without the prior written consent of Purchaser, during 26 During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, neither Indirect the Company agrees (except to the extent that Parent shall otherwise consent in writing, which consent shall not be unreasonably withheld) to carry on its business in the usual, regular and ordinary course in substantially the same manner as currently conducted, to pay its debts and Taxes when due, to pay or perform all other obligations when due, and, to the extent consistent with such business, to use all reasonable efforts consistent with past practice and policies to preserve intact its present business organization, keep available the services of its present officers and key employees, and preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others having business dealings with it, all with the goal of preserving unimpaired the Company’s goodwill and ongo ing businesses at the Effective Time. The Company shall promptly notify Parent of any event or occurrence which could reasonably be expected to have a Material Adverse Effect on the Company. Except as expressly contemplated by this Agreement, the Company shall not, without the prior written consent of Parent, Second Intermediary Parent, First Intermediary Parent nor Parent shall permit the Company to, and Company which consent shall not do any of the followingbe unreasonably withheld:
(a) With respect to Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parent, waive Waive any stock repurchase rights, accelerate, amend amend, or change the period of exercisability of options any outstanding Company Options or restricted stockCompany Common Stock subject to vesting, or reprice options granted under any employee, consultant, director or other stock plans Company Options or authorize cash payments in exchange for any options granted under any of such plans to any employee, consultant or director of the Company, except as provided for under this Agreement or the attached exhibitsoutstanding options;
(b) Grant Make any severance payments or termination pay to enter into any officer commitment or employee except pursuant to written agreements outstandingtransaction, in each case outside of the ordinary course of the Company’s business in excess of $20,000 individually or policies existing, on $50,000 in the date hereof and as previously disclosed in writing or made available to Purchaser, or adopt any new severance plan, or amend or modify or alter in any manner any severance plan, agreement or arrangement existing on the date hereof or hire any new employees or consultantsaggregate;
(c) Enter into or amend any agreements to which any other party is granted marketing, distribution, or similar rights of any type or scope with respect to any products of the Company;
(d) Modify or amend any material term or terminate any material contract or agreement to which the Company is a party or waive, release, or assign any material rights or claims under such agreement;
(e) Transfer or license to any person or entity or otherwise extend, amend or modify any rights Company Intellectual Property Rights (other than pursuant to end-user licenses granted to customers of the Company Intellectual Propertyin the ordinary and usual course of business, or enter into grants to transfer or license to any person future patent rightsconsistent with past practice);
(df) Amend or otherwise modify (or agree to do so), or violate the terms of, any of the Contracts;
(g) Commence any litigation except to enforce its rights under this Agreement or under any agreements related to this Agreement;
(h) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities stock or property) in respect of any capital stock Company Capital Stock, or split, combine or reclassify any capital stock Company Capital Stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stockCompany Capital Stock;
(ei) Purchase, redeem or otherwise acquire, directly or indirectly, any Company Capital Stock, Company Options, or any other outstanding securities of the Company, except repurchases of unvested shares at cost in connection with the termination of capital the employment relationship with any employee pursuant to stock option or stock purchase agreements in effect on the date of Companythis Agreement;
(fj) Issue, delivergrant, sell, authorize, pledge deliver or otherwise encumber sell or authorize or propose any of the foregoing with respect to any shares of capital stockissuance, grant, delivery or sale of, or enter into purchase or propose the purchase of, any Company Capital Stock or securities convertible into, or subscriptions, rights, warrants or options to acquire, or other agreements or commitments of any character obligating it to issue any such sharesshares or other convertible securities (except for the issuance of up to 605,000 options to purchase Company Common in the aggregate, or 30,000 options per individual option grant (the “Additional Permitted Options”) at an exercise price no less than the product obtained by multiplying (1) the Pre-Closing Trading Price of Parent Common Stock by (2) the Exchange Ratio (assuming, for purposes of determining the Exchange Ratio for this calculation only, that the Effective Time is the time of the grant of such option) to Company employees hired after th e date of this Agreement in the ordinary course of business and consistent with past practice and the issuance of any Company Common upon exercise of presently outstanding Company Options or conversion of presently outstanding Company Preferred;
(gk) Cause, Cause or permit or propose any amendments to the Company Charter Documents;Restated Certificate or the Company’s Bylaws; 27
(hl) Acquire or agree to acquire by merging or consolidating with, or by purchasing any assets or equity interest in or a portion of the assets securities of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to enter into acquire any joint ventures, strategic partnerships assets in an amount in excess of $20,000 in the case of a single transaction or alliancesin excess of $50,000 in the aggregate in any 30-day period;
(im) Sell, lease, license, encumber or otherwise dispose of any of its properties or assets assets, except sales of inventory in the ordinary and usual course of business business, consistent with past practice;
(jn) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, or issue or sell any debt securities of the Company or options, warrants, calls or other rights to acquire guarantee any debt securities of Companyothers, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect except for indebtedness in an aggregate amount of any of the foregoing other less than in connection with the financing of ordinary course trade payables by Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parent$50,000;
(ko) Grant any severance or termination pay to, or enter any agreement pertaining thereto with, any officer, director, consultant, or employee, except payments made pursuant to written agreements outstanding on the date of this Agreement and disclosed in the Company Schedules, or adopt any new severance plan;
(p) Adopt or amend any material employee policy or arrangementbenefit plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business and consistent with past practice with employees who are terminable "at will"practice), pay or agree to pay any special bonus or special remuneration to any director or employeeofficer, or, except in the ordinary course of business and consistent with past practice, increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its employees;
(q) Effect or agree to effect, including by way of hiring or involuntary termination, any change in the Company’s directors, officers, employees or consultantskey employees;
(ir) payRevalue any of its assets, dischargeincluding without limitation writing down the value of inventory or writing off notes or accounts receivable;
(s) Pay, settle discharge or satisfy satisfy, in an amount in excess of $20,000 (in any claimsone case) or $50,000 (in the aggregate), liabilities any claim, liability or obligations obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), or litigation (whether or not commenced prior to the date of this Agreement) other than the payment, discharge, settlement discharge or satisfaction, satisfaction in the ordinary and usual course of business business, consistent with past practice practice, of liabilities reflected or in accordance with their terms, or liabilities recognized or disclosed reserved against in the most recent consolidated financial statements Company Financial Statements (or the notes thereto) of Company as provided to the Purchasers or incurred since the date of such financial statements, or (ii) waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any confidentiality or similar agreement to which Company is a party or of which Company is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business in excess of $10,000;
(n) Except that arose in the ordinary and usual course of business business, consistent with past practice, modifysubsequent to July 31, amend or terminate any Material Contract or agreement to which Company is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder2000;
(o) Enter into, renew or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company other than renewals of existing nonexclusive contracts, agreements or obligations;
(p) Except as required by GAAP, revalue any of its assets or make any change in accounting methods, principles or practices;
(q) Incur or enter into any agreement, contract or commitment requiring Company to pay in excess of $10,000, excluding routine purchase orders consistent with past practices;
(r) Settle any material litigation;
(st) Make or change any material election in respect of Taxes, adopt or change any accounting method in respect of Taxes, file any Tax Returns or any amendment to any Tax Return other than in a manner consistent with prior practices, enter into any closing agreement, settle any claim or assessment in respects respect of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of to Taxes;
(tu) Agree Enter into any strategic alliance, joint development or joint marketing agreement;
(v) Engage in any action with the intent to directly or indirectly adversely impact any of the transactions contemplated by this Agreement; or
(w) Take, agree in writing or otherwise to take take, any of the actions described in Section 5.1(aSections 4.1(a) through (sv) above, or any other action that would prevent the Company from performing or cause the Company not to perform its covenants under this Agreement.
Appears in 1 contract
Samples: Merger Agreement (Inktomi Corp)
Conduct Prior to the Effective Time. 5.1 4.1 Conduct of Business by Companythe Business; Notices. Except as expressly set forth in Schedule V, Indirect ParentSchedule VI, Second Intermediary -------------------------------------------------------------------- Parentand Section 5.20, First Intermediary Parent and Parent. During during the period from the date -------------------------------------------- of this Agreement Date and continuing until the earlier of the termination of this Agreement pursuant to its terms or and the Effective Time, Indirect Parent, Second Intermediary Parent, First Intermediary Parent and Parent shall cause the Company to and the Company shall, :
(a) conduct the Business solely in the ordinary course consistent with past practice (except to the extent that Purchaser shall expressly provided otherwise consent herein or as consented to in writing (which consent shall not be unreasonably withheld or delayed), carry on its business, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted by Acquirer) and in compliance with Applicable Law;
(i) pay and perform all applicable laws and regulations, pay of its undisputed debts and taxes when due subject to good faith disputes over such debts or taxes, pay or perform other material obligations (including Taxes) when due, (ii) use commercially reasonable efforts consistent with past practice and policies to collect accounts receivable when due and not extend credit outside of the ordinary course of business consistent with past practice, (iii) sell the Company’s products and services consistent with past practice as to discounting, license, service and maintenance terms, incentive programs and revenue recognition and other terms and (iv) use its commercially reasonable efforts consistent with past practices practice and policies to (i) preserve intact its present business organizationorganizations, (ii) keep available the services of its present officers and key employees and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others having business dealings with it, to the end that its goodwill and ongoing businesses shall be unimpaired at the Closing;
(c) assure that each of its Contracts (other than with Acquirer) entered into after the Agreement Date will not require the procurement of any consent, waiver or novation or provide for any change in the obligations of any party thereto in connection with, or terminate as a result of the consummation of, the Transactions, and shall give reasonable advance notice to Acquirer prior to allowing any Material Contract or right thereunder to lapse or terminate by its terms;
(d) maintain each of its leased premises in accordance with the terms of the applicable lease;
(e) promptly notify Acquirer of any notice or other communication from any Person alleging that the consent of such Person is or may be required in connection with the Transactions;
(f) promptly notify Acquirer of any notice or other communication from any Governmental Entity (i) relating to the Transactions, (ii) indicating that a Company Authorization has been or is about to be revoked or (iii) indicating that a Company Authorization is required in any jurisdiction in which it such Company Authorization has significant business dealingsnot been obtained, which revocation or failure to obtain has had or would reasonably be expected to be material to Acquirer (following the Effective Time) or the Company;
(g) promptly notify Acquirer of any inaccuracy in or breach of any representation, warranty or covenant of the Company herein; provided that the phrase “as of the Agreement Date” in any such representation or warranty shall be disregarded for such purpose; and
(h) to the extent not otherwise required by this Section 4.1, promptly notify Acquirer of any change, occurrence or event not in the ordinary course of business, or of any change, occurrence or event that, individually or in the aggregate with any other changes, occurrences and events, would reasonably be expected to be materially adverse to the Company or cause any of the conditions to the Closing set forth in Article VI not to be satisfied. In additionFor clarity, any actions taken by the Company in compliance with written instructions from Acquirer shall not be deemed a breach by the Company of this Section 4.1.
4.2 Restrictions on Conduct of the Business. Without limiting the generality or effect of the Section 4.1, except as permitted by expressly set forth on Schedule 4.2 of the terms of this AgreementCompany Disclosure Letter, Schedule V, Schedule VI, and the transactions contemplated hereby, without the prior written consent of PurchaserSection 5.20, during the period from the date of this Agreement Date and continuing until the earlier of the termination of this Agreement pursuant to its terms or and the Effective Time, neither Indirect Parent, Second Intermediary Parent, First Intermediary Parent nor Parent shall permit the Company to, and Company shall not do do, cause or permit any of the following:
following (a) With respect except to Indirect Parent, Second Intermediary Parent, First Intermediary Parent the extent expressly provided otherwise herein or Parent, waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans as consented to any employee, consultant or director of the Company, except as provided for under this Agreement or the attached exhibits;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing or made available to Purchaser, or adopt any new severance plan, or amend or modify or alter in any manner any severance plan, agreement or arrangement existing on the date hereof or hire any new employees or consultants;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify any rights to the Company Intellectual Property, or enter into grants to transfer or license to any person future patent rights;
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber or propose any of the foregoing with respect to any shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares;
(g) Cause, permit or propose any amendments to the Company Charter Documents;
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to enter into any joint ventures, strategic partnerships or alliances;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory in the ordinary course of business consistent with past practice;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than in connection with the financing of ordinary course trade payables by Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parent;
(k) Adopt or amend any material employee policy or arrangement, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director or employee, or, except in the ordinary course of business consistent with past practice, increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultants;
(i) pay, discharge, settle or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), or litigation (whether or not commenced prior to the date of this Agreement) other than the payment, discharge, settlement or satisfaction, in the ordinary course of business consistent with past practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company as provided to the Purchasers or incurred since the date of such financial statements, or (ii) waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any confidentiality or similar agreement to which Company is a party or of which Company is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business in excess of $10,000;
(n) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any Material Contract or agreement to which Company is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into, renew or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company other than renewals of existing nonexclusive contracts, agreements or obligations;
(p) Except as required by GAAP, revalue any of its assets or make any change in accounting methods, principles or practices;
(q) Incur or enter into any agreement, contract or commitment requiring Company to pay in excess of $10,000, excluding routine purchase orders consistent with past practices;
(r) Settle any material litigation;
(s) Make or change any election in respect of Taxes, adopt or change any accounting method in respect of Taxes, file any Tax Returns or any amendment to any Tax Return other than in a manner consistent with prior practices, enter into any closing agreement, settle any claim or assessment in respects of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes;
(t) Agree in writing or otherwise to take any of the actions described in Section 5.1(a) through (s) above.Acquirer):
Appears in 1 contract
Samples: Merger Agreement
Conduct Prior to the Effective Time. 5.1 4.1 Conduct of Business by Company, Indirect Parent, Second Intermediary -------------------------------------------------------------------- Parent, First Intermediary Parent of the Company and Business of Parent. During the period from the date -------------------------------------------- of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, Indirect Parent, Second Intermediary Parent, First Intermediary Parent and Parent shall cause the Company to and the Company shall, except to the extent that Purchaser shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), carry on its business, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulations, pay its debts and taxes when due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has significant business dealings. In addition, except as permitted by the terms of this Agreement, and the transactions contemplated hereby, without the prior written consent of Purchaser, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, neither Indirect Parent, Second Intermediary Parent, First Intermediary Parent nor Parent shall permit the Company to, and Company shall not do any of the following:
(a) With respect the Company agrees to Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parent, waive any stock repurchase rights, accelerate, amend or change operate the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans to any employee, consultant or director business of the CompanyCompany in the usual, regular and ordinary course in substantially the same manner as heretofore conducted, except as provided for under expressly contemplated by this Agreement or the attached exhibits;
otherwise consented to by Parent in writing and (b) Grant any severance or termination pay Parent agrees to any officer or employee operate the business of Parent in the usual, regular and ordinary course in substantially the same manner as heretofore conducted, except pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing or made available to Purchaser, or adopt any new severance plan, or amend or modify or alter in any manner any severance plan, agreement or arrangement existing on the date hereof or hire any new employees or consultants;
(c) Transfer or license to any person or entity expressly contemplated by this Agreement or otherwise extend, amend or modify any rights consented to by the Company in writing. The Company and Parent each further agree to pay their respective debts and Taxes when due, to pay or perform all other obligations when due (including pay accounts payable without extension), to use their commercially reasonable efforts to preserve intact their present respective business organizations, to preserve their respective cash in accordance with past practice, to use their commercially reasonable efforts to promptly collect all their respective receivables, to use their commercially reasonable efforts to keep available the services of their present respective officers and employees (other than termination for cause following notice to and consultation with one another), to use their commercially reasonable efforts to preserve and maintain in full force and effect all Owned Company Intellectual PropertyProperty and Owned Parent Intellectual Property (respectively), or enter into grants to transfer or license timely pay all fees, costs, royalties, and expenses relating to any person future patent rights;
Owned Company Intellectual Property and Owned Parent Intellectual Property (d) Declarerespectively), set aside or and to timely file and pay any dividends on or make any other distributions for all applications, statements, documents, extensions, disclaimers, and registrations relating to Owned Company Intellectual Property and Owned Parent Intellectual Property (whether in cashrespectively), stockand to preserve their respective relationships with customers, equity securities or property) in respect suppliers, distributors, licensors, licensees and others having business dealings with the Company and Parent, respectively. The Company shall promptly notify Parent of any capital stock event or split, combine occurrence or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber or propose any of the foregoing with respect to any shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares;
(g) Cause, permit or propose any amendments to the Company Charter Documents;
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to enter into any joint ventures, strategic partnerships or alliances;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory emergency not in the ordinary course of business consistent with past practice;
(j) Incur of the Company and any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of material event involving the Company, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having and Parent shall promptly notify the economic effect Company of any of the foregoing other than in connection with the financing of ordinary course trade payables by Indirect Parent, Second Intermediary Parent, First Intermediary Parent event or Parent;
(k) Adopt occurrence or amend any material employee policy or arrangement, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into emergency not in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director or employee, or, except in the ordinary course of business consistent with past practice, increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultants;
(i) pay, discharge, settle or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), or litigation (whether or not commenced prior to the date of this Agreement) other than the payment, discharge, settlement or satisfaction, in the ordinary course of business consistent with past practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company as provided to the Purchasers or incurred since the date of such financial statements, or (ii) waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any confidentiality or similar agreement to which Company is a party or of which Company is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business in excess of $10,000;
(n) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any Material Contract or agreement to which Company is a party or waive, delay the exercise of, release or assign Parent and any material rights or claims thereunder;
(o) Enter into, renew or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company other than renewals of existing nonexclusive contracts, agreements or obligations;
(p) Except as required by GAAP, revalue any of its assets or make any change in accounting methods, principles or practices;
(q) Incur or enter into any agreement, contract or commitment requiring Company to pay in excess of $10,000, excluding routine purchase orders consistent with past practices;
(r) Settle any material litigation;
(s) Make or change any election in respect of Taxes, adopt or change any accounting method in respect of Taxes, file any Tax Returns or any amendment to any Tax Return other than in a manner consistent with prior practices, enter into any closing agreement, settle any claim or assessment in respects of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes;
(t) Agree in writing or otherwise to take any of the actions described in Section 5.1(a) through (s) aboveevent involving Parent.
Appears in 1 contract
Samples: Agreement and Plan of Merger (Ikena Oncology, Inc.)
Conduct Prior to the Effective Time. 5.1 4.1 Conduct of Business by the Company, Indirect Parent, Second Intermediary -------------------------------------------------------------------- Parent, First Intermediary Parent and Parent. During the period from the date -------------------------------------------- of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, Indirect Parent, Second Intermediary Parent, First Intermediary Parent and Parent shall cause the Company to and the Company each of its subsidiaries shall, except to the extent that Purchaser Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed)writing, and, except with respect to Discontinued Businesses, carry on its business, business in the usual, regular and ordinary course, in substantially the same manner as heretofore currently conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes Taxes when due subject to good faith disputes over such debts or taxesTaxes, pay or perform other material obligations when due, and use its commercially all reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers officers, employees and employees contractors and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, licensees and others with which it has significant business dealings. In addition, except as permitted by Without limiting the terms generality of this Agreement, and the transactions contemplated herebyforegoing, without the prior written consent of PurchaserParent, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, neither Indirect Parent, Second Intermediary Parent, First Intermediary Parent nor Parent shall permit the Company to, and Company shall not do any of the following:following and shall not permit its subsidiaries to do any of the following (except as expressly specified in Section 4.1 of the Company's Disclosure Letter or as may be expressly contemplated by this Agreement):
(a) With respect to Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parent, waive Waive any stock repurchase rights, take any action to accelerate, amend or change the period of vesting or exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans to any employeeplans, consultant or director except in connection with the termination of the Companyemployment relationship with any Employee, except as provided for under this Agreement or individually in an amount not to exceed $25,000 and in the attached exhibitsaggregate in an amount not to exceed $250,000;
(b) Adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization (other than the Merger);
(c) Grant any severance or termination pay to any officer employee, except as required by applicable law or employee except pursuant to written agreements outstanding, in effect or policies existing, existing on the date hereof and as previously disclosed in writing or made available to PurchaserParent, or adopt any new severance severance, retention or change in control plan, or amend or modify or alter in any manner any severance plan, agreement or arrangement existing on the date hereof or hire any new employees or consultantsexcept with respect to a Discontinued Business;
(cd) Transfer or license to any person or entity or otherwise extend, amend or modify in any rights to the material respect any Company Intellectual PropertyProperty Rights, other than nonexclusive licenses in the ordinary course of business consistent with past practice or enter into grants with respect to transfer or license to any person future patent rightsa Discontinued Business;
(de) Declare, set aside aside, or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock;
(ef) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Companythe Company or its subsidiaries, or any instrument or security that consists of a right to acquire such shares except repurchases of unvested shares at cost in connection with the termination of the employment relationship with any employee pursuant to stock option or purchase agreements in effect on the date hereof, and except for actions taken relating to the winding-up of non-U.S. subsidiaries;
(fg) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of capital stock or propose any securities convertible into shares of the foregoing with respect capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such sharesshares or convertible securities, other than the issuance, delivery and/or sale of (i) shares of the Company Common Stock pursuant to the exercise of stock options or warrants therefor outstanding as of the date hereof, and (ii) shares of the Company Common Stock issuable to participants in the ESPP consistent with the terms thereof;
(gh) Split, combine or reclassify any class of capital stock;
(i) Cause, permit or propose any amendments to the Company Charter Documentsits Certificate of Incorporation, Bylaws or other organizational documents;
(hj) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, ; or otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the Company or enter into any joint venturesany, strategic partnerships or alliances;
(ik) Sell, transfer, lease, licensemortgage, pledge, encumber or otherwise dispose of any properties or assets except sales of inventory which are material, individually or in the aggregate, to the Company, other than physical assets no longer in day-to-day use by the Company and other than in the ordinary course of business consistent with past practicepractice or with respect to a Discontinued Business;
(jl) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company, enter into any "keep well" or other agreement to maintain any financial statement condition condition, incur or modify any other material liability or enter into any arrangement having the economic effect of any of the foregoing other than in connection under existing arrangements with the financing of ordinary course trade payables by Indirect Parent, Second Intermediary Parent, First Intermediary Parent or ParentSilicon Valley Bank;
(km) Adopt or amend any material employee policy benefit plan or arrangementemployee stock purchase or employee stock option plan, or enter into any employment contract contract, consulting agreement or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director director, officer, consultant or employee, or, except in the ordinary course of business consistent with past practice, increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultants;
consultants (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), or litigation (whether or not commenced prior to the date of this Agreement) other than the payment, discharge, settlement increases to employees who are not directors or satisfaction, affiliates in the ordinary course of business business, consistent with past practice practice) make any loans to any of its officers, directors, employees, affiliates, agents or consultants or make any change in accordance with their terms, its existing borrowing or liabilities recognized lending arrangements for or disclosed in the most recent consolidated financial statements (or the notes thereto) on behalf of Company as provided to the Purchasers or incurred since the date any of such financial statementspersons, or (ii) waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any confidentiality or similar agreement to which Company is a party or of which Company is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business in excess of $10,000except as required by applicable law;
(n) Except in the ordinary course of business consistent with past practicepractice pursuant to the Company Employee Plans set forth in Section 2.12(c) of the Company Disclosure Letter, modify(i) pay or make any accrual or arrangement for payment of any pension, retirement allowance or other employee benefit pursuant to any existing plan, agreement or arrangement to any officer, director, employee or affiliate or pay or agree to pay or make any accrual or arrangement for payment to any officers, directors, employees or affiliates of the Company or any of its subsidiaries of any amount relating to unused vacation days; or (ii) adopt or pay, grant, issue, accelerate or accrue salary or other payments or benefits pursuant to any pension, profit-sharing, bonus, extra compensation, incentive, deferred compensation, stock purchase, stock option, stock appreciation right, group insurance, severance pay, retirement or other employee benefit plan, agreement or arrangement, or any employment or consulting agreement with or for the benefit of any Company or Company subsidiary director, officer, employee, agent or consultant, whether past or present, or amend in any material respect any such existing plan, agreement or arrangement in a manner inconsistent with the foregoing;
(o) Modify, amend or terminate any Material Contract material contract or agreement to which the Company or any subsidiary thereof is a party party, including, without limitation, any customer contract, leases, licensing, distribution, sponsorship, advertising, merchant program, encoding services, hosting or other similar agreement, or joint venture agreement involving annual revenues to the Company in excess of $100,000, or waive, delay the exercise of, release or assign any material rights or claims thereunder, other than any modification, amendment or termination of any such Company material contract in the ordinary course of business or consistent with past practice or with respect to a Discontinued Business;
(op) Enter intoSettle any claims, renew liabilities or materially modify obligations (whether absolute, accrued, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations, in the ordinary course of business consistent with past practice, or of claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company, or with respect to a Discontinued Business;
(q) Except in the ordinary course of business consistent with past practice, enter into any sponsorship, advertising, merchant program, encoding services, hosting or other similar contracts, agreements, or obligations relating which may not be canceled without penalty by the Company or its subsidiaries upon notice of 30 days or less or which provide for annual payments by or to the distribution, sale, license Company or marketing by third parties its subsidiaries in an amount in excess of Company's products $100,000 or products licensed by Company other than renewals which involve any exclusive terms of existing nonexclusive contracts, agreements or obligationsany kind;
(pr) Except Permit any insurance policy naming it as a beneficiary or a loss payee to be cancelled or terminated unless such insurance policy is replaced with a substantially equivalent policy;
(s) Materially revalue any of its assets or, except as required by GAAP, revalue any applicable accounting requirements or the published rules and regulations of its assets or make any change the SEC with respect thereto in accounting methods, principles or practiceseffect during the periods involved;
(qt) Incur or enter into any agreement, contract or commitment requiring Company to pay Except in excess the ordinary course of $10,000, excluding routine purchase orders business consistent with past practices;
(r) Settle any material litigation;
(s) Make practice, make or change any election in respect of TaxesTax election, change an annual accounting period, adopt or change any accounting method in respect of Taxesmethod, file any Tax Returns or any amendment to any Tax Return other than in a manner consistent with prior practicesamended Return, enter into any closing agreement, settle or consent to any Tax Claim, surrender any right to claim or assessment in respects a refund of Taxes, or consent to any extension or waiver of the limitation statutory period of limitations applicable to any claim or assessment in respect of TaxesTax Claim except as required by any Legal Requirement;
(tu) Agree Fail to make in a timely manner any filings with the SEC required under the Securities Act or the Exchange Act or the rules and regulations promulgated thereunder;
(v) Subject Parent or the Surviving Corporation or any of their respective subsidiaries to any non-compete or other material restriction on any of their respective businesses following the Closing;
(w) Enter into any agreement or commitment the effect of which would be to grant to a third party following the Merger any actual or potential right of license of any material Company Intellectual Property Rights owned by the Company or any of its subsidiaries;
(x) Waive any "standstill" or similar restrictions contained in any confidentiality or other agreements to which it is a party;
(y) Take any action that would or is reasonably likely to result in any of the conditions to the Merger set forth in Article VI not being satisfied, or would make any representation or warranty of the Company contained herein inaccurate in any material respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially adversely affect the ability of the Company to consummate the Merger within the time frame in which the Merger would otherwise be consummated in the absence of such action; or
(z) Enter into any written agreement, contract, commitment or arrangement to do any of the foregoing, or authorize, recommend, propose, in writing or otherwise announce an intention to take do any of the actions described in Section 5.1(a) through (s) aboveforegoing.
Appears in 1 contract
Samples: Merger Agreement (Inktomi Corp)
Conduct Prior to the Effective Time. 5.1 Conduct of Business by Company, Indirect Parent, Second Intermediary -------------------------------------------------------------------- Parent, First Intermediary Parent Company and Parent. During the period from the date -------------------------------------------- of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, Indirect Parent, Second Intermediary Parent, First Intermediary Parent Company and Parent shall cause the Company to and the Company each of its subsidiaries shall, except to the extent that Purchaser shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed)writing, carry on its business, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulations, pay its debts and taxes when due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) except after the terminations contemplated by Section 6.12, keep available the services of its present officers and employees and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has significant business dealings. In addition, except as permitted by the terms of this Agreement, and the transactions contemplated hereby, and except as provided in Section 5.1 of the Company Schedule, without the prior written consent of Purchaser, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, neither Indirect ParentCompany shall not, Second Intermediary Parentand with respect to Section 5.1(a) below, First Intermediary Parent nor Parent shall not permit Company or any of the Company Company's subsidiaries to, and Company shall not do any of the following:
(a) With respect to Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parent, waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans to any employee, consultant or director of the Company, except as provided for under this Agreement or the attached exhibits;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and except as contemplated by Section 6.12 hereof, and as previously disclosed in writing or made available to Purchaser, or adopt any new severance plan, or amend or modify or alter in any manner any severance plan, agreement or arrangement existing on the date hereof or hire any new employees or consultantshereof;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify any rights to the Company Intellectual Property, or enter into grants to transfer or license to any person future patent rights, other than in the ordinary course of business consistent with past practices, provided that in no event shall Company license on an exclusive basis or sell any Company Intellectual Property;
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of CompanyCompany or its subsidiaries, except for the payment of up to $500,000 for the redemption of shares held by those holders of Company Common Stock listed on Schedule 5.1(e) hereto and the payment of legal fees to counsel for holders of common stock of the Company in connection with such repurchase; subject to indemnification as set forth in Article IX for expenditures in excess of such amount;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber or propose any of the foregoing with respect to any shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares;
(g) Cause, permit or propose any amendments to the Company Charter DocumentsDocuments (or similar governing instruments of any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to enter into any joint ventures, strategic partnerships or alliances;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory in the ordinary course of business consistent with past practice;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than in connection with the financing of ordinary course trade payables by Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parentconsistent with past practice;
(k) Adopt or amend any material employee policy or arrangement, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director or employee, or, except in the ordinary course of business consistent with past practice, increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultants;
(i) pay, discharge, settle or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), or litigation (whether or not commenced prior to the date of this Agreement) other than the payment, discharge, settlement or satisfaction, in the ordinary course of business consistent with past practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company as provided to the Purchasers or incurred since the date of such financial statements, or (ii) waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any confidentiality or similar agreement to which Company or any of its subsidiaries is a party or of which Company or any of its subsidiaries is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business in excess of $10,000100,000 except as contemplated by Section 6.12 hereof;
(n) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any Material Contract or agreement to which Company or any subsidiary thereof is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into, renew or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company other than renewals of existing nonexclusive contracts, agreements or obligations;
(p) Except as required by GAAP, revalue any of its assets or make any change in accounting methods, principles or practices;
(q) Incur or enter into any agreement, contract or commitment requiring Company or any of its subsidiaries to pay in excess of $10,000100,000, excluding routine purchase orders consistent with past practices;
(r) Settle any material litigation;
(s) Make or change Change any material election in respect of Taxes, Taxes (as defined in Section 8.1 below); adopt or change any accounting method in respect of Taxes, file any Tax Returns ; agree or any amendment to any Tax Return other than in a manner consistent with prior practices, enter into any closing agreement, settle any claim or assessment in respects respect of Taxes, ; or consent to any extension extend or waiver of waive the limitation period applicable to any claim or assessment in respect of Taxes;
(t) Agree in writing or otherwise to take any of the actions described in Section 5.1(a) through Section (s) above.
Appears in 1 contract
Samples: Merger Agreement (Tut Systems Inc)
Conduct Prior to the Effective Time. 5.1 7.1 Conduct of Business by Company, Indirect Parent, Second Intermediary -------------------------------------------------------------------- Parent, First Intermediary Parent of Zabit and ParentX-ceed. During the period from the date -------------------------------------------- of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, Indirect Parent, Second Intermediary Parent, First Intermediary Parent and Parent shall cause the Company to and the Company shall, except to the extent that Purchaser shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), carry on its business, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulations, pay its debts and taxes when due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has significant business dealings. In addition, except as permitted by the terms of this Agreement, and the transactions contemplated hereby, without the prior written consent of Purchaser, during the period from the execution date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, Zabit and X-ceed agree (except as contemplated by this Agreement or to the extent that Zabit or X-ceed shall otherwise consent in writing) to carry on their business in the usual, regular and ordinary course in substantially the same manner as heretofore conducted, to pay their debts and Taxes when due, to pay or perform other obligations when due, and, to the extent consistent with such business, to use all commercially reasonable efforts consistent with past practice and policies to preserve intact their present business organization, keep available the services of their present officers and key employees and preserve their relationships with customers, suppliers, licensors, licensees, and others having business dealings with them, all with the goal of preserving unimpaired their goodwill and ongoing businesses at the Effective Time and, in the case of X-ceed, to cause any Subsidiaries to do the same. Notwithstanding the foregoing, nothing in this Section 7.1 shall be considered to prohibit X-ceed from consummating transactions announced or previously disclosed to Zabit, including the Mercury 7 Transaction, prior to the date of this Agreement or disclosed in the X-ceed SEC Filings or in the X-ceed Disclosure Schedule. Following the date of this Agreement, Zabit and X-ceed shall promptly notify the other party of any materially adverse event related to such party and, in the case of X-ceed, its Subsidiaries or the business of such party and, in the case of X-ceed, its Subsidiaries. Without limiting the foregoing, except as expressly contemplated by this Agreement, neither Indirect ParentZabit nor X-ceed shall, Second Intermediary Parentnor, First Intermediary Parent nor Parent shall in the case of X-ceed, permit the Company any Subsidiary to, and Company shall not do any without the prior written consent of the followingother party:
(a) With respect to Indirect Parent, Second Intermediary Parent, First Intermediary Parent Enter into any material commitment or Parent, waive any stock repurchase rights, accelerate, amend or change transaction not in the period ordinary course of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans to any employee, consultant or director of the Company, except as provided for under this Agreement or the attached exhibitsbusiness consistent with past practice;
(b) Grant any severance or termination pay Transfer to any officer person or employee except pursuant entity any rights to written agreements outstandingthe Zabit Proprietary Rights or X-ceed Proprietary Rights, or policies existing, on the date hereof and as previously disclosed in writing or made available to Purchaser, or adopt any new severance plan, or amend or modify or alter in any manner any severance plan, agreement or arrangement existing on the date hereof or hire any new employees or consultantsrespectively;
(c) Transfer or license to any person or entity Amend or otherwise extendmodify, amend or modify any rights to except in the Company Intellectual Propertyordinary course of business consistent with past practice, or enter into grants to transfer violate the material terms of, any of the agreements set forth or license to any person future patent rightsdescribed in the Zabit Disclosure Schedule, in the X-ceed SEC Filings or the X-ceed Disclosure Schedule;
(d) Commence a lawsuit other than (i) for the routine collection of bills or (ii) in such cases where Zabit or X-ceed, as the case may be, in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business provided that it consult with the other party prior to the filing of such suit; ^ ^
(e) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities stock or property) in respect of any of its capital stock stock, or 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 any shares of its capital stock;
(e) Purchasestock or other equity interests, or repurchase, redeem or otherwise acquire, directly or indirectly, any shares of its capital stock of Company(or options, warrants or other rights exercisable therefor), other than amounts authorized by Section 4.8(e);
(f) Issue, delivergrant, sell, authorize, pledge deliver or otherwise encumber sell or authorize or propose any of the foregoing with respect to issuance, grant, delivery or sale of, or purchase or propose the purchase of, any shares of its capital stockstock or securities convertible into, or enter into subscriptions, rights, warrants or options to acquire, or other agreements or commitments of any character obligating it to issue any such sharesshares or other convertible securities;
(g) Cause, Cause or permit or propose any amendments to its respective Articles or Certificate of Incorporation or Bylaws, as the Company Charter Documentscase may be (or other charter documents);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any assets or equity interest in or a portion of the assets securities of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to enter into acquire any joint ventures, strategic partnerships or alliancesassets;
(i) Sell, lease, license, encumber license or otherwise dispose of any of its properties or assets assets, except sales of inventory in the ordinary course of business consistent with past practice;
(j) Incur Except as may be necessary for X-ceed to fulfill its obligations under this Agreement, incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, or issue or sell any of its debt securities or options, warrants, calls or other rights to acquire guarantee any debt securities of Company, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than in connection with the financing of ordinary course trade payables by Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parentothers;
(k) Grant any severance or termination pay (i) to any director or officer or (ii) to any other employee other than pursuant to the existing agreements of Zabit or X-ceed and its Subsidiaries;
(l) Adopt or amend any material employee policy or arrangementbenefit plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into than, in the ordinary course case of business consistent X-ceed, an employment contract with past practice with employees who are terminable "at will"Xxxxx Xxxxxxx and the three (3) principal shareholders of Mercury 7), extend employment offers to any person whose aggregate annual base salary would exceed twenty-five thousand dollars ($25,000), pay or agree to pay any special bonus or special remuneration to any director or employeeemployee other than in connection with normal annual bonus and salary adjustments for all non-officers and directors upon consultation with the other party, oror increase the salaries or wage rates of its other employees, except as consistent with the ordinary course of business consistent with past practice;
(m) Revalue any of its assets, including without limitation writing down the value of inventory or writing off notes or accounts receivable, other than in the ordinary course of business consistent with past practice, increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultants;
(in) payPay, dischargedischarge or satisfy, settle in an amount in excess of ten thousand dollars ($10,000) (in any one case) or satisfy twenty-five thousand dollars ($25,000) (in the aggregate), any claimsclaim, liabilities liability or obligations obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), or litigation (whether or not commenced prior to the date of this Agreement) other than the payment, discharge, settlement discharge or satisfaction, satisfaction in the ordinary course of business consistent with past practice of liabilities reflected or reserved against in accordance with their termsthe Zabit Balance Sheet or the X-ceed Balance Sheet, as the case may be, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company as provided to the Purchasers or incurred since the date of such financial statements, or (ii) waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any confidentiality or similar agreement to which Company is a party or of which Company is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business in excess of $10,000;
(n) Except that ^ ^ arose in the ordinary course of business subsequent to July 31, 1998 or unless payment of such claim, liability or obligation is due in accordance with its terms or expenses consistent with past practice, modify, amend or terminate any Material Contract or agreement to which Company the provisions of this Agreement incurred in connection with the transactions contemplated hereby and is a party or waive, delay the exercise of, release or assign any material rights or claims thereundernot in excess of twenty-five thousand dollars ($25,000);
(o) Enter into, renew or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company other than renewals of existing nonexclusive contracts, agreements or obligations;
(p) Except as required by GAAP, revalue any of its assets or make any change in accounting methods, principles or practices;
(q) Incur or enter into any agreement, contract or commitment requiring Company to pay in excess of $10,000, excluding routine purchase orders consistent with past practices;
(r) Settle any material litigation;
(s) Make or change any material election in respect of Taxes, adopt or change any accounting method in respect of Taxes, file any Tax Returns or any amendment to any Tax Return other than in a manner consistent with prior practices, enter into any closing agreement, settle any claim or assessment in respects respect of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes;; or
(tp) Agree Take, or agree in writing or otherwise to take take, any of the actions described in Section 5.1(aSections 7.1(a) through (s7.1(o) above, or any other action that would prevent Zabit or X-ceed from performing or cause Zabit or X-ceed not to perform its covenants hereunder.
Appears in 1 contract
Samples: Merger Agreement (X Ceed Inc)
Conduct Prior to the Effective Time. 5.1 4.1 Conduct of Business by Company, Indirect Parent, Second Intermediary -------------------------------------------------------------------- Parent, First Intermediary Parent of the Company and Business of Parent. During the period from the date -------------------------------------------- of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, Indirect Parent, Second Intermediary Parent, First Intermediary Parent and Parent shall cause the Company to and the Company shall, except to the extent that Purchaser shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), carry on its business, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulations, pay its debts and taxes when due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has significant business dealings. In addition, except as permitted by the terms of this Agreement, and the transactions contemplated hereby, without the prior written consent of Purchaser, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time:
(a) the Company agrees to operate the business of the Company in the usual, neither Indirect regular and ordinary course, consistent with past practice and in substantially the same manner as heretofore conducted, except as expressly contemplated by this Agreement or otherwise consented to by Parent in writing;
(b) Parent agrees to operate the business of Parent in the usual, regular and ordinary course, consistent with past practice and in substantially the same manner as heretofore conducted, except as expressly contemplated by this Agreement or otherwise consented to by the Company in writing;
(c) the Company and Parent each further agree to pay their respective debts and Taxes when due, to pay or perform all other obligations when due (including pay accounts payable without extension), to use their commercially reasonable efforts to preserve intact their present respective business organizations, to preserve their respective cash in accordance with past practice, to use their commercially reasonable efforts to promptly collect all their respective receivables, to use their commercially reasonable efforts to keep available the services of their present respective officers and employees (other than termination for cause following notice to and consultation with one another), to use their commercially reasonable efforts to preserve and maintain in full force and effect all Owned Company Intellectual Property and Owned Parent Intellectual Property (respectively), to timely pay all fees, costs, royalties, and expenses relating to Owned Company Intellectual Property and Owned Parent Intellectual Property (respectively), and to timely file and pay for all applications, statements, documents, extensions, disclaimers, and registrations relating to Owned Company Intellectual Property and Owned Parent Intellectual Property (respectively), and to preserve their respective relationships with customers, suppliers, distributors, licensors, licensees and others having business dealings with the Company and Parent, Second Intermediary Parentrespectively; and
(d) except with the prior written consent of Parent or as set forth on Schedule 4.1(d), First Intermediary Parent nor Parent shall permit the Company to, and Company further agrees it shall not do any of the following:
(a) With respect to Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parent, waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans to any employee, consultant or director of the Company, except as provided for under this Agreement or the attached exhibits;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing or made available to Purchaser, or adopt any new severance plan, or amend or modify or alter in any manner any severance plan, agreement or arrangement existing on the date hereof or hire any new employees or consultants;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify any rights to the Company Intellectual Property, or enter into grants to transfer or license to any person future patent rights;
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber or propose any of the foregoing with respect to any shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares;
(g) Cause, permit or propose any amendments to the Company Charter Documents;
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to enter into any joint ventures, strategic partnerships or alliances;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory in the usual, regular and ordinary course of business consistent with past practice;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Companyits business, enter into any "keep well" corporate strategic relationship or other agreement to maintain any financial statement condition a material transaction, purchase, sell or enter into any arrangement having the economic effect of any of the foregoing other than in connection with the financing of ordinary course trade payables by Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parent;
(k) Adopt or amend any material employee policy or arrangementotherwise dispose of, or enter into any employment contract agreement or collective bargaining agreement (other than offer letters and letter agreements entered into in arrangement for the ordinary course of business consistent with past practice with employees who are terminable "at will")purchase, pay sale or other disposition of, any special bonus properties or special remuneration to any director or employee, or, except in the ordinary course of business consistent with past practice, increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultantsassets;
(i) pay, discharge, settle or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), or litigation (whether or not commenced prior to the date of this Agreement) other than the payment, discharge, settlement or satisfaction, in the ordinary course of business consistent with past practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company as provided to the Purchasers or incurred since the date of such financial statements, or (ii) waive the benefits ofissue any equity securities, agree to modify in any mannersecurities convertible or exchangeable for equity securities or options, terminate, release warrants or other purchase rights therefor or declare or pay any person from or knowingly fail to enforce any confidentiality or similar agreement to which Company is a party or of which Company is a beneficiarydistribution;
(miii) Make make or enter into any individual or series of related payments outside commitment for capital expenditures of the ordinary course of business Company in excess of $10,000;50,000; or
(niv) Except make any material changes in the ordinary course of business consistent with past practicecompensation or benefits payable or paid, modifywhether conditionally or otherwise, amend or terminate any Material Contract or agreement to which Company is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into, renew or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company other than renewals of existing nonexclusive contracts, agreements or obligations;
(p) Except as required by GAAP, revalue any of its assets current or make any change in accounting methodsformer employees, principles officers, directors or practices;
(q) Incur or enter into any agreement, contract or commitment requiring Company to pay in excess of $10,000, excluding routine purchase orders consistent with past practices;
(r) Settle any material litigation;
(s) Make or change any election in respect of Taxes, adopt or change any accounting method in respect of Taxes, file any Tax Returns or any amendment to any Tax Return other than in a manner consistent with prior practices, enter into any closing agreement, settle any claim or assessment in respects of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes;
(t) Agree in writing or otherwise to take any of the actions described in Section 5.1(a) through (s) aboveservice providers.
Appears in 1 contract
Samples: Agreement and Plan of Merger (Ikena Oncology, Inc.)
Conduct Prior to the Effective Time. 5.1 4.1 Conduct of Business by of the Company, Indirect Parent, Second Intermediary -------------------------------------------------------------------- Parent, First Intermediary Parent and Parent. During the period from the date -------------------------------------------- of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, Indirect Parent, Second Intermediary Parent, First Intermediary Parent and Parent shall cause the Company to and the Company shall, except to the extent that Purchaser shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), carry on its business, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulations, pay its debts and taxes when due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has significant business dealings. In addition, except as permitted by the terms of this Agreement, and the transactions contemplated hereby, without the prior written consent of Purchaser, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, neither Indirect Parent, Second Intermediary Parent, First Intermediary Parent nor the Company agrees (except to the extent that Parent shall permit otherwise consent in writing), to carry on its business in the usual, regular and ordinary course in substantially the same manner as heretofore conducted, to pay its debts and taxes when due subject (i) to good faith disputes over such debts or taxes and (ii) in the case of taxes, to Parent's consent to the filing of material Returns if applicable, to pay or perform other obligations when due, and, to the extent consistent with such business, use all reasonable efforts consistent with past practice and policies to preserve intact the Company's present business organizations, keep available the services of its present officers and key employees and preserve their relationships with customers, suppliers, distributors, licensors, licensees, and others having business dealings with it, to the end that the Company's goodwill and ongoing businesses shall be unimpaired at the Effective Time. The Company shall promptly notify Parent of any event or occurrence not in the ordinary course of business of the Company towhich could have a Material Adverse Effect on the Company. Except as expressly contemplated by this Agreement, and the Company shall not do any not, without the prior written consent of the followingParent:
(a) With respect Except pursuant to Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parent, waive any stock repurchase rightsexisting contractual provisions of options outstanding on the date hereof and which are disclosed in writing pursuant to Section 2.2, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options stock granted under any employee, consultant, director or other the employee stock plans of the Company or authorize cash payments in exchange for any options granted under any of such plans to any employee, consultant or director of the Company, except as provided for under this Agreement or the attached exhibitsplans;
(b) Enter into any commitment or transaction (i) which requires performance over a period longer than six months in duration except transactions in the ordinary course of business, or (ii) to purchase fixed assets for a purchase price in excess of $50,000; except as mutually agreed by Parent and the Company and set forth on a separate certificate;
(c) Grant any severance or termination pay (i) to any director or officer or (ii) to any other employee except (x) payments made pursuant to standard written agreements outstanding, or policies existing, outstanding on the date hereof and as previously disclosed on Schedule 2.12 or (y) in writing or made available the case of employees who do not have standard written agreements, payments of up to Purchaser, or adopt any new severance plan, or amend or modify or alter in any manner any severance plan, agreement or arrangement existing on the date hereof or hire any new employees or consultantstwo months salary;
(cd) Transfer or license to any person or entity or otherwise extend, amend or modify any rights to the Company's Intellectual Property other than nonexclusive object code licenses except as mutually agreed by Parent and the Company Intellectual Property, or enter into grants to transfer or license to any person future patent rights;
(d) Declare, and set aside or pay any dividends forth on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stocka separate certificate;
(e) Purchase, redeem Enter into or otherwise acquire, directly amend any agreements pursuant to which any other party is granted marketing or indirectly, other rights of any shares of capital stock of Company;
(f) Issue, deliver, sell, authorize, pledge type or otherwise encumber or propose any of the foregoing scope with respect to any shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares;
(g) Cause, permit or propose any amendments to the Company Charter Documents;
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to enter into any joint ventures, strategic partnerships or alliances;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory in the ordinary course of business consistent with past practice;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than in connection with the financing of ordinary course trade payables by Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parent;
(k) Adopt or amend any material employee policy or arrangement, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director or employee, or, except in the ordinary course of business consistent with past practice, increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultants;
(i) pay, discharge, settle or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), or litigation (whether or not commenced prior to the date of this Agreement) other than the payment, discharge, settlement or satisfaction, in the ordinary course of business consistent with past practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company as provided to the Purchasers or incurred since the date of such financial statements, or (ii) waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any confidentiality or similar agreement to which Company is a party or of which Company is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business in excess of $10,000;
(n) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any Material Contract or agreement to which Company is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into, renew or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company other than renewals of existing nonexclusive contracts, agreements or obligations;
(p) Except as required by GAAP, revalue any of its assets or make any change in accounting methods, principles or practices;
(q) Incur or enter into any agreement, contract or commitment requiring Company to pay in excess of $10,000, excluding routine purchase orders consistent with past practices;
(r) Settle any material litigation;
(s) Make or change any election in respect of Taxes, adopt or change any accounting method in respect of Taxes, file any Tax Returns or any amendment to any Tax Return other than in a manner consistent with prior practices, enter into any closing agreement, settle any claim or assessment in respects of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes;
(t) Agree in writing or otherwise to take any of the actions described in Section 5.1(a) through (s) above.technology of
Appears in 1 contract
Samples: Merger Agreement (Cybermedia Inc)
Conduct Prior to the Effective Time. 5.1 4.1 Conduct of Business by Company, Indirect Parent, Second Intermediary -------------------------------------------------------------------- Parent, First Intermediary Parent of the Company and Parentits Subsidiaries. During the period from the date -------------------------------------------- of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, Indirect Parent, Second Intermediary Parent, First Intermediary Parent and Parent shall cause the Company to and the Company shall, except to the extent that Purchaser shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed), carry on its business, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulations, pay its debts and taxes when due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has significant business dealings. In addition, except as permitted by the terms of this Agreement, and the transactions contemplated hereby, without the prior written consent of Purchaser, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or and the Effective Time, the Company agrees (unless otherwise required by this Agreement or Parent has given its prior consent in writing) to carry on its business in the ordinary course consistent with past practice, to pay its Liabilities and Taxes consistent with the Company's past practices, to pay or perform other obligations when due consistent with the Company's past practices, subject to any good faith disputes over such Liabilities, Taxes and other obligations and, to the extent consistent with such business, to use reasonable efforts and institute all policies to preserve intact its present business organization, keep available the services of its present officers and key employees, preserve its relationships with customers, suppliers, distributors, licensors, licensees, independent contractors and other Persons having business dealings with it and to cause its Subsidiaries to do the same, all with the express purpose and intent of preserving unimpaired its goodwill and ongoing businesses at the Effective Time. Except as expressly contemplated by this Agreement, neither Indirect the Company nor any of its Subsidiaries shall, without the prior written consent of Parent, Second Intermediary Parenttake, First Intermediary Parent nor Parent shall permit the Company to, and Company shall not do any of the followingor agree in writing or otherwise to take:
(a) With respect to Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parent, waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans to any employee, consultant or director of the Company, except as provided for under this Agreement or the attached exhibitsactions described in Sections 2.8 (a) through (jj) above;
(b) Grant any severance other action that would make any of its representations or termination pay warranties contained in this Agreement untrue or incorrect or prevent the Company from performing or cause the Company not to any officer or employee except pursuant to written perform its agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing or made available to Purchaser, or adopt any new severance plan, or amend or modify or alter in any manner any severance plan, agreement or arrangement existing on the date hereof or covenants hereunder;
(c) hire any new employees or consultants;
engage any new consultants (c) Transfer or license to any person or entity or otherwise extend, amend or modify any rights to the other than co-op student employees who do not receive Company Intellectual Property, or enter into grants to transfer or license to any person future patent rightsOptions);
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize notwithstanding the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber or propose any of the foregoing with respect to any shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares;
(g) Cause, permit or propose any amendments actions permitted by this Section 4.1 relating to the actions described in Section 2.8(j)(ii), the Company Charter Documents;
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing shall not grant any equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to enter into any joint ventures, strategic partnerships or alliances;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory in the ordinary course of business consistent with past practice;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing options under its existing stock option plans other than in connection with the financing of ordinary course trade payables by Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parent;
(k) Adopt or amend any material employee policy or arrangement, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into options granted in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director or employee, employee in satisfaction of a written obligation of the Company in existence as of the date hereof to grant such employee options upon satisfactory completion of a six-month probationary period; or, except in the ordinary course of business consistent with past practice, increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultants;
(ie) pay, discharge, settle or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), or litigation (whether or not commenced prior to notwithstanding the date of action permitted by this Agreement) other than the payment, discharge, settlement or satisfaction, in the ordinary course of business consistent with past practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company as provided to the Purchasers or incurred since the date of such financial statements, or (ii) waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any confidentiality or similar agreement to which Company is a party or of which Company is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business in excess of $10,000;
(n) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any Material Contract or agreement to which Company is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into, renew or materially modify any contracts, agreements, or obligations Section 4.1 relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company other than renewals of existing nonexclusive contracts, agreements or obligations;
(p) Except as required by GAAP, revalue any of its assets or make any change in accounting methods, principles or practices;
(q) Incur or enter into any agreement, contract or commitment requiring Company to pay in excess of $10,000, excluding routine purchase orders consistent with past practices;
(r) Settle any material litigation;
(s) Make or change any election in respect of Taxes, adopt or change any accounting method in respect of Taxes, file any Tax Returns or any amendment to any Tax Return other than in a manner consistent with prior practices, enter into any closing agreement, settle any claim or assessment in respects of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes;
(t) Agree in writing or otherwise to take any of the actions described in Section 5.1(a) through (s) above.2.8(o), the Company shall not make any capital expenditures or commitments for additions to property, plant or equipment of the Company constituting capital assets individually in an amount exceeding $40,000 or in the aggregate in an amount exceeding $100,000;
Appears in 1 contract
Conduct Prior to the Effective Time. 5.1 Conduct of Business by CompanyAscend, Indirect ParentMerger Sub LLC, Second Intermediary -------------------------------------------------------------------- ParentMerger Sub Inc., First Intermediary Parent Kitara Media and ParentNYPG. During the period from the date -------------------------------------------- of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective TimeClosing, Indirect Parenteach of Ascend, Second Intermediary ParentMerger Sub LLC, First Intermediary Parent Merger Sub Inc., Kitara Media and Parent shall cause the Company to and the Company NYPG shall, except to the extent that Purchaser the other party shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed)as contemplated by this Agreement or as set forth in Schedule 5.1, carry on its business, business in the usual, regular and ordinary coursecourse consistent with past practices, in substantially the same manner as heretofore conducted and in compliance with all applicable laws Applicable Laws and regulationsregulations (except where noncompliance would not be reasonably expected to have a Material Adverse Effect), pay its debts and taxes when due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, and use its commercially reasonable best efforts consistent with past practices and policies to (i) preserve substantially intact its present business organization, (ii) keep available the services of its present key officers and key employees and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has significant business dealings. In addition, except as required or permitted by the terms of this Agreement, Agreement and the transactions contemplated herebyexcept as set forth in Schedule 5.1, without the prior written consent of Purchaserthe other party, which cannot be unreasonably withheld, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective TimeClosing, neither Indirect Parenteach of Ascend, Second Intermediary ParentMerger Sub LLC, First Intermediary Parent nor Parent shall permit the Company toMerger Sub Inc., Kitara Media and Company NYPG shall not do any of the following:
(a) With respect to Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parent, waive Waive any stock repurchase rights, accelerate, amend or (except as specifically provided for herein) change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans to any employee, consultant or director of the Company, except as provided for under this Agreement or the attached exhibitsplans;
(b) Grant any severance or termination pay to (i) any officer or employee (ii) any employee, except pursuant to applicable law, written agreements outstanding, or policies existing, existing on the date hereof and as previously or concurrently disclosed in writing or made available to Purchaserthe other party, or adopt any new severance plan, or amend or modify or alter in any manner any severance plan, agreement or arrangement existing on the date hereof or hire any new employees or consultantshereof;
(c) Transfer Sell, transfer or license to any person or entity or otherwise extend, amend or modify any material rights to the Company any Intellectual Property, or enter into grants to sell, transfer or license to any person material future patent rights, except (i) in the ordinary course of business consistent with past practice or (ii) as required by agreements in effect as of the date hereof;
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital membership units, common stock of Companyor other equity securities or ownership interests;
(f) IssueExcept as contemplated by this Agreement, issue, deliver, sell, authorize, pledge or otherwise encumber encumber, or propose agree to any of the foregoing with respect to, any membership interests or common stock or other equity securities or ownership interests or any securities convertible into or exchangeable for membership interests or common stock or other equity securities or ownership interests, or subscriptions, rights, warrants or options to acquire any shares of capital stockmembership interests or common stock or other equity securities or ownership interests or any securities convertible into or exchangeable for membership units or common stock or other equity securities or other ownership interests, or enter into other agreements or commitments of any character obligating it to issue any such sharesunits, equity securities or other ownership interests or convertible or exchangeable securities;
(g) Cause, permit or propose any amendments to the Company Amend its Charter Documents;
(h) Acquire Except as contemplated by this Agreement, acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of Ascend, Kitara Media or NYPG, as applicable, or enter into any joint ventures, strategic partnerships or alliancesalliances or other arrangements that provide for exclusivity of territory or otherwise restrict such party’s ability to compete or to offer or sell any products or services;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets assets, except (A) sales of inventory in the ordinary course of business consistent with past practice, and (B) the sale, lease or disposition (other than through licensing) of property or assets that are not material, individually or in the aggregate, to the business of such party;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another personPerson or Persons, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of CompanyAscend, Kitara Media or NYPG, as applicable, enter into any "“keep well" ” or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than in connection with the financing of ordinary course trade payables by Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parentforegoing;
(k) Adopt or amend any material employee benefit plan, policy or arrangement, any employee stock purchase or employee stock option plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "“at will"”), pay any special bonus or special remuneration to any director or employee, or, except in the ordinary course of business consistent with past practice, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultants, except in the ordinary course of business consistent with past practices or to conform to the requirements of any Applicable Law;
(il) payPay, discharge, settle or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), or litigation (whether or not commenced prior to the date of this Agreement) other than the payment, discharge, settlement or satisfaction, in the ordinary course of business consistent with past practice practices or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (included in the Ascend SEC Reports filed prior to the date of this Agreement or the notes thereto) of Company Kitara Media Draft Audited Financial Statements or the NYPG Draft Audited Financial Statements, as provided to the Purchasers applicable, or incurred since the date of such financial statements, or (ii) waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any confidentiality or similar agreement to which Company Kitara Media or NYPG is a party or of which Company Kitara Media or NYPG is a beneficiary or to which Ascend is a party or of which Ascend is a beneficiary, as applicable;
(m) Make any individual or series of related payments outside of the ordinary course of business in excess of $10,000;
(n) Except in the ordinary course of business consistent with past practicepractices, modify, amend or terminate any Material material Kitara Media Contract or agreement to which Company is a party Ascend Contract, as applicable, or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into, renew or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company other than renewals of existing nonexclusive contracts, agreements or obligations;
(pn) Except as required by U.S. GAAP, revalue any of its assets or make any change in accounting methods, principles or practices;
(qo) Incur Except in the ordinary course of business consistent with past practices, incur or enter into any agreement, contract or commitment requiring Company such party to pay in excess of $10,000100,000 in any 12-month period;
(p) Settle any litigation where the consideration given is other than monetary or to which a Kitara Media Related Party, excluding routine purchase orders NYPG Related Party or Ascend Related Party is a party;
(q) Make or rescind any tax elections that, individually or in the aggregate, could be reasonably likely to adversely affect in any material respect the tax liability or tax attributes of such party, settle or compromise any material income tax liability or, except as required by applicable law, materially change any method of accounting for tax purposes or prepare or file any return in a manner inconsistent with past practice;
(r) Form or establish any subsidiary except in the ordinary course of business consistent with prior practice or as contemplated by this Agreement;
(s) Permit any Person to exercise any of its discretionary rights under any ERISA Plan to provide for the automatic acceleration of any outstanding options, the termination of any outstanding repurchase rights or the termination of any cancellation rights issued pursuant to such plans;
(t) Make capital expenditures except in accordance with prudent business and operational practices consistent with past practices;
(ru) Settle Make or omit to take any material litigationaction which would be reasonably expected to have a Material Adverse Effect;
(sv) Make Enter into any transaction with or change distribute or advance any election in respect of Taxes, adopt assets or change any accounting method in respect of Taxes, file any Tax Returns or any amendment property to any Tax Return of its officers, directors, partners, stockholders, managers, members or other Affiliates other than the payment of salary and benefits and tax distributions in a manner the ordinary course of business consistent with prior past practices, enter into any closing agreement, settle any claim or assessment in respects of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes;; or
(tw) Agree in writing or otherwise agree, commit or resolve to take any of the actions described in Section Sections 5.1(a) through (sv) above.
Appears in 1 contract
Conduct Prior to the Effective Time. 5.1 Conduct of Business by Company4.1 CONDUCT OF BUSINESS BY COMPANY, Indirect Parent, Second Intermediary -------------------------------------------------------------------- Parent, First Intermediary Parent and ParentPARENT AND MERGER SUB. During the period from the date -------------------------------------------- of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective TimeClosing, Indirect Parenteach of the Company, Second Intermediary Parent, First Intermediary Parent and Parent shall cause the Company to and the Company Merger Sub shall, except in connection with Permitted Acquisitions (as defined in Section 4.2) or Permitted Financings or to the extent that Purchaser the other parties shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed)writing, carry on its business, business in the usual, regular and ordinary coursecourse consistent with past practices, in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulationsregulations (except where noncompliance would not have a Material Adverse Effect), pay its debts and taxes when due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve substantially intact its present business organization, (ii) keep available the services of its present officers and employees and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has significant business dealings. In addition, except in connection with Permitted Acquisitions (as defined in Section 4.2) or Permitted Financings or as otherwise required or permitted by the terms of this Agreement, and the transactions contemplated hereby, without the prior written consent of Purchaserthe other parties, not to be unreasonably withheld or delayed, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective TimeClosing, neither Indirect Parenteach of the Company, Second Intermediary Parent, First Intermediary Parent nor Parent shall permit the Company to, and Company Merger Sub shall not do any of the following:
(a) With respect to Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parent, waive Waive any stock repurchase rights, accelerateaccelerate (except as disclosed in the Company Disclosure Schedule), amend or (except as specifically provided for herein) change the period of exercisability of options options, warrants or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans or any warrants except in connection with severance arrangements with employees or consultants terminated prior to any employee, consultant or director of the Company, except as provided for under this Agreement or the attached exhibitsdate hereof;
(b) Grant any severance or termination pay to any officer or employee terminated after the date hereof except pursuant to applicable law, written agreements outstanding, or policies existing, existing on the date hereof and as previously or concurrently disclosed in writing or made available to Purchaserthe other party, or adopt any new severance plan, or amend or modify or alter in any manner any severance plan, agreement or arrangement existing on the date hereof or hire any new employees or consultantshereof;
(c) Transfer or license to any person or entity Person or otherwise extend, amend or modify any material rights to any Intellectual Property of the Company Intellectual PropertyCompany, Merger Sub or Parent, as applicable, or enter into grants to transfer or license to any person Person future patent rights, other than in the ordinary course of business consistent with past practices, provided that in no event shall the Company, Merger Sub or Parent license on an exclusive basis or sell any material Intellectual Property of the Company, Merger Sub or Parent as applicable;
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stockstock of the Company;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company;
, Merger Sub or Parent, as applicable, from any Person who is required to execute and deliver a Significant Stockholder Lock-up Agreement or any transferee of any such Person except as set forth in Schedule 4.1(e) of the Company Disclosure Schedule; (f) Issue, deliver, sell, authorize, pledge or otherwise encumber encumber, or propose agree to any of the foregoing with respect to, any shares of capital stock or any securities convertible into or exchangeable for shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into or exchangeable for shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares;
(g) Causeshares or convertible or exchangeable securities, permit except for the issuance of Company Common Stock upon the exercise of outstanding Company Options or propose any amendments to the Company Charter Documents;
(h) Acquire or agree to acquire by merging or consolidating withWarrants, or by purchasing any equity interest in or a portion issuance of Company Common Stock upon the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to enter into any joint ventures, strategic partnerships or alliances;
(i) Sell, lease, license, encumber or otherwise dispose conversion of any properties Company Preferred Stock or assets except sales of inventory in the ordinary course of business consistent with past practiceCompany Convertible Notes;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than in connection with the financing of ordinary course trade payables by Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parent;
(k) Adopt or amend any material employee policy or arrangement, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director or employee, or, except in the ordinary course of business consistent with past practice, increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultants;
(i) pay, discharge, settle or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), or litigation (whether or not commenced prior to the date of this Agreement) other than the payment, discharge, settlement or satisfaction, in the ordinary course of business consistent with past practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company as provided to the Purchasers or incurred since the date of such financial statements, or (ii) waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any confidentiality or similar agreement to which Company is a party or of which Company is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business in excess of $10,000;
(n) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any Material Contract or agreement to which Company is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into, renew or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company other than renewals of existing nonexclusive contracts, agreements or obligations;
(p) Except as required by GAAP, revalue any of its assets or make any change in accounting methods, principles or practices;
(q) Incur or enter into any agreement, contract or commitment requiring Company to pay in excess of $10,000, excluding routine purchase orders consistent with past practices;
(r) Settle any material litigation;
(s) Make or change any election in respect of Taxes, adopt or change any accounting method in respect of Taxes, file any Tax Returns or any amendment to any Tax Return other than in a manner consistent with prior practices, enter into any closing agreement, settle any claim or assessment in respects of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes;
(t) Agree in writing or otherwise to take any of the actions described in Section 5.1(a) through (s) above.
Appears in 1 contract
Samples: Agreement and Plan of Merger (Echo Healthcare Acquisition Corp.)
Conduct Prior to the Effective Time. 5.1 4.1 Conduct of Business by Company, Indirect Parent, Second Intermediary -------------------------------------------------------------------- Parent, First Intermediary Parent and Parent. During the period from the date -------------------------------------------- of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, Indirect Parent, Second Intermediary Parent, First Intermediary Parent and Parent shall cause the Company to and the Company shall, except to the extent that Purchaser Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed)writing, carry on its business, in the usual, regular and ordinary course, in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulations, pay its debts and taxes when due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has significant business dealings. In addition, except as expressly permitted by the terms of this Agreement, and the transactions contemplated hereby, without the prior written consent of PurchaserParent, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, neither Indirect Parent, Second Intermediary Parent, First Intermediary Parent nor Parent shall permit not do any of the Company to, following and Company shall not permit its subsidiaries to do any of the following:
(a) With respect to Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parent, waive Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans to any employee, consultant or director of the Company, except as provided for under this Agreement or the attached exhibitsplans;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing or made available to PurchaserParent, or adopt any new severance plan, or amend or modify or alter in any manner any severance plan, agreement or arrangement existing on the date hereof or hire any new employees or consultants;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify any rights to the Company Parent Intellectual Property, or enter into grants to transfer or license to any person future patent rightsrights other than in the ordinary course of business consistent with past practices, provided that in no event shall Parent license on an exclusive basis or sell any Parent Intellectual Property;
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of CompanyParent or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the employment relationship with any employee pursuant to stock option or purchase agreements in effect on the date hereof;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber or propose any of the foregoing with respect to, any shares of capital stock or any securities convertible into shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such sharesshares or convertible securities, other than (x) the issuance delivery and/or sale of (i) shares of Parent Common Stock pursuant to the exercise of stock options outstanding as of the date of this Agreement or granted pursuant to clause (y) hereof, and (ii) shares of Parent Common Stock issuable to participants in the ESPP consistent with the terms thereof and (y) the granting of stock options (and the issuance of Parent Common Stock upon exercise thereof), in the ordinary course of business and consistent with past practices, in an amount not to exceed options to purchase (and the issuance of Parent Common Stock upon exercise thereof) 50,000 shares in the aggregate;
(g) Cause, permit or propose any amendments to the Company Parent Charter DocumentsDocuments (or similar governing instruments of any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to acquire any assets or enter outside the ordinary course of Parent's business consistent with past practice into any joint ventures, strategic partnerships or alliances;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory in the ordinary course of business consistent with past practice, except for the sale, lease or disposition (other than through licensing) of property or assets which are not material, individually or in the aggregate, to the business of Parent and its subsidiaries;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of CompanyParent, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than in connection with the financing of ordinary course trade payables by Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parentconsistent with past practice;
(k) Adopt or amend any material employee benefit plan, policy or arrangement, any employee stock purchase or employee stock option plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director or employee, or, except in the ordinary course of business consistent with past practice, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultants;
(i) pay, discharge, settle or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), or litigation (whether or not commenced prior to the date of this Agreement) other than the payment, discharge, settlement or satisfaction, in the ordinary course of business consistent with past practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company as provided to the Purchasers or incurred since the date of such financial statements, or (ii) waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any confidentiality or similar agreement to which Company is a party or of which Company is a beneficiary;
(ml) Make any individual or series of related payments outside of the ordinary course of business in excess of $10,000business;
(nm) Except in the ordinary course Revalue any of business consistent with past practiceits assets or, modify, amend or terminate any Material Contract or agreement to which Company is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into, renew or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company other than renewals of existing nonexclusive contracts, agreements or obligations;
(p) Except except as required by GAAP, revalue any of its assets or make any change in accounting methods, principles or practices;
(qn) Incur or enter into any agreement, contract or commitment requiring Company to pay outside of the ordinary course of business in excess of $10,000, excluding routine purchase orders consistent with past practices10,000 individually;
(ro) Settle Engage in any material litigationaction that could (i) cause the Merger to fail to qualify as a "reorganization" under Section 368(a) of the Code or (ii) interfere with Parent's ability to account for the Merger as a pooling of interests, whether or not (in each case) otherwise permitted by the provisions of this Article IV;
(sp) Make Engage in any action with the intent to directly or change indirectly adversely impact any election in respect of Taxes, adopt or change any accounting method in respect of Taxes, file any Tax Returns or any amendment to any Tax Return other than in a manner consistent with prior practices, enter into any closing agreement, settle any claim or assessment in respects of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxestransactions contemplated by this Agreement;
(tq) Make any tax election that, individually or in the aggregate, is reasonably likely to adversely affect in any material respect the tax liability or tax attributes of Parent or any of its subsidiaries or settle or compromise any material income tax liability; or
(r) Agree in writing or otherwise to take any of the actions described in Section 5.1(a4.1 (a) through (sq) above.
Appears in 1 contract
Conduct Prior to the Effective Time. 5.1 4.1 Conduct of Business by the Company, Indirect Parent, Second Intermediary -------------------------------------------------------------------- Parent, First Intermediary Parent and ParentMerger Sub. During the period from the date -------------------------------------------- of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or and the Effective TimeClosing, Indirect Parenteach of the Company, Second Intermediary Parentthe Company’s Subsidiaries, First Intermediary Parent and Parent shall cause the Company to and the Company Merger Sub shall, except to the extent that Purchaser Parent (in the case of a request by the Company or the Company’s Subsidiaries) or the Company (in the case of a request by Parent or Merger Sub) shall otherwise consent in writing (which consent shall not be unreasonably withheld withheld, conditioned or delayed)) or as set forth in Schedule 4.1 hereto or as contemplated by this Agreement, carry on its business, business in the usual, regular and ordinary coursecourse consistent with past practices, in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulations, pay its debts and taxes when due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, regulations (except as expressly contemplated by Schedule 4.1 hereto) and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve substantially intact its present business organization, (ii) keep available the services of its present key officers and employees and (iii) preserve its relationships with key customers, suppliers, distributors, licensors, licensees, and others with which it has significant business dealings. In addition, except as required or permitted by the terms of this Agreement, and the transactions contemplated herebyAgreement or as set forth in Schedule 4.1 hereto, without the prior written consent of PurchaserParent (in the case of a request by the Company or the Company’s Subsidiaries) or the Company (in the case of a request by Parent or Merger Sub) (which consent shall not be unreasonably withheld, conditioned or delayed), during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective TimeClosing, neither Indirect Parent, Second Intermediary Parent, First Intermediary Parent nor Parent shall permit each of the Company to(on its behalf and on behalf of its Subsidiaries), Parent and Company Merger Sub shall not do any of the following:
(a) With respect to Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parent, waive Waive any stock repurchase rights, accelerate, amend or (except as specifically provided for herein) change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans to any employee, consultant or director of the Company, except as provided for under this Agreement or the attached exhibitsplans;
(b) Grant any material severance or termination pay to (i) any officer or employee (ii) any employee, except pursuant to applicable law, written agreements outstanding, or Plans or policies existing, existing on the date hereof and as previously or concurrently disclosed in writing or made available to Purchaserthe other Party, or adopt in the case of the Company and its Subsidiaries except in connection with the promotion, hiring or firing of any new severance plan, or amend or modify or alter employee in any manner any severance plan, agreement or arrangement existing on the date hereof or hire any new employees or consultantsordinary course of business consistent with past practice;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify any material rights to the Company any Intellectual Property, Property or enter into grants to transfer or license to any person future patent rights, other than in the ordinary course of business consistent with past practices;
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock (other than any such dividend or distribution by a Subsidiary of the Company to the Company or another such Subsidiary), or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock or other equity securities or ownership interests of Companythe Company or Parent;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber encumber, or propose agree to any of the foregoing with respect to to, any shares of capital stockstock or other equity securities or ownership interests (other than in connection with the exercise of any Company Stock Options) or any securities convertible into or exchangeable for shares of capital stock or other equity securities or ownership interests, or subscriptions, rights, warrants or options to acquire any shares of capital stock or other equity securities or ownership interests or any securities convertible into or exchangeable for shares of capital stock or other equity securities or other ownership interests, or enter into other agreements or commitments of any character obligating it to issue any such shares, equity securities or other ownership interests or convertible or exchangeable securities;
(g) Cause, permit or propose Amend its Charter Documents in any amendments to the Company Charter Documentsmaterial respect;
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to acquire outside the ordinary course of business any assets which are material, individually or in the aggregate, to the business of Parent or the Company and its Subsidiaries, taken as a whole, as applicable, or enter into any joint ventures, strategic partnerships or alliancesalliances or other arrangements that provide for exclusivity of territory or otherwise restrict such party’s ability to compete or to offer or sell any products or services to other Persons. For purposes of this paragraph, “material” includes the requirement that, as a result of such transaction, financial statements of the acquired, merged or consolidated entity be included in the Proxy Statement/Prospectus;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets assets, except (A) sales of inventory in the ordinary course of business consistent with past practice, and (B) the sale, lease or disposition of property or assets that are not material, individually or in the aggregate, to the business of such party (measured with all of its Subsidiaries, taken as a whole);
(j) Incur Except incurrences of indebtedness under the Company’s existing credit facilities (and, in the case of the Company and its Subsidiaries, extensions of credit in the ordinary course with employees and among the Company and its Subsidiaries), incur any indebtedness for borrowed money or guarantee any such indebtedness of another personPerson or Persons (other than Affiliates), issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of CompanyParent or the Company and its Subsidiaries, as applicable, enter into any "“keep well" ” or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than in connection with the financing of ordinary course trade payables by Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parentforegoing;
(k) Adopt Except as otherwise required by applicable law or pursuant to an existing Plan, policy or Company Contract of the Company or its Subsidiaries, (i) adopt or materially amend any material employee policy or arrangementPlan (including any Plan that provides for severance), or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"practice), (ii) pay any special bonus or special remuneration to any director or employee, or, except in the ordinary course of business consistent with past practicepractices, or (iii) materially increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultants, except in the ordinary course of business consistent with past practices;
(i) payPay, discharge, settle or satisfy any material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), or litigation (whether or not commenced prior to the date of this Agreement) other than the payment, discharge, settlement or satisfactionsatisfaction of any claims, liabilities or obligations in the ordinary course of business consistent with past practice practices or in accordance with their terms, or liabilities recognized or disclosed in the Company Financial Statements or in the most recent consolidated financial statements (or the notes thereto) of Company Parent SEC Reports, as provided to the Purchasers applicable, or incurred since the date of such financial statements, or (ii) waive the benefits of, agree to modify in any material manner, terminate, release any person from or knowingly fail to enforce any material confidentiality or similar agreement to which the Company or any of its Subsidiaries is a party or of which the Company any of its Subsidiaries is a beneficiary;
beneficiary (m) Make any individual or series of related payments outside of other than with customers and other counterparties in the ordinary course of business in excess consistent with past practices) or to which Parent is a party or of $10,000which Parent is a beneficiary, as applicable;
(nm) Except in the ordinary course of business consistent with past practicepractices, modify, amend modify in any material respect or terminate (other than in accordance with its terms) any Material Company Contract or agreement to which Company is a party Parent Contract, as applicable, or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into, renew or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company other than renewals of existing nonexclusive contracts, agreements or obligations;
(pn) Except as required by law or U.S. GAAP, revalue any of its assets in any material manner or make any material change in accounting methods, principles or practices;
(qo) Incur Except in the ordinary course of business consistent with past practices, incur or enter into any agreement, contract or commitment requiring Company such party to pay in excess of $10,0001,000,000 in any 12 month period;
(p) Settle any material litigation where the consideration given by the Party is other than monetary or to which an officer, excluding routine purchase orders consistent director or employee of such Person is a party in his or her capacity as such;
(q) Make or rescind any Tax elections that, individually or in the aggregate, would be reasonably likely to adversely affect in any material respect the Tax liability or Tax attributes of such party, settle or compromise any material income tax liability outside the ordinary course of business or, except as required by applicable law, change any material method of accounting for Tax purposes or prepare or file any Return in a manner materially inconsistent with past practicespractice;
(r) Settle Form or establish any material litigationsubsidiary except in the ordinary course of business consistent with prior practice or as contemplated by this Agreement;
(s) Make Permit any Person to exercise any of its discretionary rights under any Plan to provide for the automatic acceleration of any outstanding options, the termination of any outstanding repurchase rights or change the termination of any election in respect of Taxes, adopt or change any accounting method in respect of Taxes, file any Tax Returns or any amendment cancellation rights issued pursuant to any Tax Return other than in a manner consistent with prior practices, enter into any closing agreement, settle any claim or assessment in respects of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxessuch Plans;
(t) Make capital expenditures in excess of previously budgeted amounts;
(u) Enter into any material transaction with or distribute or advance any assets or property to any of its officers, directors, partners, stockholders, managers, members or other Affiliates other than (i) the payment of salary and benefits and the advancement of expenses in the ordinary course of business consistent with prior practice, (ii) such distributions or advancements by a Subsidiary of the Company to the Company or another such Subsidiary or (iii) contracts entered into on an arms’-length basis and in the ordinary course of business between the Company or any Subsidiary, on the one hand, and the direct or indirect portfolio companies of investment funds advised or managed by Carlyle Investment Management L.L.C., on the other hand; or
(v) Agree in writing or otherwise agree or commit to take any of the actions described in Section 5.1(a4.1(a) through (su) above.
Appears in 1 contract
Samples: Agreement and Plan of Reorganization (Pivotal Acquisition Corp)
Conduct Prior to the Effective Time. 5.1 4.1 Conduct of Business by Company, Indirect Parent, Second Intermediary -------------------------------------------------------------------- Parent, First Intermediary Parent Company and Parent. During the period from the date -------------------------------------------- of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, Indirect Parenteach of Company, Second Intermediary Parent, First Intermediary Parent and Parent shall cause the Company to and the Company its Subsidiaries shall, except to the extent that Purchaser the other party shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed)writing, carry on its business, in the usual, regular and ordinary coursecourse consistent with past practices, in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulationsregulations (except where noncompliance would not have a Material Adverse Effect), pay its debts and taxes when due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve substantially intact its present business organization, (ii) keep available the services of its present officers and employees and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has significant business dealings. In addition, except as permitted by the terms of this Agreement, and the transactions contemplated hereby, without the prior written consent of Purchaserthe other party, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, neither Indirect Parenteach of Company, Second Intermediary Parent, First Intermediary Parent nor Parent shall permit the Company to, and Company its Subsidiaries shall not do any of the following:
(a) With respect to Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parent, waive Waive any stock repurchase rights, accelerate, amend or (except as specifically provided for herein) change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans to any employee, consultant or director of the Company, except as provided for under this Agreement or the attached exhibitsplans;
(b) Grant any severance or termination pay to any officer or employee except pursuant to applicable law, written agreements outstanding, or policies existing, on the date hereof and as previously or concurrently disclosed in writing or made available to Purchaserthe other party, or adopt any new severance plan, or amend or modify or alter in any manner any severance plan, agreement or arrangement existing on the date hereof or hire any new employees or consultantshereof;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify any material rights to the Company Intellectual Property or Parent Intellectual Property, as applicable, or enter into grants to transfer or license to any person future patent rights, other than in the ordinary course of business consistent with past practices provided that in no event shall Company, Parent or any Subsidiaries of Parent license on an exclusive basis or sell any Company Intellectual Property or Parent Intellectual Property, as applicable;
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock, except as contemplated by Section 5.8(d) or required by the terms of the Company Preferred Stock;
(e) PurchaseExcept as set forth in Section 4.1(e) of the Company Schedule or Section 4.1(e) of the Parent Schedule, as applicable, purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company, Parent or any Subsidiaries of Parent, as applicable, except repurchases of unvested shares at cost in connection with the termination of the employment relationship with any employee pursuant to stock option or purchase agreements in effect on the date hereof;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber encumber, or propose agree to any of the foregoing with respect to, any shares of capital stock or any securities convertible into or exchangeable for shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into or exchangeable for shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such sharesshares or convertible or exchangeable securities, other than the issuance, delivery and/or sale of shares of its Common Stock pursuant to the exercise of stock options, warrants or other convertible securities (or in lieu of cash dividends in respect of Company Preferred Stock) therefor outstanding or referred to in the Disclosure Schedules as of the date of this Agreement and other than payments to be made by Company to Delano Group Securities, LLC in connection with transactions contemplated by this Agreement;
(g) Cause, permit or propose any amendments to the Company Amend its Charter Documents;
(h) Acquire Except as disclosed in Section 4.1(h) of the Company Schedule or Section 4.1(h) of the Parent Schedule, as applicable, acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of Company, Parent or any Subsidiaries of Parent, as applicable, or enter into any joint ventures, strategic partnerships or alliancesalliances or other arrangements that provide for exclusivity of territory or otherwise restrict such party's ability to compete or to offer or sell any products or services;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets assets, except sales of inventory in the ordinary course of business consistent with past practicepractice and, except for the sale, lease or disposition (other than through licensing) of property or assets which are not material, individually or in the aggregate, to the business of such party;
(j) Incur Except as disclosed in Section 4.1(j) of the Company Schedule or Section 4.1(j) of the Parent Schedule, as applicable, incur any indebtedness for borrowed money in excess of $500,000 in the aggregate or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, Parent or any Subsidiaries of Parent, as applicable, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than in connection with the financing of ordinary course trade payables by Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parentforegoing;
(k) Adopt Except as disclosed in Section 4.1(k) of the Company Schedule or Section 4.1(k) of the Parent Schedule, as applicable, adopt or amend any material employee benefit plan, policy or arrangement, any employee stock purchase or employee stock option plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director or employee, or, except in the ordinary course of business consistent with past practice, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultants, except in the ordinary course of business consistent with past practices;
(l) Except as disclosed in Schedule 4.1(1) of the Company Schedule or Section 4.1(1) of the Parent Schedule, as applicable, (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), or litigation (whether or not commenced prior to the date of this Agreement) other than the payment, discharge, settlement or satisfaction, in the ordinary course of business consistent with past practice practices or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company included in Company SEC Reports or of Parent included in Parent SEC Reports, as provided to the Purchasers applicable, or incurred since the date of such financial statements, or (ii) waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any confidentiality or similar agreement to which Company is a party or of which Company is a beneficiary or to which Parent or any of its Subsidiaries is a party or of which Parent or any of its Subsidiaries is a beneficiary, as applicable;
(m) Make any individual or series of related payments outside of the ordinary course of business in excess of $10,000;
(n) Except in the ordinary course of business consistent with past practicepractices, modify, amend or terminate any Material Company Contract or Parent Contract, as applicable, or other material contract or material agreement to which Company Company, Parent or any Subsidiary of Parent is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into, renew or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company other than renewals of existing nonexclusive contracts, agreements or obligations;
(pn) Except as required by GAAP, revalue any of its assets or make any change in accounting methods, principles or practices;
(qo) Incur Except as set forth in Section 4.1(o) of the Company Schedule or Section 4.1(o) of the Parent Schedule, as applicable, incur or enter into any agreement, contract or commitment requiring Company such party to pay in excess of $10,000100,000 in any 12 month period;
(p) Engage in any action that could reasonably be expected to cause the Merger to fail to qualify as a "reorganization" under Section 368(a) of the Code;
(q) Except as contemplated by Article VI herein or as set forth in Section 4.1(q) of the Company Schedule or Section 4.1(q) of the Parent Schedule, excluding routine purchase orders consistent with past practicesas applicable, settle any litigation;
(r) Settle Make or rescind any Tax elections that, individually or in the aggregate, could be reasonably likely to adversely affect in any material litigationrespect the Tax liability or Tax attributes of such party, settle or compromise any material income tax liability or, except as required by applicable law, materially change any method of accounting for Tax purposes or prepare or file any Return in a manner inconsistent with past practice;
(s) Make Form, establish or change acquire any election in respect of Taxes, adopt or change any accounting method in respect of Taxes, file any Tax Returns or any amendment to any Tax Return other than in a manner consistent with prior practices, enter into any closing agreement, settle any claim or assessment in respects of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of TaxesSubsidiary;
(t) Permit the Plan Administrator to exercise any of its discretionary rights under any stock-based employee benefit plans to provide for the automatic acceleration of any outstanding options, the termination of any outstanding repurchase rights or the termination of any cancellation rights issued pursuant to such plans; or
(u) Agree in writing or otherwise agree, commit or resolve to take any of the actions described in Section 5.1(a4.1 (a) through (st) above.
Appears in 1 contract
Samples: Merger Agreement (American Access Technologies Inc)
Conduct Prior to the Effective Time. 5.1 4.1 Conduct of Business by the Company, Indirect Parent, Second Intermediary -------------------------------------------------------------------- Parent, First Intermediary Parent and ParentMerger Sub. During the period from the date -------------------------------------------- of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or and the Effective TimeClosing, Indirect Parenteach of the Company, Second Intermediary Parentthe Company’s Subsidiaries, First Intermediary Parent and Parent shall cause the Company to and the Company Merger Sub shall, except to the extent that Purchaser Parent (in the case of a request by the Company) or the Company (in the case of a request by Parent or Merger Sub) shall otherwise consent in writing (which consent shall not be unreasonably withheld withheld, conditioned or delayed)) or as set forth in Schedule 4.1 of the Company Schedule or the Parent Schedule (“Schedule 4.1”) or as contemplated by this Agreement or the PIPE Documents, carry on its business, business in the usual, regular and ordinary coursecourse consistent with past practices, in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulations, pay its debts and taxes when due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, regulations (except as expressly contemplated by Schedule 4.1) and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve substantially intact its present business organization, (ii) keep available the services of its present key officers and employees and (iii) preserve its relationships with key customers, suppliers, distributors, licensors, licensees, and others with which it has significant business dealings. In addition, except as permitted by but subject to the terms of this Agreement, and the transactions contemplated herebyforegoing exceptions, without the prior written consent of PurchaserParent (in the case of a request by the Company) or the Company (in the case of a request by Parent or Merger Sub) (which consent shall not be unreasonably withheld, conditioned or delayed), during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective TimeClosing, neither Indirect Parentexcept as set forth in Schedule 4.1, Second Intermediary Parent, First Intermediary Parent nor Parent shall permit each of the Company to(on its behalf and on behalf of its Subsidiaries), Parent and Company Merger Sub shall not do any of the following:
(a) With respect to Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parent, waive Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans to any employee, consultant or director of the Company, except as provided for under this Agreement or the attached exhibitsplans;
(b) Grant any material severance or termination pay to (i) any officer or employee (ii) any employee, except pursuant to applicable law, written agreements outstanding, or Plans or policies existing, existing on the date hereof and as previously or concurrently disclosed in writing or made available to Purchaserthe other Party, or adopt in the case of the Company and its Subsidiaries except in connection with the promotion, hiring or firing of any new severance plan, or amend or modify or alter employee in any manner any severance plan, agreement or arrangement existing on the date hereof or hire any new employees or consultantsordinary course of business consistent with past practice;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify any material rights to the Company any Intellectual Property, Property or enter into grants to transfer or license to any person future patent rights, other than in the ordinary course of business consistent with past practices;
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock (other than any such dividend or distribution by a Subsidiary of the Company to the Company or another such Subsidiary), or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock or other equity securities or ownership interests of the Company or Parent, except, in the case of the Company, pursuant to the terms of a Plan or any Company Derivative Securities outstanding on the date hereof in accordance with the applicable terms as of the date hereof;
(f) Issue, deliver, sell, authorize, pledge pledge, amend, exchange, settle or otherwise encumber encumber, or propose agree to any of the foregoing with respect to to, any shares of capital stockstock or other equity securities or ownership interests or any securities convertible into or exchangeable for shares of capital stock or other equity securities or ownership interests, or subscriptions, rights, warrants or options to acquire any shares of capital stock or other equity securities or ownership interests or any securities convertible into or exchangeable for shares of capital stock or other equity securities or other ownership interests, or enter into other agreements or commitments of any character obligating it to issue any such shares, equity securities or other ownership interests or convertible or exchangeable securities; provided that the foregoing shall not restrict the exercise or settlement of any Company Stock Options in effect on the date of this Agreement or grants of Company Stock Options in the ordinary course of business consistent with past practice and the issuance of shares of Company Common Stock (or other class of equity security of the Company, as applicable) pursuant to the terms of the Company Preferred Stock, the Company Convertible Notes and the Company Warrants, in each case in accordance with the applicable terms as of the date hereof;
(g) Cause, permit or propose Amend its Charter Documents in any amendments to the Company Charter Documentsmaterial respect;
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to acquire outside the ordinary course of business any assets which are material, individually or in the aggregate, to the business of Parent or the Company and its Subsidiaries, taken as a whole, as applicable, or enter into any joint ventures, strategic partnerships or alliancesalliances or other arrangements that provide for exclusivity of territory or otherwise restrict such party’s ability to compete or to offer or sell any products or services to other Persons. For purposes of this paragraph, “material” includes the requirement that, as a result of such transaction, financial statements of the acquired, merged or consolidated entity be included in the Proxy Statement/Prospectus;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets assets, except (A) sales of inventory in the ordinary course of business consistent with past practice, (B) the incurrence of Permitted Liens, (C) pursuant to existing Company Contracts delivered or made available to Parent and (D) the sale, lease or disposition of property or assets that are not material, individually or in the aggregate, to the business of such party (measured with all of its Subsidiaries, taken as a whole);
(j) Incur Except incurrences of indebtedness under the Company’s existing credit facilities (and, in the case of the Company and its Subsidiaries, extensions of credit in the ordinary course with employees and among the Company and its Subsidiaries) or as set forth on Schedule 4.1(j), incur any indebtedness for borrowed money or guarantee any such indebtedness of another personPerson or Persons (other than Affiliates), issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of CompanyParent or the Company and its Subsidiaries, as applicable, enter into any "“keep well" ” or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than in connection with the financing of ordinary course trade payables by Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parentforegoing;
(k) Adopt Except as otherwise required by applicable law or pursuant to an existing Plan, policy or Company Contract of the Company or its Subsidiaries, (i) adopt or materially amend any material employee policy or arrangementPlan (including any Plan that provides for severance), or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"practice), (ii) pay any special bonus or special remuneration to any director or employee, or, except in the ordinary course of business consistent with past practicepractices, or (iii) materially increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultants, except in the ordinary course of business consistent with past practices;
(i) payPay, discharge, settle or satisfy any material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), or litigation (whether or not commenced prior to the date of this Agreement) other than the payment, discharge, settlement or satisfactionsatisfaction of any claims, liabilities or obligations in the ordinary course of business consistent with past practice practices or in accordance with their terms, or liabilities recognized or disclosed in the Company Financial Statements or in the most recent consolidated financial statements (or the notes thereto) of Company Parent SEC Reports, as provided to the Purchasers applicable, or incurred since the date of such financial statements, or (ii) waive the benefits of, agree to modify in any material manner, terminate, release any person from or knowingly fail to enforce any material confidentiality or similar agreement to which the Company or any of its Subsidiaries is a party or of which the Company any of its Subsidiaries is a beneficiary;
beneficiary (m) Make any individual or series of related payments outside of other than with customers and other counterparties in the ordinary course of business in excess consistent with past practices) or to which Parent is a party or of $10,000which Parent is a beneficiary, as applicable;
(nm) Except in the ordinary course of business consistent with past practicepractices, modifymodify in a manner materially adverse to the Company, amend Parent or Merger Sub, as applicable, or terminate (other than in accordance with its terms) any Material Company Contract or agreement to which Company is a party Parent Contract, as applicable, or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into, renew or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company other than renewals of existing nonexclusive contracts, agreements or obligations;
(pn) Except as required by law or U.S. GAAP, revalue any of its assets in any material manner or make any material change in accounting methods, principles or practices;
(qo) Incur Except in the ordinary course of business consistent with past practices, incur or enter into any agreement, contract or commitment requiring Company such party to pay in excess of $10,000150,000 in any 12 month period;
(p) Settle any material litigation where the consideration given by the Party is other than monetary or to which an officer, excluding routine purchase orders consistent director or employee of such Person is a party in his or her capacity as such;
(q) Make or rescind any Tax elections that, individually or in the aggregate, would be reasonably likely to adversely affect in any material respect the Tax liability or Tax attributes of such party, settle or compromise any material income tax liability outside the ordinary course of business or, except as required by applicable law, change any material method of accounting for Tax purposes or prepare or file any Return in a manner materially inconsistent with past practicespractice;
(r) Settle Form or establish any material litigationsubsidiary except in the ordinary course of business consistent with prior practice or as contemplated by this Agreement;
(s) Make Permit, in the case of the Company, the Company, any Subsidiary of Company or change the administrator of any election Plan of the Company or its Subsidiaries or, in respect the case of TaxesParent or Merger Sub, adopt or change any accounting method in respect of TaxesParent, file any Tax Returns Merger Sub or any amendment of their respective Subsidiaries or the administrator of any Plan of Parent, Merger Sub or any of their respective Subsidiaries, to exercise any Tax Return other than in a manner consistent with prior practicesof its discretionary rights under any Plan to provide for the automatic acceleration of any outstanding options, enter into the termination of any closing agreementoutstanding repurchase rights or the termination of any cancellation rights issued pursuant to such Plan, settle any claim or assessment in respects of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxesexcept as contemplated by this Agreement;
(t) Make capital expenditures in excess of previously budgeted amounts;
(u) Enter into any material transaction with or distribute or advance any assets or property to any of its officers, directors, partners, stockholders, managers, members or other Affiliates other than (i) the payment of salary and benefits and the advancement of expenses in the ordinary course of business consistent with prior practice or (ii) such distributions or advancements by a Subsidiary of the Company to the Company or another such Subsidiary; or
(v) Agree in writing or otherwise agree or commit to take any of the actions described in Section 5.1(a4.1(a) through (su) above; provided that, during any period of full or partial suspension of operations related to the coronavirus (COVID-19) pandemic, the Company and its Subsidiaries, may, in connection with the coronavirus (COVID-19) pandemic, take the actions described in clauses (i), (m) and (t) of Section 4.1 solely to the extent the Company reasonably determines in good faith that such actions as are reasonably necessary (1) to protect the health and safety of their respective employees and other individuals with whom they have business dealings or (2) respond to third-party supply or service disruptions caused by the coronavirus (COVID-19) pandemic.
Appears in 1 contract
Samples: Agreement and Plan of Reorganization (Pivotal Investment Corp II)
Conduct Prior to the Effective Time. 5.1 4.1 Conduct of Business by Company, Indirect Parent, Second Intermediary -------------------------------------------------------------------- Parent, First Intermediary Parent the Company and Parent. During the period from the date -------------------------------------------- of this the original Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective TimeClosing, Indirect Parenteach of the Company, Second Intermediary Parent, First Intermediary Parent and Parent shall cause the Company to and the Company Merger Sub shall, except to the extent that Purchaser the other party shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed)writing, carry on its business, business in the usual, regular and ordinary coursecourse consistent with past practices, in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulationsregulations (except where noncompliance would not have a Material Adverse Effect), pay its debts and taxes when due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve substantially intact its present business organization, (ii) keep available the services of its present officers and employees and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has significant business dealings. In addition, except as required or permitted by the terms of this Agreement, and the transactions contemplated herebyAgreement or set forth in Schedule 4.1 hereto, without the prior written consent of Purchaserthe other party, during the period from the date of this the Original Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective TimeClosing, neither Indirect Parenteach of the Company, Second Intermediary Parent, First Intermediary Parent nor Parent shall permit the Company to, and Company Merger Sub shall not do any of the following:
(a) With respect to Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parent, waive Waive any stock repurchase rights, accelerate, amend or (except as specifically provided for herein) change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans to any employee, consultant or director of the Company, except as provided for under this Agreement or the attached exhibitsplans;
(b) Grant any severance or termination pay to any officer or employee except pursuant to applicable law, written agreements outstanding, or policies existing, existing on the date hereof of the Original Agreement and as previously or concurrently disclosed in writing or made available to Purchaserthe other party, or adopt any new severance plan, or amend or modify or alter in any manner any severance plan, agreement or arrangement existing on the date hereof or hire any new employees or consultantsof the Original Agreement;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify any material rights to any Intellectual Property of the Company Intellectual Propertyor Parent, as applicable, or enter into grants to transfer or license to any person future patent rights, other than in the ordinary course of business consistent with past practices provided that in no event shall the Company or Parent license on an exclusive basis or sell any Intellectual Property of the Company, or Parent as applicable;
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Companythe Company and Parent, as applicable, including repurchases of unvested shares at cost in connection with the termination of the relationship with any employee or consultant pursuant to agreements in effect on the date of the Original Agreement;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber encumber, or propose agree to any of the foregoing with respect to, any shares of capital stock or any securities convertible into or exchangeable for shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into or exchangeable for shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such sharesshares or convertible or exchangeable securities;
(g) Cause, permit or propose any amendments to the Company Amend its Charter Documents;
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of Parent or the Company as applicable, or enter into any joint ventures, strategic partnerships or alliancesalliances or other arrangements that provide for exclusivity of territory or otherwise restrict such party’s ability to compete or to offer or sell any products or services;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets assets, except (A) sales of inventory in the ordinary course of business consistent with past practice, and (B) the sale, lease or disposition (other than through licensing) of property or assets that are not material, individually or in the aggregate, to the business of such party;
(j) Incur any indebtedness for borrowed money in excess of $25,000 in the aggregate or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Parent or the Company, as applicable, enter into any "“keep well" ” or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than in connection with the financing of ordinary course trade payables by Indirect Parent, Second Intermediary Parent, First Intermediary Parent or Parentforegoing;
(k) Adopt or amend any material employee benefit plan, policy or arrangement, any employee stock purchase or employee stock option plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "“at will"”), pay any special bonus or special remuneration to any director or employee, or, except in the ordinary course of business consistent with past practice, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultants, except in the ordinary course of business consistent with past practices;
(il) payPay, discharge, settle or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), or litigation (whether or not commenced prior to the date of this the Original Agreement) other than the payment, discharge, settlement or satisfaction, in the ordinary course of business consistent with past practice practices or in accordance with their terms, or liabilities recognized or disclosed in the Unaudited Financial Statements or in the most recent consolidated financial statements (or included in the notes thereto) of Company as provided Parent SEC Reports filed prior to the Purchasers date of the Original Agreement, as applicable, or incurred since the date of such financial statements, or (ii) waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any confidentiality or similar agreement to which the Company is a party or of which the Company is a beneficiary or to which Parent is a party or of which Parent is a beneficiary, as applicable;
(m) Make any individual or series of related payments outside of the ordinary course of business in excess of $10,000;
(n) Except in the ordinary course of business consistent with past practicepractices, modify, amend or terminate any Material Company Contract or agreement to which Company is a party Parent Contract, as applicable, or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into, renew or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company other than renewals of existing nonexclusive contracts, agreements or obligations;
(pn) Except as required by U.S. GAAP, revalue any of its assets or make any change in accounting methods, principles or practices;
(qo) Incur Except in the ordinary course of business consistent with past practices, incur or enter into any agreement, contract or commitment requiring Company such party to pay in excess of $10,000, excluding routine purchase orders consistent with past practices50,000 in any 12 month period;
(p) Engage in any action that could reasonably be expected to cause the Merger to fail to qualify as a “reorganization” under Section 368(a) of the Code;
(q) Settle any litigation to which an Insider is a party or where the consideration given by the Company is other than monetary;
(r) Settle Make or rescind any Tax elections that, individually or in the aggregate, could be reasonably likely to adversely affect in any material litigationrespect the Tax liability or Tax attributes of such party, settle or compromise any material income tax liability or, except as required by applicable law, materially change any method of accounting for Tax purposes or prepare or file any Return in a manner inconsistent with past practice;
(s) Make Form, establish or change acquire any election in respect of Taxessubsidiary, adopt or change any accounting method in respect of Taxes, file any Tax Returns or any amendment to any Tax Return other than in a manner consistent with prior practices, enter into any closing agreement, settle any claim or assessment in respects of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxesexcept as contemplated by this Agreement;
(t) Permit any Person to exercise any of its discretionary rights under any Plan to provide for the automatic acceleration of any outstanding options, the termination of any outstanding repurchase rights or the termination of any cancellation rights issued pursuant to such plans;
(u) Make capital expenditures except in accordance with prudent business and operational practices consistent with prior practice;
(v) Make or omit to take any action which would be reasonably anticipated to have a Material Adverse Effect;
(w) Enter into any transaction with or distribute or advance any assets or property to any of its officers, directors, partners, stockholders or other affiliates other than the payment of salary and benefits in the ordinary course of business consistent with past practice; or
(x) Agree in writing or otherwise agree, commit or resolve to take any of the actions described in Section 5.1(a4.1 (a) through (sw) above.
Appears in 1 contract
Samples: Agreement and Plan of Merger (Ithaka Acquisition Corp)
