Forbearance Covenants. Except (a) as expressly contemplated by this Agreement, (b) as set forth in Section 5.1 or Section 5.2 of the Company Disclosure Letter, (c) as required by applicable Law, or (d) as approved in advance in writing by the Purchaser (which approval will not be unreasonably withheld, conditioned or delayed), during the period from the execution and delivery of this Agreement until the earlier to occur of the termination of this Agreement pursuant to Article IX and the Closing, the Company will not, and will not permit any of its Subsidiaries to, directly or indirectly: (a) take any action set forth in Section 4.1 of the Stockholders Agreement; (b) acquire or agree to acquire, directly or indirectly, by purchase, merger, consolidation or otherwise, equity or assets constituting all or substantially all of the business of (or any division of the business of) another Person; (c) sell, assign, transfer, license, sublicense, abandon, permit to lapse, grant a covenant not to xxx, or otherwise dispose of any material Intellectual Property (other than non-exclusive licenses or sublicenses granted in the ordinary course of business); (d) (i) authorize for issuance, issue, deliver, sell or transfer or agree or commit to issue, deliver, sell or transfer any shares of capital stock of or other equity interest or convertible security in the Company or any of its Subsidiaries or other rights of any kind to acquire, any shares of capital stock of or any other equity interest in the Company or any of its Subsidiaries, other than (x) the issuance of capital stock or other equity interests pursuant to any Employee Plan or (y) the issuance of capital stock or other equity interests from any wholly owned Subsidiary to the Company or any other wholly owned Subsidiary of the Company, (ii) amend or modify any term or provision of any of the Company’s outstanding equity securities or (iii) accelerate or waive any restrictions pertaining to the vesting of any Company equity-based awards or warrants or other rights of any kind to acquire any shares of capital stock or other equity interests in the Company; (e) propose or commit to reclassify, combine, split or subdivide 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, shares of capital stock of the Company or any of its Subsidiaries, except for, with respect to any Subsidiary of the Company, any intercompany restructuring, recapitalization or similar transaction that will not have a Company Material Adverse Effect; (f) enter into, amend or terminate any Contract with Starboard Value LP or any of its Affiliates; (g) except as required under applicable Law or the terms of any Employee Plan existing as of the date of this Agreement, (i) increase the compensation or benefits payable to any current or former director or executive officer of the Company or any employee of the Company whose annual base salary is at least $300,000 (in each case, other than annual merit increases in the ordinary course of business) or (ii) enter into any new, or amend any existing, employment, severance, change in control, retention, bonus guarantee, or collective bargaining agreement or similar agreement or arrangement; (i) make any loans, advances or capital contributions to, or investments in, any other Person, other than investments by the Company or a wholly owned Subsidiary of the Company to a wholly owned Subsidiary of the Company or the Company or advances of expenses to any director, officer, employee or agent of the Company in connection with advancement obligations in effect on the date of this Agreement, (ii) incur, assume or modify any material indebtedness or (iii) assume, guarantee, endorse, xxxxx x xxxx (other than a Permitted Lien) on any of the Company’s assets as security or otherwise become liable for indebtedness of another Person (excluding the Company or any of its Subsidiaries); or (i) agree, resolve, authorize or commit to take any action prohibited by this Section 5.2.
Appears in 3 contracts
Samples: Series B Convertible Preferred Stock Purchase Agreement (Comscore, Inc.), Series B Convertible Preferred Stock Purchase Agreement (Comscore, Inc.), Series B Convertible Preferred Stock Purchase Agreement (Comscore, Inc.)
Forbearance Covenants. (a) Except (aA) as expressly contemplated by this Agreement, (bB) as set forth in Section Sections 5.1 or Section 5.2 of the Company Disclosure Letter, (cC) as required by applicable LawLaw or Order, or Contracts set forth in Sections 5.1 or 5.2 of the Company Disclosure Letter or (dD) as approved in advance or requested by Parent in writing by the Purchaser (which approval will shall not be unreasonably withheld, conditioned or delayed), during the period from the execution and delivery of this Agreement until the earlier to occur of the termination of this Agreement pursuant to Article IX VIII and the ClosingEffective Time, the Company will shall not, and will shall not permit any of its Subsidiaries Subsidiaries, to, directly or indirectly:
(ai) take any action set forth in Section 4.1 amend the Organizational Documents of the Stockholders AgreementCompany or any of its Subsidiaries;
(bii) acquire propose or agree to acquireadopt a plan of complete or partial liquidation, directly or indirectly, by purchasedissolution, merger, consolidation consolidation, restructuring, recapitalization or otherwise, equity or assets constituting all or substantially all of the business of (or any division of the business of) another Personother reorganization;
(ciii) sell, assign, transfer, license, sublicense, abandon, permit to lapse, grant a covenant not to xxx, or otherwise dispose of any material Intellectual Property (other than non-exclusive licenses or sublicenses granted in the ordinary course of business);
(d) (i) authorize for issuance, issue, deliver, sell or transfer deliver, or agree or commit to issue, sell or deliver, any Company Securities or securities of any of the Subsidiaries of the Company, except (i) upon the settlement of Convertible Notes in accordance with the terms of the Convertible Notes Indentures; (ii) as required under the terms of any agreements in effect on the date of this Agreement, including any offer letters, employment agreements or award agreements, or upon the settlement of Company RSUs or Company PSUs in accordance with the applicable terms; (iii) for the issuance, delivery or sale of (or agreement to issue, sell or transfer deliver) equity securities by any shares Subsidiary of capital stock of or other equity interest or convertible security in the Company to the Company; or (iv) as contemplated by Section 5.2(a)(vii);
(iv) except for transactions solely among the Company and its Subsidiaries or solely among the Company’s Subsidiaries, directly or indirectly, reclassify, split, combine, subdivide or redeem, repurchase, purchase or otherwise acquire or amend the terms of, any of its Subsidiaries or other rights of any kind to acquire, any shares of capital stock of or any other equity interest in the Company or any of its Subsidiaries, other than (x) the issuance of capital stock or other equity interests pursuant to any Employee Plan or voting interest, other than (yi) the issuance of capital stock or other equity interests from any wholly owned Subsidiary with respect to the Company Convertible Notes or any other wholly owned Subsidiary of the Company, Capped Calls; (ii) amend the withholding or modify any term sale of shares of Company Capital Stock to satisfy Tax obligations incurred in connection with the settlement of Company RSUs or provision of any of the Company’s outstanding equity securities Company PSUs in accordance with their terms; or (iii) accelerate the acquisition by the Company of Company RSUs or waive Company PSUs in connection with the forfeiture of such awards in accordance with their terms;
(i) declare, set aside or pay any restrictions pertaining to the vesting of any Company equity-based awards or warrants dividend or other rights distribution (whether in cash, shares or property or any combination thereof) in respect of any kind to acquire any shares of capital stock or other equity interests or voting interest, or make any other actual, constructive or deemed distribution in the Company;
(e) propose or commit to reclassify, combine, split or subdivide any capital stock respect of the Company or issue or authorize the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of capital stock or other equity or voting interest, except for cash dividends made by any direct or indirect wholly owned Subsidiary of the Company to the Company or any one of its other wholly owned Subsidiaries, except for, with respect to ; or (ii) pledge or encumber (other than Permitted Liens not securing Indebtedness) any Subsidiary shares of the Company, any intercompany restructuring, recapitalization its capital stock or similar transaction that will not have a Company Material Adverse Effectother equity or voting interest;
(fvi) enter into, amend or terminate any Contract with Starboard Value LP or any of its Affiliates;
(g) except as required under applicable Law or the terms of any Employee Plan existing as of the date of this Agreement, (i) increase the compensation incur, assume or benefits payable to suffer any current indebtedness for borrowed money or former director or executive officer of the Company or issue any employee of the Company whose annual base salary is at least $300,000 (debt securities, except, in each case, other than annual merit increases for (A) trade payables incurred in the ordinary course of business; (B) loans or advances to direct or indirect wholly owned Subsidiaries of the Company; (C) short-term debt incurred to fund operations of the business in the ordinary course of business; (D) obligations incurred pursuant to business credit cards in the ordinary course of business; and (E) the incurrence of indebtedness under the Company Loan Agreement (including as amended, substituted or replaced as permitted by this Agreement); (ii) enter into any newassume, or amend any existing, employment, severance, change in control, retention, bonus guarantee, endorse or collective bargaining agreement otherwise become liable or similar agreement responsible (whether directly, contingently or arrangement;
otherwise) for the obligations of any other Person, except with respect to obligations of direct or indirect wholly owned Subsidiaries of the Company; (iiii) make any loans, advances or capital contributions to, or investments in, any other Person, except for (1) extensions of credit to customers; (2) advances to directors, officers and other than investments by the Company employees; (3) loans or a advances between wholly owned Subsidiary of the Company to a wholly owned Subsidiary Subsidiaries of the Company or between the Company and its Subsidiaries; and (4) capital contributions in or to wholly owned Subsidiaries of the Company, in each case of clauses (1) through (4), in the ordinary course of business; or (iv) mortgage or pledge any assets, tangible or intangible, or create or suffer to exist any lien thereupon, except for any Permitted Liens;
(vii) except as required pursuant to the terms of any Employee Plan or Collective Bargaining Agreement, or any Contract relating thereto, in accordance with its terms as in effect on the date of this Agreement or as set forth in Section 5.2(a)(vii) of the Company Disclosure Letter, (a) enter into, adopt, amend or modify in any material respect or terminate any Employee Plan, other than in connection with routine, immaterial or ministerial amendments to health and welfare plans that do not materially increase benefits or result in a material increase in administrative costs; (b) increase the compensation or benefits of any current or former director, executive officer or employee of the Company or advances any of expenses its Subsidiaries or pay any amount or provide any benefit not provided under any Employee Plan in accordance with its terms as in effect as of the date of this Agreement; (c) grant or pay (or promise to grant or pay) any bonus or other incentive compensation, severance, retention, transaction, change of control, deferred compensation or similar payment or benefit to any current or former director, officer, employee or individual independent contractor of the Company or any of its Subsidiaries; (d) take any action to accelerate the vesting, lapsing of restrictions or any payment or benefit, or the funding of any payment or benefit, payable or to become payable to any current or former director, officer, employee or individual independent contractor of the Company or any of its Subsidiaries; or (e) hire or engage or terminate (other than for cause or upon resignation) any director, officer, employee or agent individual independent contractor, other than, in the ordinary course of business, any director, officer or employee who is not a member of the Executive Group or any individual independent contractor with an annual cash fee of less than three hundred thousand dollars ($300,000); except, in the case of each of clauses (a), (b) and (c), in conjunction with ordinary course new hires, promotions, changes in job position or status of any director, officer or employee who is not a member of the Executive Group or any individual independent contractor with an annual cash fee of less than three hundred thousand dollars ($300,000);
(viii) waive, release or amend any material restrictive covenant obligation of any current or former employee, independent contractor, officer or director of the Company or its Subsidiaries;
(ix) settle any pending or threatened Legal Proceeding, except for the settlement of any Legal Proceeding that (i) is for solely monetary payments of no more than two million dollars ($2,000,000) individually and ten million dollars ($10,000,000) in connection with advancement the aggregate and does not impose any material non-monetary obligations in effect on on, or restrictions against, or require an admission of liability by, the date of this Agreement, Company or its Subsidiaries; or (ii) incuris settled in compliance with Section 6.12;
(x) materially change the Company’s or its Subsidiaries’ methods, assume principles or modify practices of financial accounting or annual accounting period, except as required by GAAP, Regulation S-X of the Exchange Act (or any interpretation thereof) or by any Governmental Authority;
(xi) (i) make, change or revoke any material indebtedness Tax election; (ii) settle, consent to or compromise any material Tax liability or any audit, examination or other proceeding relating to a material amount of Taxes; (iii) assumeadopt or change any accounting method or change an annual accounting period; (iv) file any amended material Tax Returns; (v) enter into any “closing agreement” within the meaning of Section 7121 of the Code (or any analogous or similar provision of state, guarantee, endorse, xxxxx x xxxx local or non-U.S. Law); (vi) surrender any right to claim a refund for material Taxes (other than solely as a Permitted Lien) on any result of the Company’s assets as security passage of time); (vii) consent to any extension or otherwise become liable for indebtedness waiver of another Person (excluding any limitation period with respect to any material Tax claim or assessment relating to the Company or any of its Subsidiaries); or
or (viii) request in writing any material Tax ruling from any Governmental Authority, (ix) file any material Tax Returns inconsistent with past practice, (x) except in the ordinary course of business, agree to an extension or waiver of the statute of limitations with respect to a material amount of Taxes, provided, that clauses (vii) and (x) shall not prevent the Company or any of its subsidiaries from obtaining any extensions of time to file any Tax Returns that are granted automatically or routinely by an applicable Governmental Authority; (xii) incur or commit to incur any capital expenditures other than (i) agreeconsistent with, resolveor with respect to any item set forth in the budget, authorize not more than ten percent (10%) in excess of the amount allocated in, the capital expenditure budget for such item for the fiscal year 2024, set forth in Section 5.2(a)(xii) of the Company Disclosure Letter and (ii) pursuant to obligations imposed by any Material Contract or commit Real Property Lease in effect as of the date of this Agreement and made available to take any action prohibited by Parent prior to the date of this Section 5.2.Agreement;
Appears in 2 contracts
Samples: Merger Agreement (Infinera Corp), Merger Agreement (Nokia Corp)
Forbearance Covenants. Except (a) as expressly contemplated by this Agreement, (bA) as set forth in Section 5.1 or Section 5.2 of the Company Disclosure Letter, ; (c) as required by applicable Law, or (dB) as approved in advance in writing by the Purchaser Parent (which approval will not be unreasonably withheld, conditioned or delayed); or (C) as expressly contemplated by the terms of this Agreement, during the period from the execution and delivery of this Agreement until the earlier to occur of the termination of this Agreement pursuant to Article IX and the ClosingPre-Closing Period, the Company will not, and will not permit any of its Subsidiaries Subsidiaries, to, directly or indirectly:
(a) take amend or otherwise change the Charter, the Bylaws or any action set forth in Section 4.1 of the Stockholders Agreementsimilar organizational document;
(b) acquire propose or agree to acquireadopt a plan of complete or partial liquidation, directly or indirectly, by purchasedissolution, merger, consolidation consolidation, restructuring, recapitalization or otherwise, equity or assets constituting all or substantially all of the business of (or any division of the business of) another Personother reorganization;
(c) issue, grant, sell, assign, transfer, license, sublicense, abandon, permit to lapse, grant a covenant not to xxx, or otherwise dispose of any material Intellectual Property (other than non-exclusive licenses or sublicenses granted in the ordinary course of business);
(d) (i) authorize for issuance, issue, deliver, sell or transfer or agree or commit to issue, delivergrant, sell or transfer deliver, any Company Securities (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), except (i) for the issuance, delivery or sale of shares of Company Common Stock pursuant to Company Stock-Based Awards or Company Options outstanding as of the Capitalization Date or pursuant to the ESPP, in each case, in accordance with their terms in effect on the date of this Agreement; or (ii) issuances of new hire Company Options or Company Stock-Based Awards covering up to 100,000 shares of Company Common Stock in the aggregate that are required under agreements in effect on the date of this Agreement (including any offer letters or similar agreements entered into or extended as of the date of this agreement), provided that the detail of such issuances have been made available to Parent and such issuances are evidenced by a form of award agreement that is consistent with those used for other Service Providers;
(d) directly or indirectly acquire, repurchase or redeem any securities, except for (i) with respect to Company Securities pursuant to the terms and conditions of Company Stock-Based Awards or Company Options outstanding as of the date of this Agreement in accordance with their terms as in effect on the date of this Agreement in order to satisfy Tax obligations with respect to awards granted pursuant to Company Stock Plans or pay the exercise price of Company Options; or (ii) transactions between the Company and any of its direct or indirect Subsidiaries;
(i) acquire (by merger, consolidation or acquisition of stock or assets) any other Person or any material equity interest therein or enter into any joint venture, partnership, limited liability corporation or similar arrangement with any third Person; or (ii) dispose of (by merger, consolidation, disposition of assets, lease or otherwise), directly or indirectly, any material assets, properties, interests or businesses, other than in the ordinary course of business and as otherwise permitted under this Section 5.2;
(f) acquire, or agree to acquire, fee ownership (or its jurisdictional equivalent) of any real property;
(g) (i) adjust, split, subdivide, combine or reclassify any shares of capital stock of stock, or other equity interest issue or convertible security in the Company authorize or any of its Subsidiaries or other rights of any kind to acquire, any shares of capital stock of or any other equity interest in the Company or any of its Subsidiaries, other than (x) propose the issuance of any other Company Securities in respect of, in lieu of or in substitution for, shares of its capital stock or other equity interests pursuant to any Employee Plan or (y) the issuance of capital stock or other equity interests from any wholly owned Subsidiary to the Company or any other wholly owned Subsidiary of the Company, voting interest; (ii) amend declare, set aside, establish a record date for, authorize or modify pay any term or provision of any of the Company’s outstanding equity securities or (iii) accelerate or waive any restrictions pertaining to the vesting of any Company equity-based awards or warrants dividend or other rights distribution (whether in cash, shares or property or any combination thereof) in respect of any kind to acquire any shares of capital stock or other equity interests or voting interest, or make any other actual, constructive or deemed distribution in the Company;
(e) propose or commit to reclassify, combine, split or subdivide any capital stock respect of the Company or issue or authorize the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of capital stock or other equity or voting interest, except for cash dividends made by any direct or indirect wholly owned Subsidiary of the Company to the Company or any one of its other wholly owned Subsidiaries, except for, with respect to ; (iii) pledge or encumber any Subsidiary of the Company, any intercompany restructuring, recapitalization or similar transaction that will not have a Company Material Adverse Effect;
(f) enter into, amend or terminate any Contract with Starboard Value LP or any shares of its Affiliates;
capital stock or other equity or voting interest; or (giv) except as required under applicable Law or modify the terms of any Employee Plan existing as shares of the date of this Agreement, its capital stock or other equity or voting interest;
(h) (i) increase incur, assume, suffer or modify the compensation terms of any Indebtedness or benefits payable issue any debt securities, except (A) short-term debt incurred to any current or former director or executive officer fund operations of the Company or any employee of the Company whose annual base salary is at least $300,000 (in each case, other than annual merit increases business in the ordinary course of businessbusiness consistent with past practice; (B) for loans or advances between Subsidiaries of the Company or between the Company and Subsidiaries; and (C) revolving Indebtedness incurred pursuant to the Credit Agreement to fund operations of the business in the ordinary course of business consistent with past practice; (ii) enter into any newassume, or amend any existing, employment, severance, change in control, retention, bonus guarantee, endorse or collective bargaining agreement otherwise become liable or similar agreement responsible (whether directly, contingently or arrangement;
otherwise) for the obligations of any other Person, except with respect to obligations of wholly owned Subsidiaries of the Company; (iiii) make any loans, advances or capital contributions to, or investments in, any other Person, except for (A) extensions of credit to customers in the ordinary course of business; (B) advances to directors, officers and other than investments by employees for travel and other business-related expenses, in each case in the Company ordinary course of business and in compliance in all material respects with the Company’s policies related thereto; and (C) for loans or a advances solely between wholly owned Subsidiary of the Company to a wholly owned Subsidiary Subsidiaries of the Company or between the Company or advances of expenses to any director, officer, employee or agent and its wholly owned Subsidiaries and capital contributions in wholly owned Subsidiaries of the Company; or (iv) mortgage, pledge or otherwise encumber any assets, tangible or intangible, or create or suffer to exist any lien thereon (other than Permitted Liens);
(i) except (i) in order to comply with applicable Law, (ii) as required pursuant to the terms of any Company in connection with advancement obligations Benefit Plan in effect on the date of this AgreementAgreement and made available to Parent, (ii) incur, assume or modify any material indebtedness or (iii) assumeas required by this Agreement or (iv) pursuant to the proposed budget for 2020 annual base cash compensation increases, guarantee2019 bonus payouts and new hires set forth in Section 5.2(i) of the Company Disclosure Letter, endorse(A) establish, xxxxx x xxxx adopt, enter into, terminate or amend, or take any action to accelerate the vesting, payment or funding of any compensation, or benefits under, any Company Benefit Plan, including with respect to any Company Stock-Based Award or Company Option, except as permitted by clauses (B) through (D) below; (B) grant to any Service Provider whose annual base cash compensation exceeds $250,000 any increase in cash compensation, bonus or fringe or other benefits (or, in the case of any such person whose annual base cash compensation does not exceed $250,000, grant any such increase unless done in the ordinary course of business and consistent with past practice); (C) grant to any Service Provider or, increase the amount of any bonus, incentive, change in control, retention, severance, termination pay or similar payments; (D) enter into any employment, consulting, change in control, retention, severance, termination or similar agreement with any Service Provider (other than a Permitted Lienoffer letters or consulting agreements entered into with newly-hired non-officer employees or consultants in the ordinary course of business and consistent with past practice that do not include change in control, equity-based, retention, severance, notice or similar payments or obligations); (E) on hire, engage or terminate the employment or engagement of any Service Provider, other than any non-officer or employee of the Company’s assets as security or otherwise become liable for indebtedness of another Person (excluding the Company or any of its SubsidiariesSubsidiaries with an annual base cash compensation of less than $250,000 in the ordinary course of business and other than terminations for cause; or (F) communicate with the employees of the Company or any of its Subsidiaries with respect to the compensation, benefits or other treatment they will receive following the Effective Time, unless such communication is approved by Parent in advance of such communication;
(j) negotiate, enter into, amend or extend any Contract with a Union;
(k) settle, release, waive or compromise any pending or threatened material Legal Proceeding, except for the settlement of any Legal Proceedings that is (i) reflected or reserved against in the Audited Company Balance Sheet; or (ii) settled in compliance with Section 6.15;
(l) except as required by applicable Law or GAAP, (i) other than in the ordinary course of business, revalue in any material respect any of its properties or assets, including writing-off notes or accounts receivable; or (ii) make any change in any of its accounting principles or practices;
(i) make, change or revoke any material Tax election; (ii) settle or compromise any material Tax dispute, audit, investigation, proceeding, claim or assessment; (iii) consent to any extension or waiver of any limitation period with respect to any material Tax claim or assessment; (iv) surrender any material Tax refund or right thereto; (v) elect or change materially any method of accounting for Tax purposes or Tax accounting period; (vi) amend any material Tax Return; (vii) file any material Tax Return in a manner inconsistent with past practice; (viii) enter into any contractual obligation in respect of material Taxes with any Governmental Authority; or (ix) consent to any extension or waiver of the limitation period with applicable to any material Tax claim or assessment relating to the Company or any of its Subsidiaries (other than pursuant to an extension of time to file);
(n) (i) incur, authorize or commit to incur any capital expenditures in excess of $5,000,000 in the aggregate; (ii) enter into, modify, amend, extend, fail to perform the terms of or terminate any Contract that if so entered into, modified, amended, extended, failed to be performed or terminated would have a Company Material Adverse Effect; (iii) maintain insurance at less than current levels or otherwise in a manner inconsistent with past practice; (iv) engage in any transaction with, or enter into any agreement, arrangement or understanding with, any Affiliate of the Company or other Person covered by Item 404 of Regulation S-K promulgated by the SEC that would be required to be disclosed pursuant to Item 404; (v) effectuate a “plant closing,” “mass layoff” (each as defined in the United States Worker Adjustment and Retraining Notification Act) or other employee layoff event affecting in whole or in part any site of employment, facility, operating unit or employee; (vi) grant any material refunds, credits, rebates or other allowances to any end user, customer, reseller or distributor, in each case other than in the ordinary course of business; or (vii) waive, release, grant, encumber or transfer any right of material value other than in the ordinary course of business;
(o) enter into any collective bargaining agreement or agreement to form a work council or other agreement with any labor organization or works council (except to the extent required by applicable Law);
(p) adopt or implement any stockholder rights plan or similar arrangement, in each case, applicable to the Merger or any other transaction to be consummated pursuant to Parent’s rights under Section 5.3(e)(i)(2) or Section 5.3(e)(ii)(3); or
(iq) agree, resolveenter into, authorize any of, or agree or commit to enter into a Contract to take any action of the actions prohibited by this Section 5.2.
Appears in 2 contracts
Samples: Merger Agreement (Forescout Technologies, Inc), Merger Agreement (Forescout Technologies, Inc)
Forbearance Covenants. Except (a) as expressly contemplated by this Agreement, (b) as set forth During the Pre-Closing Period and in Section 5.1 or Section 5.2 of each case subject to the Company Disclosure Letter, (c) as required by applicable Law, or (d) as approved in advance in writing by the Purchaser (which approval will not be unreasonably withheld, conditioned or delayed), during the period from the execution and delivery of this Agreement until the earlier to occur of the termination of this Agreement pursuant to Article IX and the ClosingCovenant Exceptions, the Company will not, and will not permit any of its Subsidiaries Subsidiaries, to, directly or indirectly:
(a) take amend or otherwise change the Charter, the Bylaws or any action set forth in Section 4.1 of the Stockholders Agreementother similar organizational document or governing documents;
(b) acquire propose or agree to acquireadopt a plan of complete or partial liquidation, directly or indirectly, by purchasedissolution, merger, consolidation consolidation, restructuring, recapitalization or otherwise, equity or assets constituting all or substantially all of the business of (or any division of the business of) another Personother reorganization;
(c) issue, sell, assigngrant, transferpledge, licenseencumber, sublicense, abandon, permit to lapse, grant a covenant not to xxx, transfer or otherwise dispose of any material Intellectual Property (other than non-exclusive licenses or sublicenses granted in the ordinary course of business);
(d) (i) authorize for issuance, issue, deliver, sell or transfer or agree or commit to issue, sell, grant, pledge, encumber, transfer or deliver, sell any of its equity securities (whether through the issuance or transfer granting of options, equity-based awards, warrants, commitments, subscriptions, rights to purchase or otherwise), except, in each case, (i) for the issuance, delivery or sale of shares of Company Class A Common Stock or Company Class B Common Stock pursuant to Company Equity-Based Awards outstanding as of the date of this Agreement or pursuant to the ESPP, in each case in accordance with and required by their terms; or (ii) in connection with a conversion of shares of Company Class B Common Stock into Company Class A Common Stock pursuant to the terms of the Charter;
(d) directly or indirectly acquire, repurchase or redeem any of its equity securities, except, in each case, (i) as required pursuant to the terms and conditions of Company Equity-Based Awards outstanding as of the date of this Agreement in accordance with their terms or to otherwise satisfy Tax obligations with respect to Company Equity-Based Awards outstanding on the date of this Agreement or to pay the exercise price of Company Options outstanding on the date of this Agreement; (ii) in connection with a conversion of shares of Company Class B Common Stock into Company Class A Common Stock pursuant to the terms of the Charter; or (iii) for transactions between the Company and any of its Subsidiaries;
(e) (i) adjust, split, subdivide, combine or reclassify any of its capital stock or other equity or voting interests; (ii) declare, set aside, establish a record date for, authorize or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any shares of its capital stock of or other equity or voting interests, or make any other actual, constructive or deemed distribution in respect of its capital stock or other equity or voting interests, except for cash dividends made by any Subsidiary of the Company to the Company or one of its other Subsidiaries; (iii) pledge or encumber any of its capital stock or other equity or voting interests; or (iv) modify the terms of any of its capital stock or other equity or voting interests;
(f) acquire (by merger, consolidation or acquisition of stock or assets or otherwise) any third Person that is an entity or any equity interest in such Person, make any equity investment in any third Person that is an entity, enter into any joint venture, partnership, limited liability company or convertible security similar arrangement with any third Person (solely with respect to assets, other than in the ordinary course of business consistent with past practice);
(g) (i) sell, transfer, mortgage, lease, license, pledge, abandon, encumber or otherwise dispose of any of its tangible properties or tangible assets to any Person, other than sales of products or non-exclusive licenses in the ordinary course of business, (ii) waive, cancel, forgive, release, settle or assign any Indebtedness owed to the Company or any of its Subsidiaries or other rights of any kind to acquire, any shares of capital stock of or any other equity interest in material claims held by the Company or any of its Subsidiaries, other than (x) the issuance of capital stock or other equity interests pursuant to Subsidiaries against any Employee Plan or (y) the issuance of capital stock or other equity interests from any wholly owned Subsidiary to the Company or any other wholly owned Subsidiary of the Company, (ii) amend or modify any term or provision of any of the Company’s outstanding equity securities Person or (iii) accelerate grant any material refunds, credits, rebates or waive any restrictions pertaining to the vesting of any Company equity-based awards or warrants or other rights of any kind to acquire any shares of capital stock or other equity interests in the Company;
(e) propose or commit to reclassify, combine, split or subdivide 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, shares of capital stock of the Company or any of its Subsidiaries, except for, with respect allowances to any Subsidiary of the Companycustomers, any intercompany restructuringdistributors, recapitalization resellers or similar transaction that will not have a Company Material Adverse Effect;
(f) enter into, amend or terminate any Contract with Starboard Value LP or any of its Affiliates;
(g) except as required under applicable Law or the terms of any Employee Plan existing as of the date of this Agreement, (i) increase the compensation or benefits payable to any current or former director or executive officer of the Company or any employee of the Company whose annual base salary is at least $300,000 (in each case, channel partners other than annual merit increases in the ordinary course of businessbusiness consistent with past practice;
(h) or (ii) enter into any newacquire, or amend agree to acquire, fee ownership (or its jurisdictional equivalent) of any existing, employment, severance, change in control, retention, bonus guarantee, or collective bargaining agreement or similar agreement or arrangementreal property;
(i) (i) incur or assume any Indebtedness or issue any debt securities, except, in each case, for loans or advances between wholly owned Subsidiaries of the Company or between the Company and its wholly owned Subsidiaries or ordinary course borrowed money debt (including, but not limited to, credit cards, capital leases, etc.) in an amount not to exceed $600,000 in the aggregate; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any third Person, except with respect to obligations of Subsidiaries of the Company; (iii) make any loans, advances or capital contributions to, or investments in, any third Person, except, in each case, for (A) extensions of credit to customers in the ordinary course of business consistent with past practice; (B) advances to directors, officers and other Personemployees, in each case in the ordinary course of business consistent with past practice; and (C) for loans or advances between wholly owned Subsidiaries of the Company or between the Company and its wholly owned Subsidiaries and capital contributions in or to wholly owned Subsidiaries of the Company; or (iv) mortgage, pledge or otherwise encumber any assets, tangible or intangible, or create any lien thereon (other than Permitted Liens);
(j) except as necessary to comply with applicable Law, (i) establish, adopt, enter into, terminate or amend, or take any action to accelerate the vesting, payment or funding of any compensation, or benefits under, any Company Benefit Plan or any other benefit or compensation plan, agreement, contract, program, policy or arrangement that would be a Company Benefit Plan if in existence on the date of this Agreement; (ii) grant to any Service Provider whose annual compensation, bonus and other benefits exceeds $150,000, in the aggregate, any increase in cash or equity or equity-based incentive awards, compensation, bonus, severance, or material fringe or other material benefits, and, in the case of any Service Provider whose annual compensation, bonus and other benefits are equal to or less than $150,000, grant any such increase in cash or equity or equity-based incentive awards outside of the ordinary course of business; (iii) grant to any Service Provider any increase in change in control, retention, severance or termination pay; (iv) hire, engage or otherwise enter into any employment, consulting, change in control, retention, severance or termination agreement with any Service Provider with an annual compensation, bonus and other benefits in excess of $150,000 in the aggregate; or (v) terminate, furlough or temporarily lay off any Service Provider whose annual compensation, bonus and other benefits would exceed $150,000 in the aggregate, other than investments terminations for cause;
(k) (i) negotiate, modify, extend, terminate, or enter into any Labor Agreement or (ii) recognize or certify any labor union, labor organization, works council, or group of employees as the bargaining representative for any employees of the Company or its Subsidiaries;
(l) waive or release any noncompetition, nonsolicitation, nondisclosure, noninterference, nondisparagement, or other restrictive covenant obligation of any Service Provider;
(m) settle, release, waive or compromise any pending or threatened Legal Proceeding, including any claim that provides for any injunctive or other non-monetary relief, except for the settlement of any Legal Proceedings (i) solely for monetary damages in an amount not in excess of $250,000 individually or $500,000 in the aggregate and without an admission of any guilt; or (ii) settled in compliance with Section 6.15, in the case of each of clauses (i) through (iii), solely to the extent that prior written notice has been provided to Parent describing the material details of such settlement;
(n) except as required by applicable Law or GAAP make any change in any of its accounting principles or practices;
(i) change or, except as consistent with past practices, make any material Tax election; (ii) settle or compromise any material Tax claim or assessment; (iii) consent to any extension or waiver of any limitation period with respect to any material Tax claim or assessment; (iv) file an amended Tax Return that would materially increase the Taxes payable by the Company or its Subsidiaries; (v) surrender any right to claim a wholly owned Subsidiary refund of a material amount of Taxes; or (vi) enter into a closing agreement with any Governmental Authority regarding any material Tax;
(p) sell, assign, abandon, or otherwise dispose of, allow to lapse, terminate or expire, or fail to enforce, maintain or protect, or license (except for non-exclusive licenses granted to customers in the ordinary course of business) or otherwise transfer any of the material Company Owned Intellectual Property, or any portion thereof;
(q) modify in any material respect (i) any of its policies related to Data Security Requirements, or (ii) any administrative, technical or physical safeguards related to privacy or data security, except, in each case of (i) and (ii), (A) to remediate any privacy or security issue, (B) to enhance data security or integrity, (C) to comply with Data Security Requirements, or (D) as otherwise directed or required by a Governmental Authority;
(r) incur, authorize or commit to incur any capital expenditures other than (i) as set forth in Section 5.2(r) of the Company to Disclosure Letter, or (ii) expenditures that do not exceed $500,000 individually or $1,000,000 in the aggregate;
(i) enter into any Contract that would constitute a wholly owned Subsidiary Material Contract (other than Contracts that only constitute Material Contracts because they fall within clause (ii), (iii), (iv) or (v) of the Company or the Company or advances definition of expenses to any director, officer, employee or agent of the Company in connection with advancement obligations Material Contracts) if it were in effect on as of the date of this Agreement, (ii) incur, assume amend or modify in any material indebtedness adverse respect, or waive any material rights under, any Material Contract, or (iii) assume, guarantee, endorse, xxxxx x xxxx (terminate any Material Contract other than a Permitted Lienin the ordinary course of business;
(t) on any of the Company’s assets as security maintain insurance at less than current levels or otherwise become liable for indebtedness in a manner inconsistent with past practice;
(u) engage in any transaction with, or enter into any agreement, arrangement or understanding with, any Affiliate of another Person (excluding the Company or other Person covered by Item 404 of Regulation S-K promulgated by the SEC that would be required to be disclosed pursuant to Item 404;
(v) implement, announce or effectuate a “plant closing” or “mass layoff” (each as defined in the WARN Act) or other employee layoff event affecting in whole or in part any site of its Subsidiaries)employment, facility, operating unit or employee; or
(iw) agreeenter into, resolve, authorize or agree or commit to enter into, a Contract to take any action of the actions prohibited by this Section 5.2.
Appears in 2 contracts
Samples: Merger Agreement (KnowBe4, Inc.), Merger Agreement (Vepf Vii SPV I, L.P.)
Forbearance Covenants. Except (a1) as expressly contemplated by this Agreement, (b2) as set forth in Section 5.1 or Section 5.2 of the Company Disclosure Letter, (c3) as required by applicable Law, (4) as necessary or advisable in response to COVID-19 or any COVID-19 Measures in accordance with Section 5.1, or (d5) as approved in advance by Parent in writing by the Purchaser (which approval will shall not be unreasonably withheld, conditioned or delayeddelayed and shall be deemed not given if Parent provides no written response within seven (7) Business Days after a written request by the Company for such consent), during the period from the execution and delivery of this Agreement until the earlier to occur of the termination of this Agreement pursuant to Article IX VIII and the ClosingEffective Time, neither the Company will not, and will not permit nor any of its Subsidiaries shall, nor, to the extent permitted by applicable Law and the terms of the Affiliated Practice Documents, shall the Company or its Subsidiaries permit the Affiliated Practices to, directly or indirectly:
(a) take amend the Organizational Documents of (i) the Company, (ii) any action set forth of its Subsidiaries and (iii) any Affiliated Practices, in Section 4.1 the cases of the Stockholders Agreementclause (ii) and (iii), in any material respect;
(b) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization (other than the dissolution of any inactive Subsidiary of the Company);
(c) issue, sell, deliver or agree or commit to issue, sell or deliver any Company Securities or any capital stock or other equity or voting interest of any of its Subsidiaries, except (i) in accordance with the terms of any employment agreements or arrangements or any award agreements issued by the Company as of the date of this Agreement under the Company Stock Plan or otherwise with respect to, and upon the vesting, exercise or settlement of, Company Options, Company Restricted Stock or Company RSUs, in effect on the date of this Agreement or granted after the date hereof in compliance with this Agreement; (ii) as expressly contemplated by Section 5.2(g); or (iii) the delivery of Company Securities upon the conversion of the Company Convertible Notes in accordance with the Convertible Notes Indenture;
(d) except for transactions solely among the Company and its Subsidiaries or solely among the Subsidiaries of the Company, reclassify, split, combine, subdivide or redeem, repurchase, purchase or otherwise acquire or agree to acquireamend the terms of, directly or indirectly, by purchase, merger, consolidation any of its capital stock or otherwise, other equity or assets constituting all voting interest, other than (i) the acquisitions of shares of Company Common Stock in connection with the surrender of shares of Company Common Stock by holders of Company Options to pay the exercise price of such Company Options, (ii) the withholding of shares of Company Common Stock to satisfy Tax obligations incurred in connection with the exercise of Company Options, the vesting of Company Restricted Stock and the vesting and settlement of Company RSUs, (iii) the acquisition by the Company of Company Options, Company Restricted Stock and Company RSUs in connection with the forfeiture of such awards, (iv) as required by any Employee Plan as in effect on the date of this Agreement or substantially all amended after the date hereof as permitted pursuant to Section 5.2(g) and (v) pursuant to the Capped Call Transactions;
(e) establish a record date for, declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any shares of capital stock or other equity or voting interest of the Company or its Subsidiaries (excluding, for the avoidance of doubt, the Company Convertible Notes), except for any dividends or other distributions made by any direct or indirect Subsidiary of the Company to the Company or one of its other Subsidiaries;
(f) incur, assume, endorse, guarantee, or otherwise become liable for any indebtedness for borrowed money or any material obligation of another Person, including by way of a guarantee or an issuance or sale of debt securities, or issue or sell options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, enter into any “keep well” or other Contract to maintain any financial statement or similar condition of another Person, or enter into any arrangement having the economic effect of any of the foregoing, except (i) borrowings under the Company Credit Agreement in amounts available thereunder as of the date of this Agreement or under facilities that replace, renew, extend, refinance or refund the Company Credit Agreement (including indebtedness incurred to repay or refinance related fees and expenses) provided, that (A) no such replacement, renewal, extension, refinancing or refund shall increase the principal amount of such indebtedness that is the subject thereof, and (B) such refinanced indebtedness shall be on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the indebtedness being replaced, (ii) letters of credit, performance bonds and surety bonds entered into in the ordinary course of business consistent with past practice, (iii) any indebtedness among the Company and its wholly owned Subsidiaries or among the Company’s wholly owned Subsidiaries, and (iv) any additional indebtedness in an amount not to exceed (x) $225,000,000 minus (y) any amounts drawn under clause (i) hereof in the aggregate at any time incurred by the Company or any of its Subsidiaries; provided, that in each case, such indebtedness does not contain any terms or conditions that would prevent or hinder the Merger or other Transactions and only contains prepayment penalties that are consistent with market terms for such type of indebtedness;
(g) (i) adopt, amend or modify in any material respect, or terminate any Employee Plan; or (ii) increase the compensation of any director, officer, employee or other Service Provider, except (A) in the case of clause (i), (I) amendments and modifications, in the ordinary course of business consistent with past practice and (II) entering into offer letters that contemplate “at will” employment in conjunction with new hires permitted by this Section 5.2 and (B) in the case of clause (ii), (I) to the extent required pursuant to any Employee Plan; (II) in conjunction with annual renewal or plan design changes for the Employee Plans that are made in the ordinary course of business consistent with past practice and do not materially increase the cost to the Company and its Subsidiaries; and (III) in conjunction with new hires, promotions and changes in job position or status of any current employee or other Service Provider who is both (x) not entitled to earn an annual base salary or wage rate that equals or exceeds $275,000 and (y) terminable “at will”; provided that in the case of each of clause (I) through (III), any such action is consistent with past practice;
(h) compromise or settle (or agree to compromise or settle) any threatened or actual Legal Proceeding other than (i) in accordance with Section 5.2(h) of the Company Disclosure Letter and (ii) any compromise or settlement where the amount paid or to be paid by the Company or any of its Subsidiaries in excess of the amounts set forth in Section 5.2(h) of the Company Disclosure Letter is covered by insurance coverage maintained by the Company or any of its Subsidiaries; provided, that, in each case, no such compromise or settlement involves non-monetary relief or any admissions of liability or responsibility by the Company Group or any Affiliated Practice;
(i) change the Company’s or its Subsidiaries’ methods, principles or practices of financial accounting, except as required by GAAP or Regulation S-X of the Exchange Act (or any division of the business of) another Personinterpretation thereof);
(cj) sellincur or commit to incur any capital expenditures other than during the years ended December 31, assign2023 and December 31, transfer2024, licensein each case, sublicenseamounts not in excess of 115% of the Company’s actual capital expenditure spend for the year ended December 31, abandon2022;
(i) other than in the ordinary course of business consistent with past practice and in each case, permit subject to lapsethe other clauses of this Section 5.2, grant a covenant not to xxxmaterially modify or materially amend, waive, release, assign or settle any material rights, claims or benefits under, or otherwise dispose terminate (other than any Material Contract or Material Real Property Lease that has expired in accordance with its terms) any Material Contract or Material Real Property Lease (including any Contract that would be deemed a Material Contract or Material Real Property Lease if it had been entered into prior to the date of this Agreement), (ii) other than as set forth on Section 5.2(k) of the Company Disclosure Letter or with respect to any material Intellectual Material Contract of the type listed in subclauses (i), (ii), (v), (vi), (viii), (ix), (xi), (xiii) and (xv) of Section 3.22(a), enter into any Contract that would have been a Material Contract had it been entered into prior to the date of this Agreement or (iii) enter into any Contract that would have been a Material Real Property Lease had it been entered into prior to the date of this Agreement, other than with respect to any Contract having an annual rental value of less than $400,000 entered into in the ordinary course of business consistent with past practice;
(l) license (other than non-exclusive licenses or sublicenses granted in the ordinary course of business), dedicate to the public, abandon, disclaim, sell, assign, transfer or encumber (other than Permitted Liens), or contribute as open source software, any material Owned Intellectual Property;
(dm) make any loans or advances to any other Person, other than (i) authorize for issuance, issue, deliver, sell or transfer or agree or commit to issue, deliver, sell or transfer any shares of capital stock of or other equity interest or convertible security in the Company or any of its Subsidiaries or other rights of any kind to acquire, any shares of capital stock of or any other equity interest Affiliated Practices in the Company ordinary course of business or (ii) accounts receivable and extensions of credit in the ordinary course of business and advances of expenses to employees, in the case of sub-clauses (i) and (ii), in the ordinary course of business consistent with past practice;
(n) adopt, enter into, engage in negotiations for, terminate or materially amend any collective bargaining agreement or other similar agreement with an employee representative body;
(o) enter into any new line of business outside of its Subsidiariesexisting business as of the date of this Agreement;
(p) enter into or adopt any “poison pill” or similar stockholder rights plan;
(q) acquire any division, assets, properties, businesses or equity securities in any Person (including by merger, amalgamation, plan of arrangement, consolidation or acquisition of securities or assets), other than (xi) the issuance of capital stock in or other equity interests pursuant to any Employee Plan or (y) the issuance of capital stock or other equity interests from any wholly owned Subsidiary of the Company to the Company or any other wholly owned Subsidiary of the Company, (ii) amend acquisition of products and services in the ordinary course of business consistent with past practice, (iii) that do not exceed $50,000,000 in the aggregate or modify (iv) capital expenditures as contemplated by Section 5.2(j);
(r) other than in the ordinary course of business consistent with past practice or as otherwise contemplated in Section 5.2(g), hire or terminate (other than for cause) the employment or service of any term Service Provider who is entitled to earn an annual base salary or provision wage rate equal to or greater than $275,000 (or any individual who would be such a Service Provider if employed on the date hereof);
(s) sell, lease, encumber, dispose of or otherwise transfer any of the Company’s outstanding equity securities or (iii) accelerate or waive any restrictions pertaining to the vesting of any Company equity-based awards or warrants or other rights of any kind to acquire any shares of capital stock or other equity interests in the Company;
(e) propose or commit to reclassify, combine, split or subdivide 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, shares of capital stock of the Company or any of its Subsidiaries, except for, with respect to any Subsidiary of the Company, any intercompany restructuring, recapitalization or similar transaction that will not have a Company Material Adverse Effect;
’ assets (f) enter into, amend or terminate any Contract with Starboard Value LP or any of its Affiliates;
(g) except as required under applicable Law or the terms of any Employee Plan existing as of the date of this Agreement, (i) increase the compensation or benefits payable to any current or former director or executive officer of the Company or any employee of the Company whose annual base salary is at least $300,000 (in each case, other than annual merit increases in the ordinary course of business) a sale, lease or (ii) enter into any new, or amend any existing, employment, severance, change in control, retention, bonus guarantee, or collective bargaining agreement or similar agreement or arrangement;
(i) make any loans, advances or capital contributions to, or investments in, any other Person, other than investments by transfer from the Company or a wholly owned Subsidiary of the Company to a wholly owned Subsidiary of the Company Company), securities, properties, interests or businesses if the aggregate amount of consideration paid or transferred to the Company and its Subsidiaries would exceed $50,000,000 in the aggregate, other than sales of Company products and services, inventory or advances used equipment in the ordinary course of expenses business consistent with past practice;
(t) (i) change (or file a request to change) any director, officer, employee material method of Tax accounting or agent of the Company in connection with advancement obligations in effect on the date of this Agreementany annual Tax accounting period, (ii) incur, assume or modify change any material indebtedness Tax election of the Company or its Subsidiaries, (iii) assumesettle or compromise any claim, guaranteeinvestigation, endorseaudit or controversy relating to material Taxes in excess of the reserves established by the Company or its Subsidiaries for such claim, xxxxx x xxxx investigation, audit or controversy, (iv) file any amended income or other material Tax Return other than a Permitted Lienrequired by Law or (v) on waive or agree to extend the statute of limitations with respect to any Tax Return other than pursuant to extensions of time to file Tax Returns obtained in the ordinary course of business;
(u) agree, resolve or commit to take any of the Company’s assets as security actions prohibited by this Section 5.2. If any action taken or otherwise become liable for indebtedness of another Person (excluding refrained from being taken by the Company or any of its Subsidiaries); or
(i) agreeSubsidiaries is expressly permitted or addressed by one sentence or subsection of this Section 5.2 and not prohibited thereunder, resolve, authorize the taking or commit refraining from being taken of such action by the Company or any of its Subsidiaries shall be deemed not to take be in violation of any action prohibited by other sentence or subsection of this Section 5.2.
Appears in 2 contracts
Samples: Merger Agreement (CVS HEALTH Corp), Merger Agreement (Oak Street Health, Inc.)
Forbearance Covenants. Except (a) as expressly contemplated by this Agreement, (b) as set forth in Section 5.1 or Section 5.2 of the Company Disclosure Letter, (c) as required by applicable Law, Letter or (d) as approved in advance in writing by the Purchaser (which approval will not be unreasonably withheldNewco, conditioned or delayed), at all times during the period from commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant to Article IX VIII and the ClosingEffective Time, the Company will not, shall not do any of the following and will shall not permit any of its Subsidiaries toto do any of the following (it being understood and hereby agreed that if any action is expressly permitted by any of the following subsections, directly or indirectly:such action shall be expressly permitted under Section 5.1 also):
(a) take any action set forth in Section 4.1 of the Stockholders Agreementamend its Charter or bylaws or comparable organizational documents;
(b) acquire propose or agree to acquireadopt a plan of complete or partial liquidation, directly or indirectly, by purchasedissolution, merger, consolidation consolidation, restructuring, recapitalization or otherwise, equity or assets constituting all or substantially all other reorganization of the business of (Company or any division of the business of) another Personits Subsidiaries;
(c) issue, sell, assign, transfer, license, sublicense, abandon, permit to lapse, grant a covenant not to xxx, or otherwise dispose of any material Intellectual Property (other than non-exclusive licenses or sublicenses granted in the ordinary course of business);
(d) (i) authorize for issuance, issue, deliver, sell or transfer deliver or agree or commit to issue, deliver, sell or transfer deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities or any Subsidiary Securities, except for the issuance and sale of shares of capital stock Company Common Stock pursuant to Company Options or Company Stock-Based Awards outstanding as of the Capitalization Date in accordance with their terms as of the date hereof;
(d) directly or other equity interest or convertible security in the Company or any of its Subsidiaries or other rights of any kind to indirectly acquire, repurchase or redeem any shares of capital stock of Company Securities or any other equity interest in the Company or any of its Subsidiaries, Subsidiary Securities (other than (x) the issuance repurchases of capital stock or other equity interests Company Securities pursuant to any Employee Plan or (y) the issuance terms and conditions of capital stock or other equity interests from any wholly owned Subsidiary to the Company or any other wholly owned Subsidiary Stock-Based Awards outstanding as of the Company, (ii) amend or modify any term or provision date of any this Agreement in accordance with their terms as of the Company’s outstanding equity securities or (iii) accelerate or waive any restrictions pertaining to the vesting of any Company equity-based awards or warrants or other rights of any kind to acquire any shares of capital stock or other equity interests in the Companydate hereof);
(e) propose (i) adjust, split, combine or commit to reclassifyreclassify any shares of capital stock, combine, split or subdivide any capital stock of the Company or issue or authorize or propose the issuance of any other securities in respect of, in lieu of, of or in substitution for, shares of its capital stock, (ii) declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any shares of capital stock, or make any other actual, constructive or deemed distribution in respect of the shares of capital stock, except for cash dividends made by any direct or indirect wholly-owned Subsidiary of the Company to the Company or one of its Subsidiaries, (iii) pledge or encumber any shares of its capital stock or any of its other securities, or (iv) modify the terms of any shares of its capital stock or any of its other securities;
(f) (i) incur, assume or suffer any Indebtedness (including any long-term or short-term debt) or issue any debt securities, except for (A) trade payables incurred in the ordinary course of business, and (B) loans or advances to direct or indirect wholly-owned Subsidiaries, (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except with respect to obligations of direct or indirect wholly-owned Subsidiaries of the Company, (iii) make any loans, advances or capital contributions to or investments in any other Person, except for travel advances in the ordinary course of business consistent with past practice to employees of the Company or any of its Subsidiaries, except for, with respect to any Subsidiary of the Company, any intercompany restructuring, recapitalization or similar transaction that will not have a Company Material Adverse Effect;
(fiv) enter into, amend mortgage or terminate any Contract with Starboard Value LP or pledge any of its Affiliatesor its Subsidiaries’ assets, tangible or intangible, or create or suffer to exist any lien thereupon (other than Permitted Liens);
(g) except as required under applicable Law (i) enter into, adopt, amend (including acceleration of vesting), modify or terminate any bonus, profit sharing, compensation, severance, termination, option, appreciation right, performance unit, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, severance or other employee benefit agreement, trust, plan, fund or other arrangement for the terms compensation, benefit or welfare of any Employee Plan existing director, officer or employee in any manner, except in any such case as may be required by applicable law, or (ii) increase the compensation of any director, officer or employee, pay any special bonus or special remuneration to any director, officer or employee, or pay any benefit not required by any plan or arrangement as in effect as of the date hereof, except in any such case as may be required by applicable law;
(i) settle any pending or threatened material Legal Proceeding, except for the settlement of any Legal Proceedings that is (x) reflected or reserved against in the Audited Company Balance Sheet, and (y) the settlement of which is not in excess of $250,000 or (ii) settle any pending or threatened Legal Proceeding related to or arising out of this Agreement, the transactions contemplated hereby or any other Acquisition Proposal;
(i) increase the compensation except as required by applicable law or benefits payable to GAAP, revalue in any current material respect any of its properties or former director assets, including writing-off notes or executive officer of the Company or any employee of the Company whose annual base salary is at least $300,000 (in each caseaccounts receivable, other than annual merit increases in the ordinary course of business and consistent with past practice;
(j) except as may be required as a result of a change in applicable law or in GAAP, make any change in any of the accounting principles or practices used by it;
(k) (i) make or change any material Tax election, (ii) settle or compromise any material Tax liability, or (iii) consent to any extension or waiver of any limitation period with respect to any claim or assessment for material Taxes;
(l) (i) incur or commit to incur any capital expenditures, or any obligations or liabilities in connection therewith that individually or in the aggregate, are in excess of $500,000, except in the ordinary course of business consistent with past practices, (ii) waive, release, grant or transfer any right of material value, other than in the ordinary course of business, consistent with past practice, or waive any material benefits of, or agree to modify in any material adverse respect, or, subject to the terms hereof, fail to enforce, or consent to any material matter with respect to which its consent is required under, any material confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is a party, (iii) enter into, modify, amend or terminate (A) any Contract which if so entered into, modified, amended or terminated could be reasonably likely to have a Company Material Adverse Effect or (iiB) except in the ordinary course of business, any Material Contract, (iv) maintain insurance at less than current levels or otherwise in a manner inconsistent with past practice, (v) engage in any transaction with, or enter into any newagreement, arrangement or amend understanding with any existing, employment, severance, change in control, retention, bonus guarantee, or collective bargaining agreement or similar agreement or arrangement;
(i) make any loans, advances or capital contributions to, or investments in, any other Person, other than investments by the Company or a wholly owned Subsidiary of the Company to a wholly owned Subsidiary Affiliate of the Company or other Person covered by Item 404 of Regulation S-K promulgated under the Company or advances of expenses Exchange Act that would be required to any director, officer, employee or agent of the Company in connection with advancement obligations in effect on the date of this Agreementbe disclosed under such Item 404, (iivi) incureffectuate a “plant closing” or “mass layoff,” as those terms are defined in WARN, assume affecting in whole or modify in part any material indebtedness site of employment, facility, operating unit or (iii) assume, guarantee, endorse, xxxxx x xxxx (other than a Permitted Lien) on any employee of the Company’s assets as security or otherwise become liable for indebtedness of another Person (excluding the Company or any of its Subsidiaries), (vii) grant any material refunds, credits, rebates or other allowances by the Company or its Subsidiaries to any end user, customer, reseller or distributor, in each case, other than in the ordinary course of business, or (viii) abandon or allow to lapse or expire any registration or application for material Company Intellectual Property;
(m) acquire (by merger, consolidation or acquisition of stock or assets) any other Person or any material equity interest therein;
(n) sell, transfer or encumber all or any material portion of its or its Subsidiaries’ assets outside of the ordinary course of business; or
(io) agree, resolve, authorize or commit enter into a Contract to take any action of the actions prohibited by this Section 5.2. The parties hereto acknowledge and hereby agree that the restrictions set forth in this Section 5.2 are not intended to give Newco or Merger Sub, directly or indirectly, the right to control or direct the business or operations of the Company or its Subsidiaries at any time prior to the Effective Time. Prior to the Effective Time, the Company and its Subsidiaries shall exercise, consistent with the terms, conditions and restrictions of this Agreement, control and supervision over their own business and operations.
Appears in 2 contracts
Samples: Merger Agreement (Vista Equity Partners Fund III LP), Merger Agreement (Sumtotal Systems Inc)
Forbearance Covenants. Except (a) as expressly contemplated by this Agreement, (bi) as set forth in Section 5.1 or Section 5.2 of the Company Disclosure Letter, ; (c) as required by applicable Law, or (dii) as approved in advance in writing by the Purchaser Parent (which approval will not be unreasonably withheld, conditioned or delayed); or (iii) as expressly contemplated by the terms of this Agreement or required by applicable law or order, at all times during the period from commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant to Article IX VIII and the ClosingEffective Time, the Company will not, and will not permit any of its Subsidiaries Subsidiaries, to, directly or indirectly:
(a) take amend the Charter, the Bylaws, or any action set forth in Section 4.1 of the Stockholders Agreementother similar organizational document;
(b) acquire propose or agree to acquireadopt a plan of complete or partial liquidation, directly or indirectly, by purchasedissolution, merger, consolidation consolidation, restructuring, recapitalization or otherwise, equity or assets constituting all or substantially all of the business of (or any division of the business of) another Personother reorganization;
(c) issue, sell, assign, transfer, license, sublicense, abandon, permit to lapse, grant a covenant not to xxx, or otherwise dispose of any material Intellectual Property (other than non-exclusive licenses or sublicenses granted in the ordinary course of business);
(d) (i) authorize for issuance, issue, deliver, sell or transfer deliver or agree or commit to issue, deliver, sell or transfer deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities, except (A) for the issuance or sale of shares of Company Common Stock in connection with the exercise or settlement (as applicable) of the Company Equity Awards outstanding as of the date hereof in accordance with their terms as in effect on the date hereof; or (B) in connection with agreements in effect on the date hereof and made available to Parent (or the form of such agreement has been made available to Parent and any such agreement is substantially identical to such form), including the maximum amount of Company Securities to be issued thereunder;
(d) directly or indirectly acquire, repurchase or redeem any securities, except for (A) repurchases, withholdings, or cancellations of Company Securities pursuant to the terms and conditions of the Company Equity Awards outstanding as of the date hereof in accordance with their terms as in effect on the date hereof; or (B) transactions between the Company and any of its direct or indirect Subsidiaries;
(e) (A) adjust, split, combine or reclassify any shares of capital stock of stock, or other equity interest issue or convertible security in the Company authorize or any of its Subsidiaries or other rights of any kind to acquire, any shares of capital stock of or any other equity interest in the Company or any of its Subsidiaries, other than (x) propose the issuance of any other Company Securities in respect of, in lieu of or in substitution for, shares of its capital stock or other equity interests pursuant to or voting interest; (B) declare, set aside or pay any Employee Plan or (y) the issuance of capital stock dividend or other equity interests from any wholly owned Subsidiary to the Company distribution (whether in cash, shares or property or any other wholly owned Subsidiary combination thereof) in respect of the Company, (ii) amend or modify any term or provision of any of the Company’s outstanding equity securities or (iii) accelerate or waive any restrictions pertaining to the vesting of any Company equity-based awards or warrants or other rights of any kind to acquire any shares of capital stock or other equity interests or voting interest, or make any other actual, constructive or deemed distribution in the Company;
(e) propose or commit to reclassify, combine, split or subdivide any capital stock respect of the Company or issue or authorize the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of capital stock or other equity or voting interest, except for cash dividends made by any direct or indirect wholly owned Subsidiary of the Company to the Company, or any of its Subsidiaries, except for, with respect to any Subsidiary one of the Company, ’s other wholly owned Subsidiaries; (C) pledge or encumber any intercompany restructuring, recapitalization shares of its capital stock or similar transaction that will not have a Company Material Adverse Effectother equity or voting interest; or (D) modify the terms of any shares of its capital stock or other equity or voting interest;
(f) enter into(A) incur or assume any Indebtedness (including any long-term or short-term debt) or issue any debt securities, amend or terminate any Contract with Starboard Value LP or any of its Affiliates;
except (g1) except as required under applicable Law or the terms of any Employee Plan existing as of the date of this Agreement, (i) increase the compensation or benefits payable to any current or former director or executive officer of the Company or any employee of the Company whose annual base salary is at least $300,000 (in each case, other than annual merit increases for trade payables incurred in the ordinary course of business; (2) obligations incurred pursuant to business credit cards in the ordinary course of business; and (3) intercompany loans or advances between or among the Company and its direct or indirect wholly-owned Subsidiaries; or (iiB) enter into any newassume, or amend any existing, employment, severance, change in control, retention, bonus guarantee, endorse or collective bargaining agreement otherwise become liable or similar agreement responsible (whether directly, contingently or arrangementotherwise) for the obligations of any other Person, except with respect to obligations of any direct or indirect wholly owned Subsidiaries of the Company;
(ig) mortgage or pledge any of its and its Subsidiaries’ assets, tangible or intangible, or create or incur any lien thereupon (other than Permitted Liens), other than in connection with financing transactions permitted by Section 5.2(f) or consented to by Parent;
(h) make any loans, advances or capital contributions to, or investments in, any other Person, except for (1) extensions of credit to customers in the ordinary course of business; (2) advances to directors, officers and other employees for travel and other business-related expenses, in each case, in the ordinary course of business and in compliance in all material respects with the Company Group’s policies related thereto; and (3) loans, advances or capital contributions to, or investments in, the Company or any direct or indirect wholly-owned Subsidiaries of the Company;
(i) acquire, lease, license, sell, abandon, transfer, assign, guarantee, or exchange any assets, tangible or intangible (including any Company Intellectual Property), in each case in excess of $250,000 individually, and other than investments (1) the sale, lease or licensing of products or services of the Company Group or other materials embodying Company Intellectual Property in the ordinary course of business; (2) the acquisition, lease or license of products or services by the Company Group in the ordinary course of business, (3) the acquisition, assignment or a wholly owned Subsidiary abandonment of immaterial Company Intellectual Property in connection with the exercise of the reasonable business judgment of the Company Group in the ordinary course of business; (4) the abandonment of trade secrets in the ordinary course of business and to a wholly owned Subsidiary the extent not economically desirable to maintain for the conduct of the business of the Company Group; and (5) any capital expenditures permitted by (or consented to by Parent under) Section 5.2(n);
(j) (A) enter into, adopt, amend (including accelerating the vesting, payment or funding), modify or terminate any bonus, profit sharing, compensation, severance, termination, option, appreciation right, performance unit, phantom equity, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, severance or other Employee Plan in any manner (other than at-will offer letters (or, for jurisdictions outside of the United States, employment agreements that provide for employment periods or rights no greater than required by applicable law) entered into with new hires of employees of the Company Group in the ordinary course of business and consistent with past practice and whose annual salary is less than $200,000); (B) increase or advances decrease the compensation of expenses any director, officer, employee, individual consultant, former employee, individual independent contractor, or other individual service provider of the Company Group, pay any special bonus or special remuneration to any director, officer, employee employee, individual consultant, former employee, individual independent contractor, or agent other individual service provider of the Company in connection with advancement obligations Group, or pay any benefit not required by (or accelerate the time of payment or vesting of any payment becoming due under) any Employee Plan as in effect on as of the date hereof, except in the case of this Agreementeach of (A) and (B), (1) as may be required by applicable law or the terms of the applicable Employee Plan in effect as of the date hereof; or (2) for increases in base salary for employees of the Company Group below the level of vice president and whose annual salary is less than $200,000 in the ordinary course of business and consistent with past practice (it being understood that these exceptions in the foregoing clauses (1) and (2) will not apply to any actions otherwise prohibited by Section 5.2(c) or the following sub-clause (C)); (C) enter into any change in control, severance or similar agreement or any retention or similar agreement with any officer, employee, director, individual independent contractor, individual consultant, or other individual service provider of the Company Group, or (D) hire, terminate (other than for “cause”), furlough or temporarily lay off any officer, employee, director, individual independent contractor, individual consultant, or other individual service provider of the Company Group with an annual base salary or wages (or, in the case of non-employee service providers, equivalent compensation) of $200,000 or more;
(k) xxxxxx, release, waive or compromise any pending or threatened material Legal Proceeding or other claim, except for the settlement of any Legal Proceedings or other claim that is (A) reflected or reserved against in the Audited Company Balance Sheet; (B) for solely monetary payments of, net of insurance recovery, no more than $200,000 individually and $500,000 in the aggregate; or (C) settled in compliance with Section 6.15;
(l) except as required by applicable law or GAAP, (A) revalue in any material respect any of its properties or assets, including writing-off notes or accounts receivable, other than in the ordinary course of business; or (B) make any change in any of its accounting principles or practices;
(m) except in the ordinary course of business, (A) make or change any material Tax election; (B) settle, consent to or compromise any material Tax claim or assessment or surrender a right to a material Tax refund; (C) consent to any extension or waiver of any limitation period with respect to any material Tax claim or assessment; (D) file an amended Tax Return that could materially increase the Taxes payable by the Company or its Subsidiaries; or (E) enter into a closing agreement with any Governmental Authority regarding any material Tax;
(n) incur or commit to incur any capital expenditure(s) other than consistent with the capital expenditure budget set forth in Section 5.2(n) of the Company Disclosure Letter;
(o) enter into, modify, amend or terminate any (i) Contracts (other than any Material Contract) that if so entered into, modified, amended or terminated would, individually or in the aggregate, have a Company Material Adverse Effect; or (ii) incur, assume Material Contract or modify any material indebtedness or (iii) assume, guarantee, endorse, xxxxx x xxxx (other than Contract that would have been a Permitted Lien) on any Material Contract if such Contract was in existence as of the Company’s assets date hereof, except in the ordinary course of business or as security permitted under Section 5.2(c) and Section 5.2(j);
(p) maintain insurance at less than current levels or otherwise become liable for indebtedness in a manner inconsistent with past practice;
(q) engage in any transaction with, or enter into any agreement, arrangement or understanding with, any Affiliate of another Person (excluding the Company or other Person covered by Item 404 of Regulation S-K promulgated by the SEC that would be required to be disclosed pursuant to Item 404;
(r) effectuate or announce any closing, employee layoff, furlough, reduction to terms and conditions of employment or other event affecting in whole or in part any site of employment, facility, operating unit or employee that would result in liability of the Company Group under WARN;
(s) grant any material refunds, credits, rebates or other allowances to any end user, customer, reseller or distributor, in each case other than in the ordinary course of business;
(t) acquire (by merger, consolidation or acquisition of stock or assets) any other Person or any material portion thereof or material equity interest therein or enter into any Contract that involves a joint venture entity, limited liability company or legal partnership (excluding, for avoidance of doubt, reseller agreements and other commercial agreements that do not involve the formation of an entity with any third Person);
(u) (A) enter into any Collective Bargaining Agreement or agreement or arrangement to form a works council or other Contract with any labor union or other labor organization or works council, except to the extent required by applicable law; provided that the Company or its Subsidiariesapplicable Subsidiaries must first, to the extent not prohibited by law, provide Parent and its counsel reasonable advance notice thereof and a reasonable opportunity to review and comment thereon, and the Company or such Subsidiaries will give due consideration to all reasonable additions, deletions, changes or other recommendations suggested thereto by Parent or its counsel; or (B) recognize or certify any labor union, works council or other labor organization, or group of employees, as the bargaining representative for any employees of the Company Group, except as required by applicable law;
(v) waive or release any noncompetition, nonsolicitation, nondisclosure, noninterference, nondisparagement, or other restrictive covenant obligation of any current or former employee or independent contractor;
(w) adopt or implement any stockholder rights plan or similar arrangement, in each case, applicable to the Merger or any other transaction consummated pursuant to Parent’s rights under Section 5.3(e)(i)(2) or Section 5.3(e)(ii)(2); or
(ix) agree, resolveenter into, authorize any of, or agree or commit to enter into a Contract to take any action of the actions prohibited by this Section 5.2.
Appears in 2 contracts
Samples: Merger Agreement (Vista Equity Partners Fund Viii, L.P.), Merger Agreement (Duck Creek Technologies, Inc.)
Forbearance Covenants. Except (a) as expressly contemplated by this Agreement, (bA) as set forth in Section 5.1 or the correspondingly numbered subsection of Section 5.2 of the Company Disclosure Letter, ; (c) as required by applicable Law, or (dB) as approved in advance in writing by the Purchaser Parent (which approval will not be unreasonably withheld, conditioned or delayed); (C) as required by applicable Law; or (D) as expressly contemplated by the terms of this Agreement, during the period from the execution and delivery of this Agreement until the earlier to occur of the termination of this Agreement pursuant to Article IX and the ClosingPre-Closing Period, the Company will not, and will not permit any of cause its Subsidiaries to, directly or indirectlyto not:
(a) take amend or otherwise change (i) the Charter, (ii) the Bylaws or (iii) any action set forth in Section 4.1 other organizational document of the Stockholders AgreementCompany or any of its Subsidiaries;
(b) acquire propose or agree to acquireadopt a plan of complete or partial liquidation, directly or indirectly, by purchasedissolution, merger, consolidation consolidation, restructuring, recapitalization or otherwiseother reorganization, equity or assets constituting all file a petition in bankruptcy under any provisions of applicable bankruptcy Law on its behalf, or substantially all consent to the filing of the business of (or any division of the business of) another Personbankruptcy petition against it under any similar applicable Law;
(c) issue, grant, sell, assign, transfer, license, sublicense, abandon, permit to lapse, grant a covenant not to xxx, or otherwise dispose of any material Intellectual Property (other than non-exclusive licenses or sublicenses granted in the ordinary course of business);
(d) (i) authorize for issuance, issue, deliver, sell or transfer or agree or commit to issue, delivergrant, sell or transfer deliver, any Company Securities (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), except for (i) the issuance, delivery or sale of Shares pursuant to Company Stock-Based Awards or Company Options outstanding as of the Capitalization Date, in accordance with their terms in effect on the date of this Agreement, or (ii) as described in Section 5.2(c) of the Company Disclosure Letter;
(d) directly or indirectly acquire, repurchase or redeem any securities, except (i) with respect to Company Securities pursuant to the terms and conditions of Company Stock-Based Awards or Company Options outstanding as of the Capitalization Date in accordance with their terms as in effect on the date of this Agreement in order to satisfy Tax obligations with respect to awards granted pursuant to Company Stock Plans or pay the exercise price of Company Options; or (ii) in connection with transactions between the Company and any of its direct or indirect Subsidiaries;
(e) (i) acquire (by merger, consolidation or acquisition of stock or assets) any other Person or business or any material equity interest therein or enter into any joint venture, partnership, limited liability corporation or similar arrangement with any third Person; or (ii) dispose of, sell, assign or abandon of (by merger, consolidation, disposition of assets, lease or otherwise), directly or indirectly, any material assets, properties, interests or businesses;
(f) (i) adjust, split, subdivide, combine or reclassify any shares of capital stock of stock, or other equity interest issue or convertible security in the Company authorize or any of its Subsidiaries or other rights of any kind to acquire, any shares of capital stock of or any other equity interest in the Company or any of its Subsidiaries, other than (x) propose the issuance of any other Company Securities in respect of, in lieu of or in substitution for, shares of its capital stock or other equity interests pursuant to any Employee Plan or (y) the issuance of capital stock or other equity interests from any wholly owned Subsidiary to the Company or any other wholly owned Subsidiary of the Company, voting interest; (ii) amend declare, set aside, establish a record date for, authorize or modify pay any term or provision of any of the Company’s outstanding equity securities or (iii) accelerate or waive any restrictions pertaining to the vesting of any Company equity-based awards or warrants dividend or other rights distribution (whether in cash, shares or property or any combination thereof) in respect of any kind to acquire any shares of capital stock or other equity interests or voting interest, or make any other actual, constructive or deemed distribution in the Company;
(e) propose or commit to reclassify, combine, split or subdivide any capital stock respect of the Company or issue or authorize the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of capital stock or other equity or voting interest, except for cash dividends made by any direct or indirect wholly owned Subsidiary of the Company to the Company or one of its other wholly owned Subsidiaries; (iii) pledge or encumber or otherwise suffer to exist any Lien on any shares of its capital stock or other equity or voting interest or any other Company Securities; or (iv) modify the terms of any shares of its Subsidiaries, except for, with respect to any Subsidiary of the Company, any intercompany restructuring, recapitalization capital stock or similar transaction that will not have a Company Material Adverse Effect;
(f) enter into, amend other equity or terminate any Contract with Starboard Value LP or any of its Affiliatesvoting interest;
(g) except as required under applicable Law or the terms of any Employee Plan existing as of the date of this Agreement, (i) increase the compensation incur or benefits payable to assume any current Indebtedness or former director issue any debt securities, except for (A) loans or executive officer advances between wholly owned Subsidiaries of the Company or any employee of between the Company whose annual base salary is at least $300,000 and its wholly owned Subsidiaries; (B) revolving Indebtedness or letters of credit (or similar contractual obligations) incurred pursuant to the Credit Agreement as in each case, other than annual merit increases effect on the date hereof in the ordinary course of business; (C) or trade payables incurred in the ordinary course of business; (D) immaterial obligations incurred pursuant to business credit cards in the ordinary course of business and (E) any other Indebtedness incurred in the ordinary course of business not to exceed $2,000,000 in the aggregate; (ii) enter into any new, make or amend any existing, employment, severance, change in control, retention, bonus guarantee, or collective bargaining agreement or similar agreement or arrangement;
(i) make forgive any loans, advances or capital contributions to, or investments in, any other Person, except for (A) extensions of credit to customers in the ordinary course of business; (B) advances to directors, officers and other employees for travel and other business-related expenses, in each case, in the ordinary course of business and in compliance in all material respects with the Company’s policies related thereto; and (C) loans or advances solely between wholly owned Subsidiaries of the Company or between the Company and its wholly owned Subsidiaries and capital contributions in wholly owned Subsidiaries of the Company; or (iii) mortgage, pledge or otherwise encumber any assets, tangible or intangible, or create or suffer to exist any Lien thereon (other than investments Permitted Liens);
(h) except (i) to the extent required to comply with applicable Law (including Section 21.459(c) of the TBOC), (ii) as required pursuant to the terms of any Company Benefit Plan in effect on the date of this Agreement made available to Parent and set forth on Section 3.18(a) of the Company Disclosure Letter, (iii) as expressly required by this Agreement or (iv) as set forth in Section 5.2(h) of the Company Disclosure Letter, (A) establish, adopt, enter into, terminate or amend, or take any action to accelerate the vesting, payment or funding of any compensation, or benefits under, any Company Benefit Plan, including with respect to any Company Stock-Based Award or Company Option, except as permitted by clauses (B) through (D) below; (B) grant to any Service Provider any increase in cash compensation, bonus, incentive or fringe or other benefits or pay any compensation or benefit not required by (or accelerate the timing of payment or vesting of any payment becoming due under) any existing Company Benefit Plan, except (1) increases in annual base cash compensation for individual Service Providers whose annual base cash compensation is less than or equal to $200,000 and who have received credible employment offers from a third party employer to the extent necessary to counter such third party offers, not to exceed $500,000 for all Service Providers in the aggregate, or (2) making Company Benefit Plans available to any new hires of employees of the Company in the ordinary course of business and consistent with past practice at the vice president level or below (provided, that this exception will not apply to any actions otherwise prohibited by Section 5.2(c) (including with respect to the grant or the issuance of Company Securities) or the following sub clause (D)); (C) grant to any Service Provider or, increase the amount of any change in control, retention, transaction bonus, severance, termination pay or similar payments; (D) enter into any employment, consulting, change in control, retention, transaction bonus, severance, termination or similar agreement with any Service Provider (other than offer letters or consulting agreements entered into with newly-hired non-officer employees or consultants in the ordinary course of business and consistent with past practice that do not include change in control, retention, transaction bonus, severance, notice or similar payments or obligations); (E) hire, engage or terminate the employment or engagement of any Service Provider, other than any non-officer or employee of the Company or any of its Subsidiaries with an annual base cash compensation of less than $200,000 in the ordinary course of business and other than terminations for cause; or (F) communicate with the employees of the Company or any of its Subsidiaries with respect to the compensation, benefits or other treatment they will receive following the Effective Time, unless such communication is approved by Parent in advance of such communication;
(i) negotiate, enter into, amend or extend any Contract with a Union;
(j) settle, release, waive or compromise any pending or threatened Legal Proceeding, except for the settlement of any Legal Proceedings that is (i) reflected or reserved against in the Audited Company Balance Sheet (provided that any obligations arising out of such settlement do not exceed the amount reflected or reserved against on the Audited Company Balance Sheet with respect to such Legal Proceeding); (ii) for solely monetary payments of no more than $600,000 in the aggregate or (iii) settled in compliance with Section 6.14; provided that in the case of the foregoing clauses (i) and (ii) any such settlement does not involve any injunctive or other non-monetary relief or impose restrictions on the business or operations of the Company or any of its Subsidiaries;
(k) (i) make (other than consistent with past practice), change or revoke any material Tax election; (ii) settle or compromise any material Tax dispute, audit, investigation, proceeding, claim or assessment; (iii) consent to any extension or waiver of any limitation period with respect to any material Tax claim or assessment; (iv) knowingly surrender any material Tax refund or right thereto; (v) elect (other than consistent with past practice) or change materially any method of accounting for Tax purposes or Tax accounting period; (vi) file any material amended Tax Return; or (vii) enter into a closing agreement with any Governmental Authority regarding any Tax;
(l) (i) incur, authorize or commit to incur any capital expenditures (excluding, for the avoidance of doubt, internal and external capitalized labor costs) in excess of $1,000,000 in the aggregate, other than consistent with the capital expenditure budget set forth in Section 5.2(l) of the Company Disclosure Letter; (ii) engage in any transaction with, or enter into any agreement, arrangement or understanding with, any Affiliate of the Company or other Person covered by Item 404 of Regulation S-K promulgated by the SEC that would be required to be disclosed pursuant to Item 404; or (iii) effectuate a “mass layoff” as defined in WARN or other employee layoff event affecting in whole or in part any site of employment, facility, operating unit or employee;
(m) adopt or implement any stockholder rights plan or similar arrangement, in each case, applicable to the Transactions or any other transaction to be consummated pursuant to Parent’s rights under Section 5.3(d)(i)(2) or Section 5.3(d)(ii)(3);
(n) create any Subsidiary;
(o) make or adopt any material change in its accounting methods, principles or practices, except as may be required by a change in GAAP or Law;
(p) enter into a new line of business or abandon or discontinue any line of business;
(q) (i) sell, transfer, license, encumber or otherwise dispose of any material Company Intellectual Property, other than non-exclusive licenses granted by the Company in the ordinary course of business to (A) end user customers solely for the purposes of using the products or services of the Company and its Subsidiaries or (B) service providers solely for the purposes of providing services to the Company and its Subsidiaries; (ii) cancel, compromise, waive, or release any material right or claim under Company Intellectual Property or take any action or fail to take any action that would reasonably be likely to result in the loss, lapse, abandonment, invalidity or unenforceability of any material Company Intellectual Property; or (iii) enter into any source code escrow agreement with respect to, or otherwise agree to, or do, disclose, deposit or provide to any third Person, including an escrow agent or similar Person, the source code of any Company Software;
(r) take any action or refrain from taking any action that would result in the Company or any of its Subsidiaries not being compliant, in all material respects, with all Privacy and Data Security Requirements;
(s) enter into, amend, grant a material waiver under or modify in any material respect, terminate or transfer to any Person other than a wholly owned Subsidiary of the Company to any Subject Contract or any contract that would constitute a wholly owned Subsidiary of the Company or the Company or advances of expenses to any director, officer, employee or agent of the Company in connection with advancement obligations Subject Contract if in effect on as of the date of this Agreement, (ii) incur, assume or modify any material indebtedness or (iii) assume, guarantee, endorse, xxxxx x xxxx (in each case other than a Permitted Lienin the ordinary course of business;
(t) on materially amend, modify, renew or terminate any Lease or enter into any new material lease, sublease, license or other agreement for the use or occupancy of the Company’s assets as security or otherwise become liable for indebtedness of another Person (excluding the Company or any of its Subsidiaries)real property; or
(iu) agree, resolveenter into, authorize any of, or agree or commit to enter into a Contract to take any action of the actions prohibited by this Section 5.2. Nothing contained in this Agreement shall give Parent or Merger Sub, directly or indirectly, the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective Time, without limiting or modifying the restrictions set forth in this Section 5.2, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its operations.
Appears in 2 contracts
Samples: Merger Agreement (True Wind Capital, L.P.), Merger Agreement (Open Text Corp)
Forbearance Covenants. Except (a) as expressly contemplated by this Agreement, (bi) as set forth in Section 5.1 or Section 5.2 6.02 of the Company Disclosure LetterSchedule, (c) as required by applicable Law, or (dii) as approved in advance in writing by the Purchaser Parent (which approval will not be unreasonably withheld, conditioned or delayed), (iii) as required by Applicable Law or (iv) as expressly contemplated by the terms of this Agreement, at all times during the period from commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant to Article IX 10 and the ClosingEffective Time, the Company will not, and will not permit any of its Subsidiaries Subsidiaries, to, directly or indirectly:
(a) take amend the certificate of incorporation, the bylaws or any action set forth in Section 4.1 of the Stockholders Agreementother similar organizational document;
(b) acquire propose or agree to acquireadopt a plan of complete or partial liquidation, directly or indirectly, by purchasedissolution, merger, consolidation consolidation, restructuring, recapitalization or otherwise, equity or assets constituting all or substantially all of the business of (or any division of the business of) another Personother reorganization;
(c) issue, sell, assign, transfer, license, sublicense, abandon, permit to lapse, grant a covenant not to xxx, or otherwise dispose of any material Intellectual Property (other than non-exclusive licenses or sublicenses granted in the ordinary course of business);
(d) (i) authorize for issuance, issue, deliver, sell or transfer deliver or agree or commit to issue, deliver, sell or transfer deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities, other than, as applicable, the issuance and sale of shares of capital stock Company Common Stock upon the exercise of Company Options or other equity interest the settlement of Company RSUs, in each case, outstanding on the date of this Agreement and in accordance with their terms in effect on the date of this Agreement;
(d) purchase, redeem or convertible security in the Company otherwise acquire or any of its Subsidiaries or other rights of any kind offer to acquire, redeem or otherwise reacquire any shares of capital stock of or any other equity interest in the Company or any of its SubsidiariesSecurities, other than (xA) the issuance acquisition by the Company of capital stock or other equity interests pursuant Shares in connection with the surrender of Shares by holders of Company Options in order to any Employee Plan or pay the exercise price of the Company Options, (yB) the issuance withholding of capital stock or other equity interests from any wholly owned Subsidiary Shares to satisfy Tax obligations with respect to awards granted pursuant to the Company or any other wholly owned Subsidiary Stock Plan, and (C) the acquisition by the Company of Shares in connection with the Company, (ii) amend or modify any term or provision forfeiture of any of the Company’s outstanding equity securities or (iii) accelerate or waive any restrictions pertaining awards granted pursuant to the vesting of any Company equity-based awards or warrants or other rights of any kind to acquire any shares of capital stock or other equity interests in the CompanyStock Plans;
(e) propose (A) adjust, split, combine or commit to reclassifyreclassify any Shares, combine, split or subdivide any capital stock of the Company or issue or authorize or propose the issuance of any other securities Company Securities in respect of, in lieu of, of or in substitution for, Shares or other equity or voting interest, (B) declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of capital stock any Shares or other equity or voting interest, or make any other actual, constructive or deemed distribution in respect of the Shares or other equity or voting interest, except for cash dividends made by any direct or indirect wholly owned Subsidiary of the Company to the Company or any one of its other wholly owned Subsidiaries, except for, with respect to (C) pledge or encumber any Subsidiary Shares or other equity or voting interest or (D) modify the terms of the Company, any intercompany restructuring, recapitalization shares of its capital stock or similar transaction that will not have a Company Material Adverse Effectother equity or voting interest;
(f) enter into(A) incur, amend assume or terminate suffer any Contract with Starboard Value LP indebtedness (including any long-term or short-term debt) or issue any of its Affiliates;
debt securities, except (g1) except as required under applicable Law or the terms of any Employee Plan existing as of the date of this Agreement, (i) increase the compensation or benefits payable to any current or former director or executive officer of the Company or any employee of the Company whose annual base salary is at least $300,000 (in each case, other than annual merit increases for trade payables incurred in the ordinary course of businessbusiness and (2) for loans or advances to direct or indirect wholly owned Subsidiaries of the Company, (iiB) enter into any newassume, or amend any existing, employment, severance, change in control, retention, bonus guarantee, endorse or collective bargaining agreement otherwise become liable or similar agreement responsible (whether directly, contingently or arrangement;
otherwise) for the obligations of any other Person, except with respect to obligations of direct or indirect wholly owned Subsidiaries of the Company, (iC) make any loans, advances or capital contributions to, or investments in, any other Person, except for advances to directors, officers and other employees for travel and other business-related expenses, in each case in the ordinary course of business and in compliance in all material respects with the Company’s policies related thereto or (D) acquire, lease, license, sell, abandon, transfer, assign, guarantee or exchange any material assets, tangible or intangible, or create or suffer to exist any Lien thereupon;
(g) (A) enter into any forward contracts, swaps or options, (B) sell any future receivables or grant to any Person a contingent right to payment, assets, benefits or services in exchange for an upfront cash payment from such Person, (C) require or request any advanced payments by customers outside of the ordinary course of business and consistent with past practice, (D) modify the Company’s or its Subsidiaries’ policies or practices with respect to deposits paid to the Company and its Subsidiaries in connection with property subleases or (E) defer payment on any Contract of the Company or its Subsidiaries outside of the ordinary course of business and consistent with past practice;
(h) settle, release, waive or compromise any pending or threatened material Legal Proceeding or other claim, except for the settlement of any Legal Proceedings or other claim that is reflected or reserved against in the Company Balance Sheet;
(i) except as required by Applicable Law or GAAP, (A) revalue in any material respect any of its properties or assets, including writing-off notes or accounts receivable, other than investments in the ordinary course of business or (B) make any change in any of its accounting principles or practices in any material respect;
(A) make or change any material Tax election, (B) settle, consent to or compromise any material Tax claim or assessment or surrender a right to a material Tax refund, (C) consent to any extension or waiver of any limitation period with respect to any material Tax claim or assessment, (D) file an amended Tax Return that could materially increase the Taxes payable by the Company or its Subsidiaries or (E) enter into a wholly owned Subsidiary closing agreement with any Governmental Authority regarding any material Tax;
(k) (A) incur or commit to incur any capital expenditures other than materially consistent with the capital expenditure budget set forth in Section 6.02(k) of the Company Disclosure Schedule, (B) enter into, modify, amend or terminate any (1) Contract (other than any Material Contract) that if so entered into, modified, amended or terminated would reasonably be expected to have a wholly owned Subsidiary Company Material Adverse Effect, or (2) Material Contract unless in the ordinary course of business and in a manner that would not adversely affect the Company and its Subsidiaries taken as a whole in any material respect, (C) maintain insurance at less than current levels or otherwise in a manner inconsistent with past practice, (D) engage in any transaction with, or enter into any agreement, arrangement or understanding with, any Affiliate of the Company or other Person covered by Item 404 of Regulation S-K promulgated by the Company SEC that would be required to be disclosed pursuant to Item 404, (E) effectuate a “plant closing,” “mass layoff” (each as defined in WARN) or advances other employee layoff event affecting in whole or in part any site of expenses employment, facility, operating unit or employee, (F) grant any material refunds, credits, rebates or other allowances to any directorend user, officercustomer, employee reseller or agent distributor, in each case other than in the ordinary course of business or (G) waive, release, grant or transfer any right of material value other than in the Company ordinary course of business;
(l) except (A) in connection order to comply with advancement obligations Applicable Law, (B) as required pursuant to the terms of any Employee Plan in effect on the date of this Agreement or (C) as expressly provided in this Agreement, (ii1) incurestablish, assume adopt, enter into, terminate or modify amend, or take any material indebtedness action to accelerate the vesting, payment or funding of any compensation, or benefits under, any collective bargaining agreement or Employee Plan (iiior any award thereunder), (2) assumegrant to any current or former employee, guarantee, endorse, xxxxx x xxxx (director or other than a Permitted Lien) on any service provider of the Company’s assets as security or otherwise become liable for indebtedness of another Person (excluding the Company or any of its SubsidiariesSubsidiaries whose annual compensation exceeds $125,000, any increase in compensation, bonus or fringe or other benefits (or, in the case of any such person whose annual compensation does not exceed $125,000, grant any such increase unless in the ordinary course of business and that is not material, individually or in the aggregate), (3) grant to any current or former employee, director or other service provider of the Company or any of its Subsidiaries any increase in change in control, retention, severance or termination pay, (4) enter into any employment, consulting, change in control, retention, severance or termination agreement with any current or former employee, director or other service provider of the Company or any of its Subsidiaries (other than offer letters entered into with newly-hired non-officer employees in the ordinary course of business and consistent with past practice (provided that no such offer letter shall provide for equity awards, compensation or benefits tied to completion of the Merger or any other transactions consummated pursuant to this Agreement)), (5) hire any employee with an expected annual compensation in excess of $125,000 or (6) terminate any employee with an annual compensation in excess of $125,000 other than terminations for cause (as determined by the Company in its reasonable discretion and in accordance with Applicable Law);
(A) accelerate the receipt of any collections or accounts receivable or cash contributions of any type (other than in the ordinary course of business consistent with past practice); (B) sell or ship products or deliver services ahead of normally maintained schedules or otherwise accelerate sales in any material respect (including by inducing customers (including advertisers, agencies or distributors) through special payment incentives, discounts, or otherwise to buy products or services in quantities in excess of their current needs) or sell products or services in quantities that are outside of the ordinary course of business relative to the prior year of sales of such products or services or engaged in any practice that could reasonably be considered “channel stuffing” or “trade loading”; or (C) delay or postpone any accounts payable or other payables or expenses (other than in the ordinary course of business consistent with past practice);
(n) acquire (by merger, consolidation or acquisition of stock or assets) any other Person or any material equity interest therein or enter into any joint venture, partnership, limited liability corporation or similar arrangement with any third Person;
(o) enter into any collective bargaining agreement or agreement to form a works council or other agreement with any labor organization or works council (except to the extent required by Applicable Law);
(p) adopt or implement any stockholder rights plan or similar arrangement, in each case, applicable to the Merger or any other transaction consummated pursuant to this Agreement; or
(iq) agree, resolveenter into, authorize any of, or agree or commit to enter into a Contract to take any action of the actions prohibited by this Section 5.26.02.
Appears in 2 contracts
Samples: Merger Agreement (Sizmek Inc.), Merger Agreement (Sizmek Inc.)
Forbearance Covenants. Except (ai) as expressly contemplated required by this Agreement, Agreement or required by applicable Law or Order; (bii) as expressly set forth in Section 5.1 or Section 5.2 of the Company Disclosure Letter, (c) as required by applicable Law, ; or (diii) as approved in advance by Parent in writing by the Purchaser (which approval will not be unreasonably withheld, conditioned or delayed), at all times during the period from the execution and delivery of this Agreement until the earlier to occur of the termination of this Agreement pursuant to Article IX and the ClosingPre-Closing Period, the Company will not, and will not permit any of cause its Subsidiaries not to, directly or indirectly:
(a) amend the Charter, the Bylaws, or any other similar organizational document or take any action set forth in Section 4.1 violation of the Stockholders AgreementCharter, the Bylaws, or any Investor Rights Agreements;
(b) acquire propose, adopt or agree to acquireimplement a plan of complete or partial liquidation, directly or indirectly, by purchasedissolution, merger, consolidation consolidation, restructuring, recapitalization or otherwise, equity or assets constituting all or substantially all of the business of (or any division of the business of) another Personother reorganization;
(c) sell, assign, transfer, license, sublicense, abandon, permit to lapse, grant a covenant not to xxx, merge or otherwise dispose consolidate the Company or any of its Subsidiaries with any material Intellectual Property (other than non-exclusive licenses or sublicenses granted in the ordinary course of business)Person;
(d) (i) authorize for issuance, issue, deliversell, sell or transfer deliver or agree or commit to issue, deliver, sell or transfer deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities (including, for the avoidance of doubt, any Company Equity Awards) or any equivalent instrument with respect to any Subsidiary other than to the Company or another Subsidiary, except for the issuance or sale of shares of Company Common Stock in connection with the exercise or settlement (as applicable) of the Company Equity Awards or Company Warrants outstanding as of the date hereof in accordance with their terms as in effect on the date hereof;
(e) directly or indirectly acquire, repurchase or redeem any securities or obligations convertible (whether currently convertible or convertible only after the passage of time or the occurrence of certain events) into or exchangeable for any securities, except for (A) repurchases, withholdings, or cancellations of Company Securities pursuant to the terms and conditions of the Company Equity Awards outstanding as of the date hereof in accordance with their terms as in effect on the date hereof; or (B) transactions between the Company and any of its wholly-owned Subsidiaries;
(f) (A) adjust, split, combine, recapitalize or reclassify any shares of capital stock of stock, or other equity interest issue or convertible security in the Company authorize or any of its Subsidiaries or other rights of any kind to acquire, any shares of capital stock of or any other equity interest in the Company or any of its Subsidiaries, other than (x) propose the issuance of any other Company Securities in respect of, in lieu of or in substitution for, shares of its capital stock or other equity interests pursuant to or voting interest; (B) make, declare, set aside or pay any Employee Plan or (y) the issuance of capital stock dividend or other equity interests from any wholly owned Subsidiary to the Company distribution (whether in cash, shares or property or any other wholly owned Subsidiary combination thereof) in respect of the Company, (ii) amend or modify any term or provision of any of the Company’s outstanding equity securities or (iii) accelerate or waive any restrictions pertaining to the vesting of any Company equity-based awards or warrants or other rights of any kind to acquire any shares of capital stock or other equity interests or voting interest, or make any other actual, constructive or deemed distribution in the Company;
(e) propose or commit to reclassify, combine, split or subdivide any capital stock respect of the Company or issue or authorize the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of capital stock or other equity or voting interest, except for cash dividends made by any direct or indirect wholly owned Subsidiary of the Company to the Company, or any of its Subsidiaries, except for, with respect to any Subsidiary one of the Company, ’s other wholly owned Subsidiaries; (C) pledge or encumber any intercompany restructuring, recapitalization or similar transaction that will not have a Company Material Adverse Effect;
(f) enter into, amend or terminate any Contract with Starboard Value LP or any shares of its Affiliatescapital stock or other equity or voting interest (except for Permitted Liens); or (D) modify the terms of any shares of its capital stock or other equity or voting interest;
(g) (A) incur or assume any Indebtedness (including any long-term or short-term debt) or issue any debt securities, except as required under applicable Law or the terms of any Employee Plan existing as of the date of this Agreement, (i1) increase the compensation or benefits payable to any current or former director or executive officer of the Company or any employee of the Company whose annual base salary is at least $300,000 (in each case, other than annual merit increases for trade payables incurred in the ordinary course of business; (2) Indebtedness under the revolving credit facility of the Company Credit Agreement as in effect as of the date hereof, provided that (x) the aggregate amount outstanding under such revolving credit facility at any time shall not exceed $110,000,000 without prior approval of the Company Board and (y) the aggregate amount outstanding under such revolving credit facility at any time shall not exceed $250,000,000; (3) the incurrence of (or establishment of commitments with respect to) Indebtedness in an aggregate amount not to exceed $1,000,000; and (4) intercompany loans or advances between or among the Company Group; (B) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except with respect to obligations of the Company Group or (iiC) enter into amend, modify or supplement the Company Credit Agreement or any newother Indebtedness in a manner that either (1) is materially adverse to Buyer Parties or (2) adds any prepayment or redemption penalty or premium or that materially increases the prepayment or redemption penalty or premium payable under such Indebtedness;
(h) mortgage or pledge any of its and its Subsidiaries’ assets, tangible or intangible, or amend create or incur any existing, employment, severance, change in control, retention, bonus guarantee, or collective bargaining agreement or similar agreement or arrangementLien thereupon (other than Permitted Liens);
(i) make any loans, advances or capital contributions to, or investments in, any other Person, except for (1) advances to directors, officers and other than employees for travel and other business-related expenses, in each case, in the ordinary course of business and in compliance in all material respects with the Company Group’s policies related thereto; and (2) loans, advances or other extensions of credit or capital contributions to, or investments by in, the Company or any direct or indirect wholly-owned Subsidiaries of the Company;
(j) (A) acquire, lease, license, sell, abandon, permit to lapse, transfer, assign, guarantee, or exchange any Company Intellectual Property other than (x) non-exclusive licenses of Company Intellectual Property granted in the ordinary course of business to customers or vendors or (y) non-exclusive licenses where the grant of rights to use any Company Intellectual Property are incidental, and not material to, any performance under the applicable agreement; or (B) disclose any trade secrets included in the Company Intellectual Property to any third Person, other than pursuant to a wholly owned Subsidiary commercially appropriate non-disclosure or confidentiality agreement or other contractual, fiduciary or legal obligations of confidentiality;
(k) lease, license, sell, abandon, transfer, assign, guarantee or exchange any of the Company to a wholly owned Subsidiary Group’s assets in excess of $500,000 other than the sale, acquisition, lease or non-exclusive licensing of Company Products in the ordinary course of business;
(l) (A) enter into, adopt, amend (including accelerating the vesting, payment or funding), modify or terminate any Employee Plan or other plan, program, agreement or arrangement that would constitute an Employee Plan if in effect on the date hereof; (B) increase the compensation of any director, officer, employee, individual consultant, former employee, individual independent contractor, or other individual service provider of the Company Group, pay or the Company commit to pay any special bonus or advances of expenses special remuneration to any director, officer, employee employee, individual consultant, former employee, individual independent contractor, or agent other individual service provider of the Company in connection with advancement obligations Group, or pay or provide any compensation or benefit (including any pension, retirement allowance or forgiveness of indebtedness) not required by (or accelerate the time of payment or vesting of any payment or benefit becoming due under) any Employee Plan as in effect on as of the date hereof, except in the case of this Agreementeach of clauses (A) and (B), (ii1) incuras may be required by applicable Law or the terms of the applicable Employee Plan in effect as of the date hereof or (2) annual merit increases in base salary or wages in the ordinary course of business made to non-executive employees or service providers whose annual salary (or, assume in the case of non-employee service providers, equivalent compensation) is less than $250,000; (C) grant any new equity-based or other long-term incentive awards, amend or modify the terms of any material indebtedness outstanding Company Equity Awards or other long-term incentive awards, or pay any incentive or performance-based compensation or benefits at a level greater than the level earned based on actual performance through the end of the applicable performance period in accordance with the applicable plan; (D) enter into any change in control, severance or similar agreement or any retention or similar agreement with any officer, employee, director, individual independent contractor, or other individual service provider of the Company Group, or (iiiE) assumehire, guaranteepromote, endorse, xxxxx x xxxx terminate (other than a Permitted Lien) on for “cause”), furlough or temporarily lay off any officer, employee, director, individual independent contractor, or other individual service provider of the Company’s assets as security Company Group with an annual base salary or otherwise become liable wages (or, in the case of non-employee service providers, equivalent compensation) of greater than $250,000;
(m) settle, release, waive or compromise any existing or pending or threatened Legal Proceeding or other claim, except for indebtedness the settlement of another Person any Legal Proceedings or other claim (excluding A) in which the Company is the plaintiff or complainant wherein it solely alleges that monetary consideration is owed to the Company and for which no member of the Company Group is subject to any counterclaims; (B) that is for solely monetary payments of, net of insurance recovery, no more than $250,000 individually and $1,000,000 in the aggregate, and that does not involve any admission of wrongdoing or liability, does not impose any restriction on the business of the Company or any of its Subsidiaries, does not relate to any litigation by the Company’s stockholders in connection with this Agreement, the Merger or the transactions contemplated thereby or (C) settled in compliance with Section 6.13;
(n) except as required by applicable Law or GAAP, (A) revalue in any material respect any of its properties or assets, including writing-off notes or accounts receivable, other than in the ordinary course of business; or (B) make any material change in any of its accounting principles or practices
(o) except as required by applicable Law or GAAP , (A) amend any material Tax Return, (B) change or revoke (or make other than in the ordinary course of business) any material Tax election, (C) change any material method of Tax accounting, (D) settle or compromise any material Tax liability, (E) surrender any claim for a refund of material Taxes, (F) agree to any extension or waiver of a statute of limitations applicable to any material Tax claim or assessment (other than pursuant to automatic extensions to file Tax Returns) or (G) make any material change in accounting methods, principles or practices;
(p) incur or commit to incur any capital expenditure(s) other than consistent with the capital expenditure budget set forth in Section 5.2(p) of the Company Disclosure Letter;
(q) enter into, modify or amend in a manner that is adverse in any respect to the Company Group or terminate (or accelerate, release, settle, compromise or waive any material right under) any Material Contract (or any Contract that would have been a Material Contract if such Contract was in existence as of the date hereof), except in the ordinary course of business; provided, however, that no Material Contract with any of the Specified Customers or Specified Material Contract (or any Contract that would have been a Material Contract with any of the Specified Material Customers or a Specified Material Contract if such Contract was in existence as of the date hereof) shall be (i) modified or amended in a manner that is adverse in any material respect to the Company Group, or (ii) terminated;
(r) maintain insurance at less than current levels or otherwise in a manner inconsistent with past practice;
(s) engage in any transaction with, or enter into or renew any agreement, arrangement or understanding with, any Affiliate of the Company or other Person covered by Item 404 of Regulation S-K promulgated by the SEC that would be required to be disclosed pursuant to Item 404;
(t) effectuate or announce any closing, employee layoff, furlough, reduction to terms and conditions of employment or other event affecting in whole or in part any site of employment, facility, operating unit or employee that would result in liability of the Company Group or notice obligations, in each case under WARN;
(u) grant any material refunds, credits, rebates or other allowances to any end user, customer, reseller or distributor, in each case other than in the ordinary course of business;
(v) acquire (by merger, consolidation or acquisition of stock or assets) any other Person or any material portion thereof or material equity interest therein or enter into any Contract that provides for the formation of a joint venture entity, limited liability company, legal partnership or similar entity with any third Person or make any investment in any Person, other than an investment in any wholly-owned Subsidiary of the Company;
(w) (A) enter into, negotiate, modify or terminate any Collective Bargaining Agreement or agreement or arrangement to form a Union or other Contract with any Union; or (B) recognize or certify any Union, or group of employees, as the bargaining representative for any employees of the Company Group;
(x) waive or release any noncompetition, nonsolicitation, nondisclosure, noninterference, nondisparagement, or other restrictive covenant obligation of any current or former employee or independent contractor;
(i) amend any Permits in any material respect (other than amendments in the ordinary course of business in a manner not adverse to the Company or its Subsidiaries), (ii) terminate, fail to diligently pursue any application for or allow to lapse, any material Permits, or (iii) take any action, or fail to take any action, that would reasonably be expected to result in the material loss, expiration, termination or surrender of, or would reasonably be expected to result in the loss of any material benefit under, or be reasonably expected to cause any Governmental Authority to institute proceedings for the suspension, revocation or limitation of, any material Permits;
(z) enter into, extend, amend or terminate any material interest rate, currency, equity, commodity or other swaps, xxxxxx, derivatives, forward sales contracts or other similar financial instruments;
(aa) enter into any new line of business or wind down any existing line of business; or
(ibb) agree, resolveenter into, authorize any of, adopt any resolutions in support of or agree or commit to enter into a Contract to take any action of the actions prohibited by this Section 5.2.
Appears in 2 contracts
Samples: Merger Agreement (R1 RCM Inc. /DE), Merger Agreement (R1 RCM Inc. /DE)
Forbearance Covenants. Except (a) as expressly contemplated by this Agreement, (bA) as set forth in Section 5.1 or Section 5.2 of the Company Disclosure Letter, (c) as required by applicable Law, ; or (dB) as approved in advance in writing by with the Purchaser prior written consent of Parent (which approval consent will not be unreasonably withheld, conditioned or delayed), at all times during the period from commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of the (1) termination of this Agreement pursuant to Article IX VIII and the Closing(2) Effective Time, the Company will not, and will not permit any of its Subsidiaries to, directly or indirectly:
(a) take declare, accrue, set aside or pay any action set forth dividend or make any other distribution (whether in Section 4.1 of the Stockholders Agreement;
(b) acquire or agree to acquirecash, directly or indirectly, by purchase, merger, consolidation stock or otherwise, equity or assets constituting all or substantially all of the business of (or any division of the business of) another Person;
(c) sell, assign, transfer, license, sublicense, abandon, permit to lapse, grant a covenant not to xxx, or otherwise dispose in respect of any material Intellectual Property shares of its capital stock (other than non-exclusive licenses consolidated cash management transfers among the Acquired Entities, the net effect of which does not change the consolidated cash balance of the Acquired Entities), or sublicenses granted in the ordinary course of business);
(d) (i) authorize for issuancerepurchase, issue, deliver, sell redeem or transfer or agree or commit to issue, deliver, sell or transfer any shares of capital stock of or other equity interest or convertible security in the Company or otherwise reacquire any of its Subsidiaries or other rights of any kind to acquire, any shares of capital stock of or any other equity interest in the Company or any of its Subsidiaries, other than (x) the issuance of capital stock or other equity interests pursuant to any Employee Plan or (y) the issuance of capital stock or other equity interests from any wholly owned Subsidiary to the Company or any other wholly owned Subsidiary of the Company, (ii) amend or modify any term or provision of any of the Company’s outstanding equity securities or (iii) accelerate or waive any restrictions pertaining to the vesting of any Company equity-based awards or warrants or other rights of any kind to acquire any shares of capital stock or other equity interests in securities or rights, warrants or options to acquire any such shares or securities of the Company, other than: (i) the acquisition by the Company of shares of Company Common Stock in connection with the surrender of shares of Company Common Stock by holders of Company Options in order to pay the exercise price of the Company Options; (ii) the withholding of shares of Company Common Stock to satisfy Tax obligations with respect to awards granted pursuant to the Company Equity Plans; and (iii) the acquisition by the Company of Company Options or Company Restricted Stock in accordance with their terms in effect as of the date of this Agreement in connection with the forfeiture of such awards;
(eb) propose sell, issue, grant, authorize the issuance or commit grant of, or amend the terms of any: (i) capital stock or other security; (ii) option, restricted stock unit, restricted stock award or other equity-based compensation award (whether payable in cash, stock or otherwise), call, warrant or right to reclassifyacquire any capital stock or other security; or (iii) instrument convertible into or exchangeable for any capital stock or other security, in each case whether issued pursuant to an Company Equity Plan or not (except that the Company may issue shares of Company Common Stock upon the valid exercise of Company Options outstanding as of the date of this Agreement);
(c) split, divide, subdivide, combine, split consolidate or subdivide reclassify any shares of its capital stock of the Company or other securities, or issue or authorize the issuance of any other securities in respect of, in lieu of, of or in substitution for, for shares of its capital stock of the Company or other securities;
(d) except as otherwise stated in Section 2.11, amend or waive any of its Subsidiariesrights under, except foror accelerate the vesting under, with respect to any Subsidiary provision of any of the Company’s stock option or equity compensation plans (including the Company Equity Plans), any intercompany restructuring, recapitalization provision of any agreement evidencing any outstanding Company Options or similar transaction that will not have a otherwise modify any of the terms of any outstanding equity-based compensation award or other security or any related Contract;
(e) commence any offering or otherwise issue or grant any awards under the Company Material Adverse EffectEquity plans;
(f) enter intoabandon, amend allow to lapse, sell, assign, transfer, grant any security interest in otherwise encumber or terminate dispose of any Contract Intellectual Property, or grant any right or license to any Intellectual Property other than in the ordinary course of business consistent with Starboard Value LP or any of its Affiliatespast practice;
(g) except adopt, approve or implement any stockholder rights plan (or similar plan commonly referred to as required under applicable Law a “poison pill”), tax benefits preservation plan (or similar plan), or related agreement;
(A) amend or permit the terms adoption of any Employee Plan existing amendment to its organizational documents, or acquire or enter into an agreement to acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof, (B) make any loans, advances, or capital contributions to or investments in any Person; (C) issue or sell any debt securities or calls, options, warrants or other rights to acquire any debt securities of or enter into any agreement having the economic effect of any of the foregoing, or (D) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person;
(i) acquire any material equity interest or other material interest in any other Entity;
(j) make any capital expenditure, except that the Acquired Entities may make capital expenditures that, when added to all other capital expenditures made on behalf of the Acquired Entities during the during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of the (1) termination of this Agreement pursuant to Article VIII and (2) Effective Time, do not exceed (x) $100,000 in the aggregate, or (y) $50,000 individually;
(k) other than in the ordinary course of business, enter into or amend or modify in any material respect, or consent to the termination of (other than at its stated expiry date), any Material Contract or any other Contract that, if in effect as of the date of this Agreement, would constitute a Material Contract;
(i) increase the compensation acquire, lease or benefits payable license any right or other asset from any other Person; (ii) sell or otherwise dispose of, or lease or license, any right or other asset to any current other Person; or former director (iii) waive or executive officer relinquish any right, except in each case for rights or other assets to be acquired, leased, licensed or disposed of in the ordinary course of business and consistent with past practice;
(m) enter into any Contract to purchase or sell any interest in real property, enter into any lease, sublease, license or other occupancy agreement with respect to any real property or alter, amend, modify, violate or terminate any of the terms of any Company Lease;
(n) (i) incur, assume, suffer or modify the terms of any employee Indebtedness or issue any debt securities, except (A) short-term debt incurred to fund operations of the Company whose annual base salary is at least $300,000 business in the ordinary course of business consistent with past practice; and (B) revolving Indebtedness incurred pursuant to the Credit Agreement to fund operations of the Business in each casethe ordinary course of business consistent with past practice; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person; or (iii) mortgage, pledge or otherwise encumber any assets, tangible or intangible, or create or suffer to exist any lien thereon (other than annual merit increases Permitted Liens);
(o) except as required by applicable Law or GAAP, and other than in the ordinary course of business) or (ii) enter into any new, write off as uncollectible, or amend establish any existingextraordinary reserve with respect to, employmentany material account receivable or other Indebtedness;
(p) make any pledge of any of its assets or otherwise permit any of its assets to become subject to any liens (other than Permitted Liens), severance, change except as such pledges and liens relate to immaterial assets made in control, retention, bonus guarantee, or collective bargaining agreement or similar agreement or arrangementthe ordinary course of business and consistent with past practices;
(i) adopt, establish or enter into any Company Benefit Plan; (ii) except as otherwise stated in Section 2.11 or as required by applicable Laws, cause or permit any Company Benefit Plan to be amended in any material respect or terminated, or waive any rights under, or permit the acceleration of vesting under any provision of any Company Benefit Plan; (iii) make any loans, advances or capital contributions to, or investments in, contribution to any other PersonCompany Benefit Plan, other than investments contributions required by applicable Laws, the terms of such Company or a wholly owned Subsidiary of the Company to a wholly owned Subsidiary of the Company or the Company or advances of expenses to any director, officer, employee or agent of the Company in connection with advancement obligations Benefit Plans as in effect on the date hereof, or that are made in the ordinary course of this Agreementbusiness consistent with past practices; or (iv) pay any bonus or make any profit-sharing or similar payment to, or materially increase the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, or grant any rights to receive severance, termination, retention or tax gross up compensation or benefits to, any of its current or former directors, officers, employees, or Contingent Workers except in an aggregate amount not to exceed $200,000;
(r) (i) hire any employee at the level of Vice President or above; (ii) incur, assume or modify hire any material indebtedness or employee with an annual base salary in excess of $125,000; (iii) assumepromote any employee to a level of Vice President or above; or (iv) terminate any employee at the level of Vice President or above (except for “cause”);
(s) change any of its pricing policies, guaranteeproduct return policies, endorseproduct maintenance policies, xxxxx x xxxx service policies, product modification or upgrade policies, personnel policies or other business policies in a manner that is material to the business of the Acquired Entities;
(t) change any of its methods of accounting or accounting practices or internal controls (including internal controls over financial reporting) in any material respect, in each case except for (A) any such change required by a change in GAAP or applicable Law;
(u) except as otherwise required by applicable Laws, (i) prepare or file any income or other material Tax Return or make any Tax election, in each case, that is inconsistent with past practices; (ii) settle or otherwise compromise any claim, notice, audit report or assessment relating to any material amount of Tax or assessment, enter into any closing agreement or similar agreement relating to any material amount of Tax or assessment, or otherwise settle any dispute relating to any material amount of Tax; (iii) request any ruling or similar guidance with respect to material Taxes; (iv) consent to an extension or waiver of the statutory limitation period applicable to a claim or assessment in respect of any material Tax; or (v) file an amended Tax Return that may materially increase the Taxes payable by the Acquired Entities;
(v) enter into any transaction with any of its Affiliates (other than a Permitted Lienthe Company and any Company Subsidiary), excluding any employment, compensation or similar arrangements otherwise permitted pursuant to this Agreement;
(w) on enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding, or similar Contract with respect to any joint venture, strategic partnership, or alliance;
(x) enter into any new line of business;
(y) enter into any pay or performance guarantees or agreements to indemnify any other Person other than in the ordinary course of business consistent with past practice or under which none of the Company’s assets as security Acquired Entities will have any obligations following the Effective Time;
(z) terminate or permit any Governmental Authorization to lapse, other than in accordance with the terms and regular expiration of any Governmental Authorization, or fail to apply on a timely basis for any renewal of any renewable Governmental Authorization, except to the extent such termination, lapse or failure to apply for renewal would otherwise become liable for indebtedness have been permitted to occur in the ordinary course of another business consistent with past practice;
(aa) except in connection with actions permitted by Section 5.3, take any action to exempt any Person (excluding from, or make any acquisition of securities of the Company by any Person not subject to, any state takeover statute or similar statute or regulation that applies to Company with respect to an Acquisition Proposal or otherwise, including the restrictions on “business combinations” set forth in Section 203 of the DGCL, except, in each case, for Parent, Merger Sub or any of its Subsidiaries)their respective Subsidiaries or Affiliates, or the Merger; or
(ibb) agree, resolve, authorize agree or commit to take any action prohibited by of the actions described in clauses (a) through (dd) of this Section 5.2.
Appears in 1 contract
Samples: Merger Agreement (Globalscape Inc)
Forbearance Covenants. Except During the Pre-Closing Period, the Company will not (aand has not), and will not permit (and has not permitted) any of its Subsidiaries to (in each case (x) subject to the Covenant Exceptions (other than clause (i) thereto), (y) as expressly contemplated by another provision of this Agreement, (b) as set forth in Section 5.1 or Section 5.2 of the Company Disclosure Letter, (c) as required by applicable Law, Agreement or (dz) except as approved in advance consented in writing by Parent under the Purchaser (which approval will not be unreasonably withheld, conditioned or delayed), during the period from the execution and delivery of this Agreement until the earlier to occur terms of the termination of this Agreement pursuant to Article IX and the Closing, the Company will not, and will not permit any of its Subsidiaries to, directly or indirectly:Original Agreement):
(a) take amend or otherwise change the Charter, the Bylaws or any action set forth in Section 4.1 of the Stockholders Agreementother similar organizational document;
(b) acquire propose or agree to acquireadopt a plan of complete or partial liquidation, directly or indirectly, by purchasedissolution, merger, consolidation consolidation, restructuring, recapitalization or otherwise, equity or assets constituting all or substantially all of the business of (or any division of the business of) another Personother reorganization;
(c) sell, assign, transfer, license, sublicense, abandon, permit to lapse, grant a covenant not to xxx, or otherwise dispose of any material Intellectual Property (other than non-exclusive licenses or sublicenses granted in the ordinary course of business);
(d) (i) authorize for issuance, issue, deliver, sell or transfer deliver, or agree or commit to issue, sell or deliver, any Company Securities (including any Company Equity-Based Awards) (whether through the issuance or granting of options, restricted stock units, warrants, commitments, subscriptions, rights to purchase or otherwise), except, in each case, (i) for the issuance, delivery or sale of (or agreement or commitment to issue, sell or transfer any deliver) shares of capital stock Company Common Stock pursuant to Company Equity-Based Awards outstanding as of February 4, 2024 or other equity interest pursuant to the ESPP, in each case, in accordance with their terms and the terms of this Agreement (including as limited by Section 2.8(f)); (ii) the issuance of Company Securities, cash or convertible security any combination of Company Securities and cash pursuant to the terms of the 2024 Convertible Notes Indenture or 2026 Convertible Notes Indenture as in effect on February 4, 2024; (iii) the issuance of Company Securities in transactions solely between the Company and any of its Subsidiaries; or (iv) in connection with agreements in effect on February 4, 2024 that are set forth on Section 5.2(c) of the Company Disclosure Letter;
(d) acquire, repurchase or redeem any of its equity securities, except, in each case, (i) pursuant to the terms and conditions of Company Equity-Based Awards outstanding as of February 4, 2024 in accordance with their terms as in effect as of February 4, 2024; or to otherwise satisfy Tax obligations with respect to awards granted pursuant to Company Equity Plans or to pay the exercise price of Company Options, in each case in accordance with the existing terms of the applicable Company Equity Plan as in effect on February 4, 2024; (ii) for transactions solely between the Company and any of its Subsidiaries or other rights of any kind to acquire, any shares of capital stock of or any other equity interest in the Company or any of its Subsidiaries, other than (x) the issuance of capital stock or other equity interests pursuant to any Employee Plan or (y) the issuance of capital stock or other equity interests from any wholly owned Subsidiary to the Company or any other wholly owned Subsidiary of the Company, (ii) amend or modify any term or provision of any of the Company’s outstanding equity securities or (iii) accelerate or waive any restrictions pertaining pursuant to the vesting terms of any Company equity-based awards the Capped Call Transactions as in effect on February 4, 2024;
(e) (i) adjust, split, subdivide, combine or warrants or other rights of any kind to acquire reclassify any shares of capital stock or other equity interests or voting interests; (ii) declare, set aside, establish a record date for, authorize or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any shares of its capital stock or other equity or voting interests, or make any other actual, constructive or deemed distribution in respect of its capital stock or other equity or voting interests, except for cash dividends made by any wholly-owned Subsidiary of the CompanyCompany to the Company or one of its other wholly-owned Subsidiaries; (iii) pledge or encumber any of its capital stock or other equity or voting interests; or (iv) modify the terms of any of its capital stock or other equity or voting interests;
(ef) propose acquire or commit agree to reclassifyacquire (by merger, combineconsolidation or acquisition of stock or assets) any third Person or any material equity interest in such Person, split or subdivide enter into any contractual joint venture or similar arrangement or partnership with any third Person;
(g) sell, lease, license, transfer, assign, exchange or swap, or subject to any lien (other than Permitted Liens), or otherwise dispose of, any portion of its material properties or assets, including the 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, shares of capital stock of the Company or any of its Subsidiaries, except for, with respect to any Subsidiary of the Company, any intercompany restructuring, recapitalization or similar transaction that will not have a Company Material Adverse Effect;
(f) enter into, amend or terminate any Contract with Starboard Value LP or any of its Affiliates;
(g) except as required under applicable Law or the terms of any Employee Plan existing as of the date of this Agreement, (i) increase the compensation or benefits payable to any current or former director or executive officer of the Company or any employee of the Company whose annual base salary is at least $300,000 (in each case, other than annual merit increases with a value of, or for consideration, in excess of $10,000,000 individually or $30,000,000 in the aggregate;
(h) acquire, or agree to acquire, fee ownership (or its jurisdictional equivalent) of any real property;
(i) (i) incur or assume any Indebtedness or issue any debt securities, except, in each case, (A) short-term debt incurred to fund operations of the business in the ordinary course of business; (B) for loans or advances solely between Subsidiaries of the Company or between the Company and its Subsidiaries; or (C) obligations incurred pursuant to business credit cards in the ordinary course of business; (ii) enter into any newassume, or amend any existing, employment, severance, change in control, retention, bonus guarantee, endorse or collective bargaining agreement otherwise become liable or similar agreement responsible (whether directly, contingently or arrangement;
otherwise) for the obligations of any third Person, except with respect to obligations of Subsidiaries of the Company; (iiii) make any loans, advances or capital contributions to, or investments in, any other third Person, except, in each case, for (A) extensions of credit to customers in the ordinary course of business; (B) advances of reimbursable expenses to directors, officers and other than investments by employees, in each case, in the Company ordinary course of business; and (C) for loans or a wholly advances between wholly-owned Subsidiary of the Company to a wholly owned Subsidiary Subsidiaries of the Company or between the Company and its wholly-owned Subsidiaries and capital contributions in or advances to Subsidiaries of expenses the Company; or (iv) mortgage, pledge or otherwise encumber any assets, tangible or intangible, or create any lien thereon (other than Permitted Liens);
(j) except (i) in order to comply with applicable Law, (ii) as required pursuant to the existing terms of any directorCompany Benefit Plan in effect on February 4, officer2024, employee or agent listed on Section 3.19(a) of the Company Disclosure Letter and made available to Parent, or (iii) as provided in connection with advancement obligations in effect on the date of this Agreement, (A) establish, adopt, enter into, terminate or amend any material Company Benefit Plan (or any plan, policy, agreement, Contract or arrangement that would be a Company Benefit Plan if in effect on February 4, 2024), or take any action to accelerate the vesting, payment or funding of any compensation or benefits under, any Company Benefit Plan (or any plan, policy, agreement, Contract or arrangement that would be a Company Benefit Plan if in effect on February 4, 2024); (B) grant to any Service Provider whose annual cash on target compensation exceeds $300,000 any increase or decrease in cash on target compensation, bonus, incentive or fringe or other benefits; (C) grant to any Service Provider any new or increased change in control, retention, transaction or stay bonus, tax gross-up, special remuneration, equity or equity-based award, bonus or incentive, deal or stay bonus severance or termination pay, or materially amend or modify any such arrangement; (D) enter into, terminate, amend or modify any employment agreement, offer letter, consulting agreement or arrangement, or change in control, retention, transaction or stay bonus, tax gross-up, special remuneration, severance or termination agreement or arrangement with any Service Provider (other than entering into at-will offer letters with newly-hired non-officer employees with total annual cash compensation equal to or less than $300,000 in the ordinary course of business consistent with past practice); or (E) terminate, engage or hire any employee or individual service provider of the Company or any of its Subsidiaries with total annual cash on target compensation in excess of $300,000, other than terminations for cause;
(k) xxxxxx, release, waive or compromise any pending or threatened material Legal Proceeding, except for the settlement of any Legal Proceedings (i) solely for monetary damages in an amount (A) not in excess of $5,000,000 or (B) that does not exceed the amount reflected or reserved against in the Unaudited Company Balance Sheet; or (ii) settled in compliance with Section 6.15;
(l) except as required by applicable Law or GAAP, (i) other than in the ordinary course of business, revalue in any material respect any of its properties or assets, including writing-off notes or accounts receivable; or (ii) make any change in any of its accounting principles or practices;
(m) (i) make or change any material Tax election; (ii) settle or compromise any material Tax claim or assessment; (iii) consent to any extension or waiver of any limitation period with respect to any material Tax claim or assessment (other than in connection with a customary extension of time automatically granted to file a Tax Return of no longer than seven (7) months); (iv) file an amended Tax Return that could materially increase the Taxes payable by Parent or its Affiliates (including, after the Closing, the Company and its Subsidiaries); (v) affirmatively surrender any right to claim a refund of material Taxes; (vi) fail to pay any material Tax that becomes due and payable except to the extent such Tax is contested in good faith; or (vii) enter into a closing agreement with any Governmental Authority regarding any material Tax.
(n) (i) incur, assume authorize or modify commit to incur any material indebtedness capital expenditures other than (A) consistent in all material respects with the capital expenditure budget set forth in Section 5.2(n) of the Company Disclosure Letter; (B) pursuant to obligations imposed by Material Contracts or Leases; or (C) pursuant to agreements in effect prior to February 4, 2024; (ii) except in the ordinary course of business (x) enter into any Contract which if entered into prior to February 4, 2024 would be a Material Contract or (y) modify or amend any material rights under any Material Contract in a manner that is adverse in any material respect to the Company and its Subsidiaries, taken as a whole, or terminate any Material Contract (other than any Material Contract that has expired in accordance with its terms); (iii) assumemaintain insurance at less than current levels or otherwise in a manner inconsistent with past practice; (iv) engage in any transaction with, guaranteeor enter into any agreement, endorsearrangement or understanding with, xxxxx x xxxx any Affiliate of the Company or other Person covered by Item 404 of Regulation S-K promulgated by the SEC that would be required to be disclosed pursuant to Item 404; (v) effectuate a “plant closing,” “mass layoff” (each as defined in the WARN Act) or other employee layoff event affecting in whole or in part any site of employment, facility, operating unit or employee (vi) grant any material refunds, credits, rebates or other allowances to any end user, customer, reseller or distributor, in each case other than in the ordinary course of business; or (vii) waive, release, grant, encumber or transfer any right of material value to the Company and its Subsidiaries, taken as a whole, other than in the ordinary course of business;
(o) negotiate, modify, extend, terminate or enter into any Labor Agreement, or recognize or certify any labor union, works council or other labor organization as the bargaining representative for any employees of the Company or its Subsidiaries;
(p) waive or release any noncompetition, nonsolicitation, nondisclosure, noninterference, nondisparagement, or other restrictive covenant obligation of any Service Provider;
(q) sell, assign, transfer, lease, license (other than a Permitted Lien), abandon, let lapse, cancel, dispose of, or otherwise subject to any lien or other encumbrance (in each case, other than Permitted Liens) on any material Company Intellectual Property, except for non-exclusive licenses of Intellectual Property entered in the ordinary course of business;
(r) disclose or abandon any material Trade Secrets, except in the ordinary course of business, and to the extent not economically desirable to maintain for the conduct of the Company’s assets as security business of the Company and its Subsidiaries, or otherwise become liable disclose, license, make available, or deliver any source code for indebtedness any Company Software to any Person except to a third-party service provider or other agent obligated in writing to (i) maintain the confidentiality of, and not disclose, such source code; and (ii) use such source code only in the provision of another Person (excluding services to the Company or any of its Subsidiaries;
(s) make any material change to the Company’s or any of its Subsidiaries’ policies or procedures with respect to their Processing of Personal Information, except to remediate any privacy or security issue that the Company or any of its Subsidiaries reasonably believes is material, to comply with applicable Privacy and Data Security Requirements (but with respect to Privacy and Data Security Requirements that consist of contractual obligations, solely those that are in effect during the Pre-Closing Period (provided that any such contractual obligations entered into after February 4, 2024 must be entered into in accordance with the terms of this Agreement and in the ordinary course of business)), or as otherwise directed or required by a Governmental Authority; or
(it) agreeenter into, resolve, authorize or agree or commit to enter into, a Contract to take any action of the actions prohibited by this Section 5.2.
Appears in 1 contract
Forbearance Covenants. Except (a) as expressly contemplated by this Agreement, (bA) as set forth in Section 5.1 or Section 5.2 of the Company Seller Disclosure Letter, ; (cB) as required by applicable Law, or ; (dC) as approved in advance in writing by the Purchaser (which approval will not be unreasonably withheld, conditioned or delayed); or (D) as required by the terms of this Agreement or the Transaction Documents, during the period from the execution and delivery of this Agreement until the earlier to occur of the termination of this Agreement pursuant to Article IX and the ClosingPre-Closing Period, neither Seller nor the Company will, nor will not, and will not they permit any of its Subsidiaries their respective Subsidiaries, as applicable, to, directly or indirectly:
(a) take amend or otherwise change the Charter, the Bylaws or any action set forth in Section 4.1 other similar organizational document of Seller or the Stockholders AgreementCompany;
(b) acquire propose or agree to acquireadopt a plan of complete or partial liquidation, directly or indirectly, by purchasedissolution, merger, consolidation consolidation, restructuring, recapitalization, conversion, division or otherwise, equity or assets constituting all or substantially all of the business of (or any division of the business of) another Personother reorganization;
(c) issue, sell, assign, transfer, license, sublicense, abandon, permit to lapse, grant a covenant not to xxx, or otherwise dispose of any material Intellectual Property (other than non-exclusive licenses or sublicenses granted in the ordinary course of business);
(d) (i) authorize for issuance, issue, deliver, sell or transfer or agree or commit to issue, sell or deliver, any Company Securities (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise);
(d) issue, sell, or deliver, or agree or commit to issue, sell or transfer any shares of capital stock of or other equity interest or convertible security in the Company or any of its Subsidiaries or other rights of any kind to acquiredeliver, any shares of capital stock of or any other equity interest in the Company or any of its Subsidiariesof, other than (x) the issuance of capital stock or other equity interests or voting interest in, Seller (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) to any Service Providers or Acquired Employees, except (i) for the issuance, delivery or sale of shares of Seller Common Stock pursuant to any Employee Plan Seller RSU Awards, Seller Options or (y) the issuance of capital stock or other equity interests from any wholly owned Subsidiary to the Company or any other wholly owned Subsidiary of the CompanySeller Warrants in accordance with their terms, (ii) amend or modify in connection with agreements in effect on the date of this Agreement (including any term or provision of any of the Company’s outstanding equity securities or (iii) accelerate or waive any restrictions pertaining to the vesting of any Company equity-based awards or warrants or other rights of any kind to acquire any shares of capital stock or other equity interests in the Company;
(e) propose or commit to reclassify, combine, split or subdivide 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, shares of capital stock of the Company or any of its Subsidiaries, except for, with respect to any Subsidiary of the Company, any intercompany restructuring, recapitalization offer letters or similar transaction that will not have a Company Material Adverse Effect;
(f) enter into, amend agreements entered into or terminate any Contract with Starboard Value LP or any of its Affiliates;
(g) except as required under applicable Law or the terms of any Employee Plan existing extended as of the date of this Agreement), or (iii) pursuant to the operation of the Seller ESPP;
(e) directly or indirectly acquire, repurchase or redeem any securities of the Company;
(f) with respect to the Company only, acquire (by merger, consolidation or acquisition of stock or assets) any other Person;
(g) with respect to the Company only, acquire, or agree to acquire, fee ownership (or its jurisdictional equivalent) of any real property;
(h) amend, terminate or otherwise modify or extend any Lease or enter into any new lease, sublease or occupancy agreement for the Leased Real Property or any other real property;
(i) adjust, split, subdivide, combine or reclassify any shares of Company Capital Stock; declare, set aside, establish a record date for, authorize or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any Company Capital Stock or other Company Securities, or make any other actual, constructive or deemed distribution in respect of any shares of the Company Capital Stock or any Company Securities; pledge or encumber any shares of Company Capital Stock or Company Securities; or modify the terms of any shares of Company Capital Stock or Company Securities;
(j) with respect to the Company only, (i) increase the compensation incur or benefits payable assume any Indebtedness or issue any debt securities, except for (A) short-term debt incurred to any current or former director or executive officer fund operations of the Company or any employee of the Company whose annual base salary is at least $300,000 (in each case, other than annual merit increases business in the ordinary course of businessbusiness or (B) or obligations incurred pursuant to business credit cards in the ordinary course of business (the foregoing clauses (A) and (B), collectively, “Permitted Indebtedness”); (ii) enter into any newassume, or amend any existing, employment, severance, change in control, retention, bonus guarantee, endorse or collective bargaining agreement otherwise become liable or similar agreement responsible (whether directly, contingently or arrangement;
otherwise) for the obligations of any other Person, except with respect to Permitted Indebtedness; (iiii) make any loans, advances or capital contributions to, or investments in, any other Person, except for (A) extensions of credit to customers and (B) advances to directors, officers and other employees, in each case in the ordinary course of business; or (iv) mortgage, pledge or otherwise encumber any assets, tangible or intangible of the Company, or create any Lien thereon (other than investments by Permitted Liens);
(k) except (i) as required pursuant to the terms (as in effect on the date hereof) of any Company Benefit Plan or a wholly owned Subsidiary of the Company to a wholly owned Subsidiary of the Company or the Company or advances of expenses to any director, officer, employee or agent of the Company in connection with advancement obligations Seller Benefit Plan in effect on the date of this Agreement and set forth on Section 3.21(a) of the Seller Disclosure Letter or (ii) as explicitly provided for in this Agreement, (iiA) incurestablish, assume adopt, enter into, terminate or modify amend, or take any material indebtedness action to accelerate the vesting, funding or payment of any compensation or benefits under, any Company Benefit Plan or, with respect to any Acquired Employee, any Seller Benefit Plan (iiior any plan, program, policy, agreement or arrangement that would be a Company Benefit Plan or Seller Benefit Plan if in effect on the date hereof); (B) assumegrant to any Acquired Employee any increase in compensation, guarantee, endorse, xxxxx x xxxx bonus or fringe or other benefits (other than a Permitted Lienany salary increases and annual bonuses provided to employees in the ordinary course of business consistent with past practice); (C) on grant to any of Acquired Employee any new, or any increase in, change in control, retention, severance or termination pay; (D) terminate any Acquired Employee other than terminations for cause (determined consistent with past practice), or hire any individual who would be an Acquired Employee; (E) hire any employee or engage any independent contractor or consultant to work for or provide services to the Company’s assets as security ; or otherwise become liable for indebtedness (F) make or forgive any loan to any Acquired Employee (other than advancement of another Person expenses in the ordinary course of business);
(excluding l) settle, release, waive or compromise any pending or threatened material Legal Proceeding involving the Company or the transactions contemplated by this Agreement, except for the settlement of any of its Subsidiaries); or
Legal Proceedings (i) agree, resolve, authorize solely for monetary damages in an amount (1) that do not exceed $150,000 individually or commit to take any action prohibited by this Section 5.2.$500,000 in the aggregate or (2) that does not exceed the amount reflected or reserved against in the Audited Seller Balance Sheet; or
Appears in 1 contract
Forbearance Covenants. Except (ax) as expressly contemplated or permitted by this Agreement, (by) as set forth in Section 5.1 or Section 5.2 of the Company Disclosure Letter, (c) as required by applicable Law, or (dz) as approved in advance in writing by the Purchaser Newco (which approval will not be unreasonably withheld, conditioned delayed or delayedconditioned), at all times during the period from commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant to Article IX VIII and the ClosingEffective Time, the Company will not, shall not do any of the following and will shall not permit any of its Subsidiaries toto do any of the following (it being understood and hereby agreed that if any action is expressly permitted by any of the following subsections, directly or indirectly:such action shall be expressly permitted under Section 5.1 also):
(a) take any action set forth in Section 4.1 of the Stockholders Agreementamend its Charter or bylaws or comparable organizational documents;
(b) acquire propose or agree to acquireadopt a plan of complete or partial liquidation, directly or indirectly, by purchasedissolution, merger, consolidation or otherwiseconsolidation, equity or assets constituting all or substantially all of the business of (or any division of the business of) another Person;
(c) sellrestructuring, assign, transfer, license, sublicense, abandon, permit to lapse, grant a covenant not to xxx, or otherwise dispose of any material Intellectual Property (other than non-exclusive licenses or sublicenses granted in the ordinary course of business);
(d) (i) authorize for issuance, issue, deliver, sell or transfer or agree or commit to issue, deliver, sell or transfer any shares of capital stock of recapitalization or other equity interest or convertible security in the Company or any reorganization of its Subsidiaries or other rights of any kind to acquire, any shares of capital stock of or any other equity interest in the Company or any of its Subsidiaries;
(c) issue, sell, deliver or agree or authorize, propose or commit to issue, sell or deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities or any Subsidiary Securities, except for the issuance and sale of shares of Company Common Stock pursuant to the exercise of Company Options outstanding prior to the date hereof;
(d) directly or indirectly acquire, repurchase or redeem any Company Securities or Subsidiary Securities (other than (x) the issuance repurchases of capital stock or other equity interests Company Securities pursuant to any Employee Plan or (y) the issuance terms and conditions of capital stock or other equity interests from any wholly owned Subsidiary to the Company or any other wholly owned Subsidiary Stock-Based Awards outstanding as of the Company, (ii) amend or modify any term or provision date of any of the Company’s outstanding equity securities or (iii) accelerate or waive any restrictions pertaining to the vesting of any Company equity-based awards or warrants or other rights of any kind to acquire any shares of capital stock or other equity interests in the Companythis Agreement);
(e) propose (i) adjust, split, combine or commit to reclassifyreclassify any shares of capital stock, combine, split or subdivide any capital stock of the Company or issue or authorize or propose the issuance of any other securities in respect of, in lieu of, of or in substitution for, shares of its capital stock, (ii) declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any shares of capital stock, or make any other actual, constructive or deemed distribution in respect of the shares of capital stock, except for cash dividends made by any direct or indirect wholly-owned Subsidiary of the Company to the Company or one of its Subsidiaries, (iii) pledge or encumber any shares of its capital stock or any of its other securities, or (iv) modify the terms of any shares of its capital stock or any of its other securities;
(f) (i) incur, create, assume or otherwise become liable for any long-term or short-term debt or issue any debt securities, except for (A) trade payables incurred in the ordinary course of business, (B) short-term debt incurred to fund operations of the business in the ordinary course of business, (C) debt incurred in the ordinary course of business under lines of credit or other credit facilities in effect on the date hereof, and (D) loans or advances to direct or indirect wholly-owned Subsidiaries, (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except with respect to obligations of direct or indirect wholly owned Subsidiaries of the Company, (iii) make any loans, advances or capital contributions to or investments in any other Person, except for travel advances in the ordinary course of business consistent with past practice to employees of the Company or any of its Subsidiaries, except foror (iv) sell, with respect to any Subsidiary of the Companylicense, any intercompany restructuringmortgage, recapitalization lease, transfer, encumber or similar transaction that will not have a Company Material Adverse Effect;
(f) enter into, amend or terminate any Contract with Starboard Value LP or pledge any of its Affiliatesor its Subsidiaries’ assets, tangible or intangible, or create or suffer to exist any lien thereupon (other than Permitted Liens);
(g) (i) enter into, adopt, create, amend (including acceleration of vesting), modify or terminate any bonus, profit sharing, compensation, severance, termination, option, appreciation right, performance unit, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, severance or other employee benefit agreement, trust, plan, fund or other arrangement for the compensation, benefit or welfare of any director, officer or employee in any manner, except in any such case (A) as may be required under by applicable Law law, (B) in the ordinary course of business and consistent with past practice, or (C) in connection with any new non-officer employee hires or the terms promotion of any Employee Plan existing non-officer employees, (ii) increase the compensation of any director, officer or employee, pay any special bonus or special remuneration to any director, officer or employee, or pay any benefit not required by any plan or arrangement as in effect as of the date hereof, except in any such case (A) as may be required by applicable law, (B) in the ordinary course of this Agreementbusiness and consistent with past practice, or (C) in connection with any new non-officer employee hires or the promotion of any non-officers employees, (iii) hire any new employees other than non-officer employees in the ordinary course of business consistent with past practice, or (iv) terminate any officer or key employee other than for good reason or for reasonable cause;
(h) (i) increase the compensation incur or benefits payable commit to incur any current or former director or executive officer of the Company capital expenditures, or any employee obligations or liabilities in connection therewith that individually or in the aggregate, are in excess of $500,000, except in the Company whose annual base salary is at least $300,000 ordinary course of business consistent with past practices, (in each caseii) pay, discharge, settle or satisfy any liabilities, other than annual merit increases the payment, discharge or satisfaction of liabilities in the ordinary course of business) , consistent with past practice, as required by any applicable law, as accrued for in the Audited Company Balance Sheet or (ii) enter into any new, or amend any existing, employment, severance, change in control, retention, bonus guarantee, or collective bargaining agreement or similar agreement or arrangement;
(i) make any loans, advances or capital contributions to, or investments in, any other Person, other than investments as required by the Company or a wholly owned Subsidiary terms of the Company to a wholly owned Subsidiary any Contract of the Company or the Company or advances of expenses to any directorits Subsidiaries, officer, employee or agent of the Company in connection with advancement obligations as in effect on the date of this Agreement, (iiiii) incurwaive, assume release, grant or modify transfer any right of material value, other than in the ordinary course of business, consistent with past practice, or waive any material indebtedness benefits of, or agree to modify in any material adverse respect, or, subject to the terms hereof, fail to enforce, or consent to any material matter with respect to which its consent is required under, any material confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is a party, (iv) enter into, modify, amend or terminate (A) any Contract which if so entered into, modified, amended or terminated could be reasonably likely to have a Company Material Adverse Effect or (iiiB) assumeexcept in the ordinary course of business, guaranteeany Material Contract, endorse(v) maintain insurance at less than current levels or otherwise in a manner inconsistent with past practice, xxxxx x xxxx (other than a Permitted Lienvi) on engage in any transaction with, or enter into any agreement, arrangement or understanding with any Affiliate of the Company’s assets Company or other Person covered by Item 404 of Regulation S-K promulgated under the Exchange Act that would be required to be disclosed under such Item 404, (vii) effectuate a “plant closing” or “mass layoff,” as security those terms are defined in WARN, affecting in whole or otherwise become liable for indebtedness in part any site of another Person (excluding employment, facility, operating unit or employee of the Company or any of its Subsidiaries), (viii) grant any material refunds, credits, rebates or other allowances by the Company or its Subsidiaries to any end user, customer, reseller or distributor, in each case, other than in the ordinary course of business, or (ix) abandon or allow to lapse or expire any registration or application for material Company Intellectual Property;
(i) settle any pending or threatened material Legal Proceeding having a value or in an amount in excess of $250,000;
(j) except as required by applicable law or GAAP, revalue any of its material properties or assets, including writing-off notes or accounts receivable;
(k) except as may be required as a result of a change in applicable law or in GAAP, make any change in any of the accounting methods, principles or practices used by it;
(i) change its material Tax accounting methods, principles or practices, except as required by GAAP or applicable law (other than a change of certain customers from the sell-in method of accounting to the sell-through method of accounting) (ii) make or change any material Tax election, (iii) settle or compromise any material U.S. federal, state, local or non-U.S. income Tax liability, (iv) fail to file any material Tax Return when due or fail to cause such Tax Returns when filed to be complete and accurate in all material respects, (v) enter into any “listed transaction” as defined in Section 6011 of the Code and the regulations thereunder or (vi) consent to any extension or waiver of any limitation period with respect to any claim or assessment for material Taxes;
(m) acquire (by merger, consolidation or acquisition of stock or assets) any other Person or any material equity interest therein; or
(in) agree, resolve, authorize or commit agree to take any action prohibited by of the actions described in this Section 5.2. The parties hereto acknowledge and hereby agree that the restrictions set forth in this Section 5.2 are not intended to give Newco or Merger Sub, directly or indirectly, the right to control or direct the business or operations of the Company or its Subsidiaries at any time prior to the Effective Time. Prior to the Effective Time, the Company and its Subsidiaries shall exercise (consistent with and subject to the terms, conditions and restrictions of this Agreement) control and supervision over their own business and operations.
Appears in 1 contract
Samples: Merger Agreement (Entrust Inc)
Forbearance Covenants. Except (a) as expressly contemplated by this Agreement, (bi) as set forth in Section 5.1 or Section 5.2 of the Company Disclosure Letter, ; (c) as required by applicable Law, or (dii) as approved in writing in advance in writing by the Purchaser Parent (which approval will not be unreasonably withheld, conditioned or delayed); (iii) to the extent necessary to comply with the express obligations set forth in any Material Contract in effect on December 4, 2019, provided that this clause (iii) shall not circumvent or supersede the express restrictions set forth in clauses (a) through (w) below; (iv) as required by applicable law; or (v) as expressly contemplated by the terms of this Agreement, at all times during the period from the execution and delivery of this Agreement until the earlier to occur of the termination of this Agreement pursuant to Article IX and the ClosingInterim Period, the Company will not, and will not permit any of its Subsidiaries to, directly or indirectly, including through any Subsidiary:
(a) take amend the Charter, the Bylaws or any action set forth in Section 4.1 other similar organizational document of the Stockholders Agreementany Company Group Member;
(b) acquire propose or agree to acquireadopt a plan of complete or partial liquidation, directly or indirectly, by purchasedissolution, merger, consolidation consolidation, restructuring, recapitalization or otherwise, equity or assets constituting all or substantially all of the business of (or any division of the business of) another Personother reorganization;
(c) issue, sell, assign, transfer, license, sublicense, abandon, permit to lapse, grant a covenant not to xxx, or otherwise dispose of any material Intellectual Property (other than non-exclusive licenses or sublicenses granted in the ordinary course of business);
(d) (i) authorize for issuance, issue, deliver, sell or transfer deliver or agree or commit to issue, deliver, sell or transfer deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities, except (i) for the issuance pursuant to Company Equity Awards outstanding as of the Capitalization Date and reflected in the numbers and totals set forth in Section 3.7, (ii) pursuant to the ESPP in accordance with its terms (as modified by Section 2.11(e)), including with respect to the satisfaction of Tax withholding and, with respect to the Company Options, the payment of the exercise price, or (iii) as described in Section 5.2(c) of the Company Disclosure Letter;
(d) directly or indirectly acquire, repurchase or redeem any securities, except (A) for repurchases, withholdings, or cancellations of Company Securities pursuant to the terms and conditions of Company Equity Awards outstanding as of December 4, 2019 in accordance with their terms as of December 4, 2019 or (B) transactions between the Company and any of its direct or indirect Subsidiaries;
(e) (A) adjust, split, combine or reclassify any shares of capital stock of stock, or other equity interest issue or convertible security in the Company authorize or any of its Subsidiaries or other rights of any kind to acquire, any shares of capital stock of or any other equity interest in the Company or any of its Subsidiaries, other than (x) propose the issuance of any other Company Securities in respect of, in lieu of or in substitution for, shares of its capital stock or other equity interests pursuant to or voting interest; (B) declare, set aside or pay any Employee Plan or (y) the issuance of capital stock dividend or other equity interests from any wholly owned Subsidiary to the Company distribution (whether in cash, shares or property or any other wholly owned Subsidiary combination thereof) in respect of the Company, (ii) amend or modify any term or provision of any of the Company’s outstanding equity securities or (iii) accelerate or waive any restrictions pertaining to the vesting of any Company equity-based awards or warrants or other rights of any kind to acquire any shares of capital stock or other equity interests or voting interest, or make any other actual, constructive or deemed distribution in the Company;
(e) propose or commit to reclassify, combine, split or subdivide any capital stock respect of the Company or issue or authorize the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of capital stock or other equity or voting interest, except for cash dividends made by any direct or indirect wholly owned Subsidiary of the Company to the Company or any one of its other wholly owned Subsidiaries, except for, with respect to ; (C) pledge or encumber any Subsidiary shares of its capital stock or other equity or voting interest; or (D) modify the Company, terms of any intercompany restructuring, recapitalization shares of its capital stock or similar transaction that will not have a Company Material Adverse Effectother equity or voting interest;
(f) enter into(A) incur, amend assume or terminate suffer any Contract with Starboard Value LP Indebtedness (including any long-term or short-term debt) or issue any of its Affiliates;
debt securities, except (g1) except as required under applicable Law or the terms of any Employee Plan existing as of the date of this Agreement, (i) increase the compensation or benefits payable to any current or former director or executive officer of the Company or any employee of the Company whose annual base salary is at least $300,000 (in each case, other than annual merit increases for trade payables incurred in the ordinary course of business; (2) immaterial obligations incurred pursuant to business credit cards in the ordinary course of business and (3) intercompany loans or advances between or among the Company and/or its direct or indirect wholly-owned Subsidiaries; or (iiB) enter into any newassume, or amend any existing, employment, severance, change in control, retention, bonus guarantee, endorse or collective bargaining agreement otherwise become liable or similar agreement responsible (whether directly, contingently or arrangementotherwise) for the obligations of any other Person, except in any such case, Indebtedness which may be borrowed, incurred or arise, in each case in the ordinary course of business, under the Credit Facility in accordance with its terms as of December 4, 2019;
(ig) mortgage or pledge any of its assets, tangible or intangible, or create or suffer to exist any Lien thereupon (other than Permitted Liens), other than in connection with financing transactions permitted by Section 5.2(f);
(h) make any loans, advances or capital contributions to, or investments in, any other Person, except for (1) extensions of credit to customers in the ordinary course of business; (2) advances to directors, officers and other employees for travel and other business-related expenses, in each case in the ordinary course of business and in compliance in all material respects with the Company’s policies related thereto; and (3) loans, advances or capital contributions to, or investments in, direct or indirect wholly-owned Subsidiaries of the Company;
(i) acquire, lease, license, sell, abandon, transfer, assign, guarantee, or exchange any assets, tangible or intangible (including any Company Intellectual Property), in each case in excess of $2,000,000 individually or $5,000,000 in the aggregate, other than investments by (1) the Company sale, lease or a wholly owned Subsidiary licensing of products or services of the Company to a wholly owned Subsidiary Group or other materials embodying Company Intellectual Property in the ordinary course of business; (2) the acquisition, assignment or abandonment of immaterial Company Intellectual Property in connection with the exercise of the reasonable business judgment of the Company in the ordinary course of business; (3) the abandonment of trade secrets and Company Intellectual Property in the ordinary course of business and to the extent not economically desirable to maintain for the conduct of the business of the Company; (4) acquisitions of inventory, raw materials and other property or services in the ordinary course of business; and (5) any capital expenditures permitted by (or consented to by Parent) under Section 5.2(n);
(j) (A) enter into, adopt, amend (including accelerating the vesting, payment or funding), modify or terminate any bonus, profit sharing, compensation, severance, termination, option, restricted stock unit, appreciation right, performance unit, phantom equity, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, severance, change in control or other Employee Plan or employee benefit agreement, trust, plan, fund or other arrangement for the compensation, benefit or welfare of any director, officer, individual consultant or employee of the Company Group in any manner, except to the extent authorized on Section 5.2(j) of the Company Disclosure Letter; (B) increase the compensation or advances benefits payable to any (i) director, officer, employee, individual consultant, (ii) former employee, individual consultant, or other individual service provider of expenses the Company Group, pay any bonus or remuneration to any director, officer, employee employee, individual independent contractor, former employee, individual independent contractor, or agent (iii) other individual service provider of the Company Group, or pay any compensation or benefit not required by (or accelerate the time of payment or vesting of any payment becoming due under) any existing Employee Plan as in effect as of December 4, 2019, except in the case of each of (A) and (B), (1) as may be required by applicable Law or the terms of the applicable Employee Plan or any change in control, severance or similar agreement or any retention or similar agreement with any officer, employee, director, individual independent contractor, individual consultant, or other individual service provider of the Company Group, in each such case, which is set forth on Section 3.18(a) of the Company Disclosure Letter and in effect as of December 4, 2019; or (2) making Employee Plans available to any new hires of employees of the Company in connection the ordinary course of business and consistent with advancement obligations past practice at the vice president level or below; or (3) for increases in effect on compensation for employees of the date Company at the vice president level or below in the ordinary course of this Agreementbusiness and consistent with past practice; provided, that these exceptions in the foregoing clauses (1), (ii2) incurand (3) will not apply to any actions otherwise prohibited by Section 5.2(c) (including with respect to the grant or the issuance of Company Securities) or the following sub-clause (C); or (C) enter into any change in control, assume severance or modify similar agreement or any retention, transaction or similar agreement with any officer, employee, director, individual independent contractor, individual consultant, or other individual service provider of the Company Group; provided that, in each case of (A) through (C), the Company Group (x) may change the title of its employees, provided such changes in title do not involve increases in the applicable employee’s compensation or benefits, acceleration of vesting or acceleration of payment of the applicable employee’s benefits or compensation, and (y) may make annual or quarterly bonus or commission payments in the ordinary course of business as required by the terms of any Employee Plans set forth on Section 3.18(a) of the Company Disclosure Letter and made available to Parent as of December 4, 2019 and payments of continued base salary or wages to employees, and set targets and metrics therefor in the ordinary course of business or in accordance with any Employee Plan;
(k) settle, release, waive or compromise any pending or threatened Legal Proceeding or other claim, except for the settlement of any Legal Proceedings or other claim that is (A) reflected or reserved against in the Audited Company Balance Sheet; (B) for solely monetary payments of no more than $1,000,000 individually and $2,000,000 in the aggregate; or (C) settled in compliance with Section 6.14;
(l) except as required by applicable Law or GAAP, (A) revalue in any material indebtedness respect any of its properties or assets, including writing-off notes or accounts receivable, other than in the ordinary course of business; or (iiiB) assume, guarantee, endorse, xxxxx x xxxx make any change in any of its accounting principles or practices;
(A) make or change any material Tax election; (B) settle or compromise any Tax claim or assessment in respect of material Taxes; (C) request or consent to any extension or waiver of any limitation period with respect to any Tax claim or assessment in respect of material Taxes (other than a Permitted Lien) on any pursuant to customary extensions of the Company’s assets due date to file a Tax Return obtained in the ordinary course of business); (D) file an amended Tax Return that could materially increase the Taxes payable by Parent or the Company Group; (E) surrender any right to claim a material refund of Taxes; (F) fail to pay any income or material Tax that becomes due and payable subject to good faith disputes over Taxes; or (G) enter into a closing agreement with any Governmental Authority regarding any material Tax; or (H) incur any material Taxes outside of the ordinary course of business, other than in connection with the transactions contemplated by this Agreement;
(n) incur or commit to incur any capital expenditure (excluding, for the avoidance of doubt, internal and external capitalized labor costs) other than (1) consistent with the capital expenditure budget set forth in Section 5.2(n) of the Company Disclosure Letter or (2) to the extent that such capital expenditures do not exceed $1,000,000 in the aggregate;
(o) enter into, modify, amend or terminate any (a) Contract (other than any Material Contract) that if so entered into, modified, amended or terminated would have a Company Material Adverse Effect; or (b) Material Contract, except in the ordinary course of business or as security permitted under Section 5.2(j);
(p) maintain insurance at less than current levels or otherwise become liable for indebtedness in a manner inconsistent with past practice in any material respect;
(q) engage in any transaction with, or enter into any agreement, arrangement or understanding with, any Affiliate of another Person (excluding the Company or other Person covered by Item 404 of Regulation S-K promulgated by the SEC that would be required to be disclosed pursuant to Item 404;
(r) effectuate a “plant closing,” “mass layoff” (each as defined in WARN) or other employee layoff event affecting in whole or in part any site of its Subsidiariesemployment, facility, operating unit or employee;
(s) grant any material refunds, credits, rebates or other allowances to any end user, customer, reseller or distributor, in each case other than in the ordinary course of business;
(t) acquire (by merger, consolidation or acquisition of stock or assets) any other Person or any material equity interest therein or enter into any joint venture, legal partnership (excluding, for avoidance of doubt, strategic relationships, alliances, reseller agreements and similar commercial relationships), limited liability corporation or similar arrangement with any third Person, in each case, other than investment in equity securities held in the ordinary course of business for cash management purposes;
(u) enter into any Collective Bargaining Agreement or agreement to form a work council or other Contract with any labor organization or works council (except to the extent required by applicable law);
(v) adopt or implement any stockholder rights plan or similar arrangement, in each case, applicable to the Offer or the Merger or any other transaction consummated pursuant to Parent’s rights under Section 5.3(e)(i)(2) or Section 5.3(e)(ii)(3); or
(iw) agree, resolveenter into, authorize any of, or agree or commit to enter into a Contract to take any action of the actions prohibited by this Section 5.2. Nothing contained in this Agreement shall give Parent or Merger Sub, directly or indirectly, the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective Time, without limiting or modifying the restrictions set forth in this Section 5.2, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its operations.
Appears in 1 contract
Forbearance Covenants. Except (a) as expressly contemplated by this Agreement, (bi) as set forth in Section 5.1 or Section 5.2 of the Company Disclosure Letter, ; (c) as required by applicable Law, or (dii) as approved in advance in writing by the Purchaser Parent (which approval will not be unreasonably withheld, conditioned or delayed); (iii) to the extent necessary to comply with the express obligations set forth in any Material Contract in effect on the date hereof (iv) as required by applicable law or (v) as expressly contemplated by the terms of this Agreement, at all times during the period from commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant to Article IX VIII and the ClosingEffective Time, the Company will not, and will not permit any of its Subsidiaries to, directly or indirectly:
(a) take amend the Charter, the Bylaws or any action set forth in Section 4.1 of the Stockholders Agreementother similar organizational document;
(b) acquire propose or agree to acquireadopt a plan of complete or partial liquidation, directly or indirectly, by purchasedissolution, merger, consolidation consolidation, restructuring, recapitalization or otherwise, equity or assets constituting all or substantially all of the business of (or any division of the business of) another Personother reorganization;
(c) issue, sell, assign, transfer, license, sublicense, abandon, permit to lapse, grant a covenant not to xxx, or otherwise dispose of any material Intellectual Property (other than non-exclusive licenses or sublicenses granted in the ordinary course of business);
(d) (i) authorize for issuance, issue, deliver, sell or transfer deliver or agree or commit to issue, deliver, sell or transfer deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities, except (A) for the issuance pursuant to Company Equity Awards outstanding as of the Capitalization Date and reflected in the numbers and totals set forth in Section 3.7 or granted in accordance with this Agreement in accordance with their terms and pursuant to the ESPP in accordance with its terms (as modified by Section 2.8(d) or Section 2.8(e)), including with respect to the satisfaction of Tax withholding and, with respect to the Company Options, the payment of the exercise price; or (B) as described on Section 5.2(c) of the Company Disclosure Letter;
(d) directly or indirectly acquire, repurchase or redeem any securities, except for repurchases, withholdings, or cancellations of Company Securities pursuant to the terms and conditions of Company Equity Awards outstanding as of the date hereof in accordance with their terms as of the date hereof;
(e) (A) adjust, split, combine or reclassify any shares of capital stock of stock, or other equity interest issue or convertible security in the Company authorize or any of its Subsidiaries or other rights of any kind to acquire, any shares of capital stock of or any other equity interest in the Company or any of its Subsidiaries, other than (x) propose the issuance of any other Company Securities in respect of, in lieu of or in substitution for, shares of its capital stock or other equity interests pursuant to or voting interest; (B) declare, set aside or pay any Employee Plan or (y) the issuance of capital stock dividend or other equity interests from any wholly owned Subsidiary to the Company distribution (whether in cash, shares or property or any other wholly owned Subsidiary combination thereof) in respect of the Company, (ii) amend or modify any term or provision of any of the Company’s outstanding equity securities or (iii) accelerate or waive any restrictions pertaining to the vesting of any Company equity-based awards or warrants or other rights of any kind to acquire any shares of capital stock or other equity interests or voting interest, or make any other actual, constructive or deemed distribution in the Company;
(e) propose or commit to reclassify, combine, split or subdivide any capital stock respect of the Company 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 other equity or voting interest; (C) pledge or encumber any shares of its Subsidiaries, except for, with respect to capital stock or other equity or voting interest; or (D) modify the terms of any Subsidiary shares of the Company, any intercompany restructuring, recapitalization its capital stock or similar transaction that will not have a Company Material Adverse Effectother equity or voting interest;
(f) enter into(A) incur, amend assume or terminate suffer any Contract with Starboard Value LP Indebtedness (including any long-term or short-term debt) or issue any of its Affiliates;
debt securities, except (g1) except as required under applicable Law or the terms of any Employee Plan existing as of the date of this Agreement, (i) increase the compensation or benefits payable to any current or former director or executive officer of the Company or any employee of the Company whose annual base salary is at least $300,000 (in each case, other than annual merit increases for trade payables incurred in the ordinary course of business; and (2) obligations incurred pursuant to business credit cards in the ordinary course of business; or (iiB) enter into any newassume, or amend any existing, employment, severance, change in control, retention, bonus guarantee, endorse or collective bargaining agreement otherwise become liable or similar agreement responsible (whether directly, contingently or arrangementotherwise) for the obligations of any other Person, in each case of (A) and (B), in an amount in excess of $5,000,000 individually or $10,000,000 in the aggregate;
(ig) mortgage or pledge any of its assets, tangible or intangible, or create or suffer to exist any lien thereupon (other than Permitted Liens), other than in connection with financing transactions permitted by Section 5.2(f);
(h) make any loans, advances or capital contributions to, or investments in, any other Person, except for (1) extensions of credit to customers in the ordinary course of business; (2) advances to directors, officers and other employees for travel and other business-related expenses, in each case in the ordinary course of business and in compliance in all material respects with the Company’s policies related thereto; and (3) investment in equity securities held in the ordinary course of business for cash management purposes;
(i) acquire, lease, license, sell, abandon, transfer, assign, guarantee, or exchange any assets, tangible or intangible (including any Company Intellectual Property), in each case in excess of $5,000,000 individually or $10,000,000 in the aggregate, or, in the case of the abandonment or transfer of Company Intellectual Property, which is otherwise material and other than investments by (1) the Company sale, lease or a wholly owned Subsidiary licensing of the Company to a wholly owned Subsidiary products or services of the Company or other materials embodying Company Intellectual Property in the ordinary course of business; (2) the acquisition, assignment or abandonment of immaterial Company Intellectual Property in connection with the exercise of the reasonable business judgment of the Company in the ordinary course of business; (3) the abandonment of trade secrets and Company Intellectual Property in the ordinary course of business and to the extent not economically desirable to maintain for the conduct of the business of the Company; (4) acquisitions of inventory, raw materials and other property or advances services in the ordinary course of expenses business; and (5) any capital expenditures permitted by (or consented to by Parent) under Section 5.2(n);
(j) (A) enter into, adopt, amend (including accelerating the vesting, payment or funding), modify or terminate any bonus, profit sharing, compensation, severance, termination, option, appreciation right, performance unit, phantom equity, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, severance or other Employee Plan or employee benefit agreement, trust, plan, fund or other arrangement for the compensation, benefit or welfare of any director, officer, individual consultant or employee of the Company in any manner; (B) increase the compensation of any director, officer, employee, individual consultant, former employee, individual independent contractor, or other individual service provider of the Company, pay any special bonus or special remuneration to any director, officer, employee employee, individual consultant, former employee, individual independent contractor, or agent other individual service provider of the Company, or pay any benefit not required by (or accelerate the time of payment or vesting of any payment becoming due under) any Employee Plan as in effect as of the date hereof, except in the case of each of (A) and (B), (1) as may be required by applicable law or the terms of the applicable Employee Plan in effect as of the date hereof; (2) in connection with any new hires of employees of the Company in connection the ordinary course of business and consistent with advancement obligations past practice at the vice president level or below; or (3) for increases in compensation for employees of the Company at the vice president level or below in the ordinary course of business and consistent with past practice (it being understood that these exceptions in the foregoing clauses (1), (2) and (3) will not apply to any actions otherwise prohibited by Section 5.2(c) or the following sub-clause (C); or (C) enter into any change in control, severance or similar agreement or any retention or similar agreement with any officer, employee, director, individual independent contractor, individual consultant, or other individual service provider of the Company; provided that, in each case of (A) through (C), the Company (x) may change the title of its employees, provided such changes in title do not involve increases in the applicable employee’s compensation or benefits, acceleration of vesting or acceleration of payment of the applicable employee’s benefits or compensation, and (y) may make annual or quarterly bonus or commission payments in the ordinary course of business consistent with past practice (including with respect to timing, frequency and magnitude) pursuant to existing plans made available to Parent as of the date of this Agreement and payments to employees, and set targets and metrics therefor in the ordinary course of business or in accordance with any Employee Plans in effect on as of the date of this Agreement;
(k) settle, release, waive or compromise any pending or threatened material Legal Proceeding or other claim, except for the settlement of any Legal Proceedings or other claim that is (A) reflected or reserved against in the Audited Company Balance Sheet; (B) for solely monetary payments of no more than $1,000,000 individually and $5,000,000 in the aggregate; or (C) settled in compliance with Section 6.15;
(l) except as required by applicable law or GAAP, (iiA) incur, assume or modify revalue in any material indebtedness respect any of its properties or assets, including writing-off notes or accounts receivable, other than in the ordinary course of business; or (iiiB) assumemake any change in any of its accounting principles or practices;
(A) make or change any material Tax election; (B) settle, guaranteeconsent to or compromise any material Tax claim or assessment or surrender a right to a material Tax refund; (C) consent to any extension or waiver of any limitation period with respect to any material Tax claim or assessment; (D) file an amended Tax Return that could materially increase the Taxes payable by the Company; (E) enter into a closing agreement with any Governmental Authority regarding any material Tax; (F) fail to pay any Tax that becomes due and payable (including any estimated tax payments) unless such amount is being contested in good faith by appropriate proceedings and appropriate reserves have been established to the extent required by GAAP; or (G) adopt or change any Tax accounting method;
(n) incur or commit to incur any capital expenditure(s) other than (1) consistent with the capital expenditure budget set forth in Section 5.2(n) of the Company Disclosure Letter or (2) to the extent that such capital expenditures do not exceed $5,000,000 in the aggregate;
(o) enter into, endorsemodify, xxxxx x xxxx amend or terminate any (a) Contract (other than any Material Contract) that if so entered into, modified, amended or terminated would have a Permitted LienCompany Material Adverse Effect; or (b) on any Material Contract, except in the ordinary course of the Company’s assets business or as security permitted under Section 5.2(c) and Section 5.2(j);
(p) maintain insurance at less than current levels or otherwise become liable for indebtedness in a manner inconsistent with past practice in any material respect;
(q) engage in any transaction with, or enter into any agreement, arrangement or understanding with, any Affiliate of another Person (excluding the Company or other Person covered by Item 404 of Regulation S-K promulgated by the SEC that would be required to be disclosed pursuant to Item 404;
(r) effectuate a “plant closing,” “mass layoff” (each as defined in WARN) or other employee layoff event affecting in whole or in part any site of its Subsidiariesemployment, facility, operating unit or employee;
(s) grant any material refunds, credits, rebates or other allowances to any end user, customer, reseller or distributor, in each case other than in the ordinary course of business;
(t) acquire (by merger, consolidation or acquisition of stock or assets) any other Person or any material equity interest therein or enter into any joint venture, legal partnership (excluding, for avoidance of doubt, strategic relationships, alliances, reseller agreements and similar commercial relationships), limited liability corporation or similar arrangement with any third Person, in each case, other than investment in equity securities held in the ordinary course of business for cash management purposes;
(u) enter into any Collective Bargaining Agreement or agreement to form a work council or other Contract with any labor organization or works council (except to the extent required by applicable law);
(v) adopt or implement any stockholder rights plan or similar arrangement, in each case, applicable to the Merger or any other transaction consummated pursuant to Parent’s rights under Section 5.3(e)(i)(2) or Section 5.3(e)(ii)(3); or
(iw) agree, resolveenter into, authorize any of, or agree or commit to enter into a Contract to take any action of the actions prohibited by this Section 5.2. Nothing contained in this Agreement shall give Parent or Merger Sub, directly or indirectly, the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its operations.
Appears in 1 contract
Samples: Merger Agreement (Ellie Mae Inc)
Forbearance Covenants. Except (a) as expressly contemplated by this Agreement, (b) as set forth in Section 5.1 or Section 5.2 of the Company Disclosure Letter, (c) as required by applicable Law, Law or by COVID-19 Measures or (d) as approved in advance in writing by the Purchaser (which approval will shall not be unreasonably withheld, conditioned or delayed), during the period from the execution and delivery of this Agreement until the earlier to occur of the termination of this Agreement pursuant to Article IX VIII and the Closing, the Company will shall not, and will shall not permit any of its Subsidiaries to, directly or indirectly:
(a) take any action set forth in Section 4.1 13(b) or 13(c) of the Stockholders AgreementCertificate of Designations;
(b) acquire or agree to acquire, directly or indirectly, by purchase, merger, consolidation or otherwise, any equity or assets constituting all or substantially all a material portion of the business of (or any division of the business of) another Person;
(c) sell, assign, transfer, licenselicense (other than non-exclusive licenses in the ordinary course of business consistent with past practice), sublicense, abandon, permit to lapse, grant a covenant not to xxx, or otherwise dispose of any material Intellectual Property Company Owned IP (other than non-exclusive licenses or sublicenses granted in the ordinary course of business);
(d) disclose, release or otherwise fail to maintain the confidential nature of any source code to Company Software or other Trade Secrets;
(e) (i) authorize for issuance, issue, deliver, sell or transfer or agree or commit to issue, deliver, sell or transfer any shares of capital stock of or other equity interest or convertible security in the Company or any of its Subsidiaries or other rights of any kind to acquire, any shares of capital stock of or any other equity interest in the Company or any of its Subsidiaries, other than (xA) the issuance of capital stock or other equity interests pursuant to any Employee Plan or Plan, (yB) the issuance of capital stock or other equity interests from any wholly owned Subsidiary to the Company or any other wholly owned Subsidiary of the Company, Company or (C) the issuance of Company Common Stock pursuant to the Company Notes; (ii) amend or modify any term or provision of any of the Company’s outstanding equity securities securities; or (iii) accelerate or waive any restrictions pertaining to the vesting of any Company equity-based awards or warrants or other rights of any kind to acquire any shares of capital stock or other equity interests in the Company;
(ef) propose or commit to reclassify, combine, split or subdivide any capital stock of the Company or any of its Subsidiaries 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 any of its Subsidiaries, except for, with respect to any Subsidiary of the Company, any intercompany restructuring, recapitalization or similar transaction that will not have a Company Material Adverse Effect;
(f) enter into, amend prevent or terminate delay the consummation of the Viking Transaction or the other transactions contemplated by this Agreement or result in any Contract with Starboard Value LP or any of its Affiliatesadverse impact on Purchaser;
(g) except as required under applicable Law or the terms of any Employee Plan existing or as set forth in Section 5.2(g) of the date of this AgreementCompany Disclosure Letter, (i) increase the compensation or benefits payable to any current or former director (A) director, (B) executive officer, or executive officer (C) employee or independent contractor, other than increases with respect to employees at the Director level or below in the ordinary course of business consistent with past practice, by no more than ten percent of such individual’s compensation or benefits payable immediately prior to such increase, and as otherwise not prohibited by Section 5.2(h), (ii) accelerate the vesting or payment of any Employee Plan or other compensation or benefit plan, program, agreement or arrangement for, any director, employee or independent contractor, (iii) enter into, adopt, amend, terminate or increase the coverage or benefits available under any Employee Plan (or other compensation or benefit plan, program, agreement or arrangement that would be an Employee Plan if in effect on the date of this Agreement), other than ordinary course changes in relation to annual renewals, or (iv) grant any equity or equity-based awards of the Company or any of its Subsidiaries to any director, employee or independent contractor of the Company whose or any of its Subsidiaries;
(h) (i) hire, offer to hire or promote any new Person with an annual base salary is at least or annualized fee in excess of $300,000 (in each case250,000, other than annual merit increases in the ordinary course of business) or (ii) terminate the employment or service of any employee with an annual salary or annualized fee in excess of $250,000 or any employee with a title of Director or above of the Company or any of its Subsidiaries other than for “cause” or (iii) institute any general layoff of employees or implement any plant closings, reductions in force, furloughs, temporary layoffs, early retirement plan or announce the planning of any such action;
(i) enter into into, amend or extend any new, Collective Bargaining Agreement or amend other Contract with any existing, employment, severance, change in control, retention, bonus guarantee, or collective bargaining agreement union or similar agreement or arrangementlabor organization;
(j) waive or release any material noncompetition, nonsolicitation, nondisclosure, noninterference, nondisparagement or other restrictive covenant obligation of any current or former employee or independent contractor;
(k) (i) make any loans, advances or capital contributions to, or investments in, any other Person, other than investments by the Company or a wholly owned Subsidiary of the Company to a wholly owned Subsidiary of the Company or the Company or advances of expenses to any director, officer, employee or agent of the Company in connection with advancement obligations in effect on the date of this Agreement, (ii) incur, assume or modify any material indebtedness or (iii) assume, guarantee, endorse, xxxxx x xxxx (other than a Permitted LienLien or any lien on Intellectual Property) on any of the Company’s assets as security or otherwise become liable for indebtedness of another Person (excluding the Company or any of its Subsidiaries); or
(il) agree, resolve, authorize or commit to take any action prohibited by this Section 5.2.
Appears in 1 contract
Samples: Series B 2 Convertible Preferred Stock Purchase Agreement (Fluidigm Corp)
Forbearance Covenants. Except (a) as expressly contemplated by this Agreement, (bi) as set forth in Section 5.1 or Section 5.2 of the Company Disclosure Letter, ; (c) as required by applicable Law, or (dii) as approved in advance in writing by the Purchaser Parent (which approval will not be unreasonably withheld, conditioned or delayed); (iii) for actions or omissions that constitute COVID-19 Measures (following reasonable prior consultation with Parent); or (iv) as expressly contemplated by the terms of this Agreement, at all times during the period from commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant to Article IX VIII and the ClosingEffective Time, the Company will not, and will not permit any of its Subsidiaries Subsidiaries, to, directly or indirectly:
(a) take amend or otherwise change the Charter, the Bylaws or any action set forth in Section 4.1 of the Stockholders Agreementother similar organizational document;
(b) acquire propose or agree to acquireadopt a plan of complete or partial liquidation, directly or indirectly, by purchasedissolution, merger, consolidation consolidation, restructuring, recapitalization or otherwise, equity or assets constituting all or substantially all of the business of (or any division of the business of) another Personother reorganization;
(c) issue, sell, assign, transfer, license, sublicense, abandon, permit to lapse, grant a covenant not to xxx, or otherwise dispose of any material Intellectual Property (other than non-exclusive licenses or sublicenses granted in the ordinary course of business);
(d) (i) authorize for issuance, issue, deliver, sell or transfer deliver or agree or commit to issue, deliver, sell or transfer deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities, except (A) for the issuance and sale of shares of Company Common Stock pursuant to Company Options or Company Stock-Based Awards or Convertible Debentures outstanding as of the Capitalization Date in accordance with their terms and (B) the issuance of shares of Company Common Stock in respect of a participant’s accumulated contributions under the ESPP in accordance with the terms of the ESPP at the conclusion of the Final Offering Period;
(d) directly or indirectly acquire, repurchase or redeem any securities, except for (A) forfeitures, repurchases or withholding of Company Securities pursuant to the terms and conditions of Company Stock-Based Awards or Company Options outstanding as of the date of this Agreement or granted after the date of this Agreement in accordance with the terms of this Agreement in accordance with their unamended terms, or (B) transactions between the Company and any of its direct or indirect wholly-owned Subsidiaries;
(e) (A) adjust, split, subdivide, combine or reclassify any shares of capital stock of stock, or other equity interest issue or convertible security in the Company authorize or any of its Subsidiaries or other rights of any kind to acquire, any shares of capital stock of or any other equity interest in the Company or any of its Subsidiaries, other than (x) propose the issuance of any other Company Securities in respect of, in lieu of or in substitution for, shares of its capital stock or other equity interests pursuant to or voting interest; (B) declare, set aside, authorize, establish a record date for or pay any Employee Plan or (y) the issuance of capital stock dividend or other equity interests from any wholly owned Subsidiary to the Company distribution (whether in cash, shares or property or any other wholly owned Subsidiary combination thereof) in respect of the Company, (ii) amend or modify any term or provision of any of the Company’s outstanding equity securities or (iii) accelerate or waive any restrictions pertaining to the vesting of any Company equity-based awards or warrants or other rights of any kind to acquire any shares of capital stock or other equity interests or voting interest, or make any other actual, constructive or deemed distribution in the Company;
(e) propose or commit to reclassify, combine, split or subdivide any capital stock respect of the Company or issue or authorize the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of capital stock or other equity or voting interest, except for cash dividends made by any direct or indirect wholly owned Subsidiary of the Company to the Company or any one of its other wholly owned Subsidiaries, except for, with respect to ; (C) pledge or encumber any Subsidiary shares of its capital stock or other equity or voting interest; or (D) modify the Company, terms of any intercompany restructuring, recapitalization shares of its capital stock or similar transaction that will not have a Company Material Adverse Effectother equity or voting interest;
(f) enter into(A) incur, amend assume, suffer or terminate any Contract with Starboard Value LP or any of its Affiliates;
(g) except as required under applicable Law or modify the terms of any Employee Plan existing as of the date of this AgreementIndebtedness (including any long-term or short-term debt) or issue any debt securities, except (i1) increase the compensation or benefits payable to any current or former director or executive officer of the Company or any employee of the Company whose annual base salary is at least $300,000 (in each case, other than annual merit increases for trade payables incurred in the ordinary course of business; (2) for loans or advances to direct or indirect wholly owned Subsidiaries of the Company; (ii3) enter into for payment of the cash portion of the Settlement Amount (as defined in the Indentures) with respect to the conversion of any newConvertible Debentures in accordance with the terms thereof; and (4) for borrowings and letter of credit issuances under the Credit Facility in the ordinary course of business consistent with best practice; (B) assume, or amend any existing, employment, severance, change in control, retention, bonus guarantee, endorse or collective bargaining agreement otherwise become liable or similar agreement responsible (whether directly, contingently or arrangement;
otherwise) for the obligations of any other Person, except with respect to obligations of direct or indirect wholly owned Subsidiaries of the Company; (iC) make any loans, advances or capital contributions to, or investments in, any other Person, except for (i) advances to directors, officers and other than investments by employees for travel and other business-related expenses incurred in connection with such person’s role at the Company or a wholly owned Subsidiary one of its Subsidiaries in the Company to a wholly owned Subsidiary ordinary course of the Company business or the Company or advances of expenses (ii) capital contributions made in response to any directorCOVID-19 Measures; or (D) mortgage, officerpledge or otherwise encumber any assets, tangible or intangible, or create or suffer to exist any Lien thereupon (other than Permitted Liens);
(g) terminate any employee at the level of senior vice president or agent above (other than for cause or in response to any COVID-19 Measures) or hire any new employee at the level of the Company senior vice president or above;
(A) enter into, adopt, amend (including accelerating vesting), modify or terminate any Employee Plan or any agreement, trust, plan, fund or other arrangement that would be an Employee Plan if it were in connection with advancement obligations in effect on existence as of the date of this AgreementAgreement (“New Employee Plans”), except in the ordinary course of business and consistent with past practice in a manner that would not, in the aggregate of all Employee Plans and New Employee Plans, materially increase the cost to the Company and its Subsidiaries; (iiB) incurincrease the compensation or benefits of any Company Employee; (C) pay any special bonus or special remuneration to any Company Employee, assume or modify pay any material indebtedness benefit not required by any Employee Plan; (D) grant any severance or termination pay to any Company Employee, other than to employees below the level of senior vice president in the ordinary course of business and consistent with past practice in accordance with the Company’s severance policy set forth in Section 5.1(h)(D) of the Company Disclosure Letter; or (iiiE) assumegrant to any Company Employee any right to reimbursement, guaranteeindemnification or payment for any Taxes, endorse, xxxxx x xxxx (other than a Permitted Lien) including any Taxes incurred under Section 409A or 4999 of the Code on any of the Company’s assets foregoing, except in the case of each of (A), (B), (C), (D) or (E), as security may be required by applicable Law or otherwise become liable the terms of an Employee Plan;
(i) settle, release, waive or compromise any pending or threatened Legal Proceeding against the Company or its Subsidiaries or agree to any remedies with respect to any Legal Proceeding or settlement thereof, except for indebtedness the settlement of another Person any Legal Proceedings (excluding A) solely for monetary damages in an amount (1) not in excess of $250,000 or (2) that does not exceed that which is reflected or reserved against in the Audited Company Balance Sheet; or (B) in compliance with Section 6.13;
(j) except as required by applicable Law or GAAP, (A) revalue in any material respect any of its properties or assets, including writing-off notes or accounts receivable, other than in the ordinary course of business; or (B) make any change in any of its accounting principles or practices;
(k) except as required by applicable Law or GAAP, (A) make or change any material Tax election; (B) adopt or change any accounting method with respect to Taxes or change an annual accounting period; (C) settle, consent to or compromise any material Tax claim or assessment relating to the Company or any of its Subsidiaries); or(D) file any material amended Tax Returns; (E) enter into any closing agreement in respect of a material Tax; (F) surrender any right to claim a refund for material Taxes; or (G) request any extension or waiver of any limitation period with respect to any material Tax claim or assessment relating to the Company or any of its Subsidiaries;
(il) agree, resolve(A) incur, authorize or commit to incur any capital expenditures other than (1) consistent in all material respects with the capital expenditure budget set forth in Section 5.2(l) of the Company Disclosure Letter; or (2) pursuant to agreements in effect prior to the date of this Agreement and set forth on Section 5.2(l) of the Company Disclosure Letter; (B) enter into, modify, amend or terminate any (1) Contract (other than any Material Contract) that if so entered into, modified, amended or terminated would have a Company Material Adverse Effect; or (2) Material Contract except in the ordinary course of business; (C) fail to use commercially reasonable efforts to maintain insurance at current levels and otherwise in a manner consistent with past practice; (D) engage in any transaction with, or enter into any agreement, arrangement or understanding with, any Affiliate of the Company or other Person covered by Item 404 of Regulation S-K promulgated by the SEC that would be required to be disclosed pursuant to Item 404; (E) effectuate a “plant closing” or “mass layoff” (each as defined in WARN) affecting in whole or in part any site of employment, facility, operating unit or employee; (F) grant any material refunds, credits, rebates or other allowances to any end user, customer, reseller or distributor or materially accelerate, or materially alter practices and policies relating to, the rate of collection of accounts receivable or payment of accounts payable, in each case other than in the ordinary course of business; or (G) waive, release, grant, encumber or transfer any right material to the Company and its Subsidiaries other than in the ordinary course of business;
(m) voluntarily recognize any labor union, works council or similar employee organization or enter into a Collective Bargaining Agreement, in each case, except as may be required by applicable Law;
(n) acquire (by merger, consolidation or acquisition of stock or assets or otherwise), or make any investment in any interest in, any assets or any other Person or any equity interest therein, except for purchases of assets in the ordinary course of business;
(A) sell or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) any assets constituting a material line of business or any corporation, partnership or other business organization or material division thereof; (B) subject to a Lien, sell, assign, license (or grant a covenant not to xxx or similar rights under), sublicense, transfer, allow to lapse or expire, pledge, abandon, discontinue, fail to maintain or otherwise dispose of any other material assets of the Company and its Subsidiaries or any items of Company Intellectual Property material to the Company and its Subsidiaries; other than in the ordinary course of business and (for purposes of clauses (A) and (B)) consistent with past practice;
(p) enter into any new business segment outside of the Company’s and its Subsidiaries’ existing business segments on the date of this Agreement;
(q) modify any of its Privacy Policies or take any action expected to impact the integrity, security or operation of the IT Assets used in their businesses in any materially adverse manner, in each case except as required by applicable Law; or
(r) enter into, authorize or commit to enter into a Contract or other agreement to take any of the actions prohibited by this Section 5.2.
Appears in 1 contract
Forbearance Covenants. Except (a) as expressly contemplated by this Agreement, (bi) as set forth in Section 5.1 or Section 5.2 of the Company Disclosure Letter, ; (c) as required by applicable Law, or (dii) as approved in advance in writing by the Purchaser Parent (which approval will not be unreasonably withheld, conditioned or delayed); (iii) for actions or omissions that constitute COVID-19 Measures (following reasonable prior consultation with Parent); (iv) as expressly contemplated by the terms of this Agreement; or (v) as required by applicable Law or the regulations or requirements of any stock exchange or regulatory organization applicable to the Company or any of its Subsidiaries, at all times during the period from commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant to Article IX VIII and the ClosingEffective Time, the Company will not, and will not permit any of its Subsidiaries (it being understood and agreed that the Company’s obligations with respect to the following, to the extent pertaining to the Specified JV Entities, shall be limited solely to its obligation not to, directly and to cause its Subsidiaries (other than the Specified JV Entities) not to, actively permit, authorize or indirectlyconsent to any of the following actions to be taken by any of the Specified JV Entities to the extent that the Company or such Subsidiary (other than the Specified JV Entities) has the right to permit, authorize or consent to such action), to:
(a) take amend or otherwise change the Charter, the Bylaws or any action set forth in Section 4.1 of other similar organizational document, other than, with respect to the Stockholders AgreementCompany’s wholly owned Subsidiaries, any immaterial or ministerial amendments thereto;
(b) acquire propose or agree to acquireadopt a plan of complete or partial liquidation, directly or indirectly, by purchasedissolution, merger, consolidation consolidation, restructuring, recapitalization or otherwise, equity or assets constituting all or substantially all of the business of (or any division of the business of) another Personother reorganization;
(c) issue, sell, assign, transfer, license, sublicense, abandon, permit to lapse, grant a covenant not to xxx, or otherwise dispose of any material Intellectual Property (other than non-exclusive licenses or sublicenses granted in the ordinary course of business);
(d) (i) authorize for issuance, issue, deliver, sell or transfer deliver or agree or commit to issue, deliver, sell or transfer deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities, except (x) for the issuance and sale of shares of Company Common Stock pursuant to the exercise or settlement, as applicable, of Company Options or Company Stock-Based Awards in accordance with their terms or (y) as provided on Section 5.2(h) of the Company Disclosure Letter;
(d) directly or indirectly acquire, repurchase or redeem any Company Securities or any securities of its Subsidiaries, except for (A) forfeitures, repurchases or withholding of Company Securities pursuant to the terms and conditions of Company Options and Company Stock-Based Awards in accordance with their terms or (B) transactions between the Company and any of its direct or indirect wholly owned Subsidiaries, or among any of the Company’s direct or indirect wholly owned Subsidiaries;
(e) (A) adjust, split, subdivide, combine or reclassify any shares of capital stock of stock, or other equity interest issue or convertible security in the Company authorize or any of its Subsidiaries or other rights of any kind to acquire, any shares of capital stock of or any other equity interest in the Company or any of its Subsidiaries, other than (x) propose the issuance of any other Company Securities in respect of, in lieu of or in substitution for, shares of its capital stock or other equity interests pursuant to or voting interest; (B) declare, set aside, authorize, establish a record date for or pay any Employee Plan or (y) the issuance of capital stock dividend or other equity interests from any wholly owned Subsidiary to the Company distribution (whether in cash, shares or property or any other wholly owned Subsidiary combination thereof) in respect of the Company, (ii) amend or modify any term or provision of any of the Company’s outstanding equity securities or (iii) accelerate or waive any restrictions pertaining to the vesting of any Company equity-based awards or warrants or other rights of any kind to acquire any shares of capital stock or other equity interests or voting interest, or make any other actual, constructive or deemed distribution in respect of the Companyshares of capital stock or other equity or voting interest, except for (x) cash dividends made by any direct or indirect wholly owned Subsidiary of the Company to the Company or one of its other wholly owned Subsidiaries or (y) one regular cash dividend on Company Common Stock in an amount per share of Company Common Stock not in excess of $0.47; provided that the declaration, record and payment date of such dividend shall be consistent with the historical declaration, record and payment date for the dividend on Company Common Stock from fiscal year 2021 or if such date is not a Business Day, the next day that is a Business Day; (C) pledge or encumber any shares of its capital stock or other equity or voting interest; or (D) modify the terms of any shares of its capital stock or other equity or voting interest;
(ef) propose (A) incur, assume, suffer or commit modify the terms of any Indebtedness (including any long-term or short-term debt) or issue any debt securities, except (1) for trade payables incurred in the ordinary course of business; (2) for loans or advances to reclassify, combine, split direct or subdivide any capital stock indirect wholly owned Subsidiaries of the Company or issue (3) for borrowings and letter of credit issuances under the Credit Facility in the ordinary course of business consistent with past practice; (B) assume, guarantee, endorse or authorize otherwise become liable or responsible (whether directly, contingently or otherwise) for the issuance obligations of any other securities Person, except with respect to obligations of direct or indirect wholly owned Subsidiaries of the Company; or (C) mortgage, pledge or otherwise encumber any assets, tangible or intangible, or create or suffer to exist any Lien thereupon (other than Permitted Liens);
(g) except in respect ofconsultation with Xxxxxx, terminate any employee at the level of Senior Vice President or above (other than for cause) or hire any new employee at the level of Senior Vice President or above;
(h) (A) enter into, adopt, amend (including accelerating vesting), modify or terminate any Employee Plan or any agreement, trust, plan, fund or other arrangement that would be an Employee Plan if it were in existence as of the date of this Agreement; (B) increase the compensation or benefits of any Company Employee; (C) pay any special bonus or special remuneration to any Company Employee or pay any benefit not required by any Employee Plan; (D) grant any severance or termination pay to any Company Employee; or (E) grant to any Company Employee any right to reimbursement, indemnification or payment for any Taxes, including any Taxes incurred under Section 409A or 4999 of the Code on any of the foregoing, except, in lieu ofeach case, as required by applicable Law or the terms of any Employee Plan;
(i) settle, release, waive or compromise any pending or threatened Legal Proceeding (which shall include Specified Litigation) against the Company or its Subsidiaries or agree to any remedies with respect to any Legal Proceeding or settlement thereof, except for the settlement of any Legal Proceedings or series of Legal Proceedings arising out of the same type of act or occurrence solely for monetary damages in substitution foran amount (1) not in excess of $10,000,000 for such Legal Proceedings or series of Legal Proceedings or (2) that does not exceed that which is reflected or reserved against in the Audited Company Balance Sheet;
(j) except as required by applicable Law or GAAP, shares (A) revalue any properties or assets material in any respect to the Company and its Subsidiaries, taken as a whole, including writing-off notes or accounts receivable, other than in the ordinary course of capital stock business; or (B) make any change in any of its accounting principles or practices;
(k) except as required by applicable Law, (A) amend any previously filed income Tax Return or other material Tax Return of the Company or any of its Subsidiaries, except for, ; (B) other than with respect to any Subsidiary transaction conducted at arms’-length with a third party, incur any material liabilities for Taxes other than in the ordinary course of business, (C) make, revoke or change any material Tax election of the CompanyCompany or its Subsidiaries; (D) adopt or change any accounting method with respect to Taxes or change an annual accounting period; (E) settle, consent to or compromise any intercompany restructuring, recapitalization material Tax claim or assessment relating to the Company or any of its Subsidiaries; (F) enter into any closing agreement or advance pricing agreement (or similar transaction agreement) in respect of a material Tax; (G) surrender any right to claim a refund for material Taxes; or (H) consent to any extension or waiver of any limitation period with respect to any material Tax claim or assessment relating to the Company or any of its Subsidiaries (other than any automatic extension of time in which to file a Tax Return);
(l) (A) incur, authorize or commit to incur any capital expenditures other than (1) consistent in all material respects with the capital expenditure budget set forth in Section 5.2(l) of the Company Disclosure Letter; or (2) pursuant to agreements in effect prior to the date of this Agreement and set forth on Section 5.2(l) of the Company Disclosure Letter; (B) other than in the ordinary course of business, enter into, modify, amend or terminate any (1) Contract (other than any Material Contract) that will not if so entered into, modified, amended or terminated would have a Company Material Adverse Effect;
; or (f2) Material Contract except in the ordinary course of business consistent with past practice; (C) fail to use reasonable best efforts to maintain insurance at or more than current levels or otherwise in a manner consistent with past practice; (D) engage in any transaction with, or enter intointo any agreement, amend arrangement or terminate understanding with, any Contract with Starboard Value LP or any of its Affiliates;
(g) except as required under applicable Law or the terms of any Employee Plan existing as of the date of this Agreement, (i) increase the compensation or benefits payable to any current or former director or executive officer Affiliate of the Company or other Person covered by Item 404 of Regulation S-K promulgated by the SEC that would be required to be disclosed pursuant to Item 404; (E) grant any employee of the Company whose annual base salary is at least $300,000 (refunds, credits, rebates or other allowances to any end user, customer, platform provider, reseller or distributor, in each case, which would be material to the Company and its Subsidiaries, taken as a whole, or materially accelerate, or materially alter practices and policies relating to, the rate of collection of accounts receivable or payment of accounts payable, in each case other than annual merit increases in the ordinary course of business; or (F) waive, release, grant, encumber or transfer any right material to the Company and its Subsidiaries taken as a whole, other than in the ordinary course of business;
(m) effectuate a “plant closing” or “mass layoff” (each as defined in WARN) affecting in whole or in part any site of employment, facility, operating unit or employee, in each case, located in the United States;
(n) voluntarily recognize any labor union, works council or similar employee organization or enter into a Collective Bargaining Agreement;
(o) acquire (by merger, consolidation or acquisition of stock or assets or otherwise), or make any investment in any interest in, any assets or any other Person or any equity interest therein, in each case, with a value (i) in excess of $50,000,000 per transaction or series of transactions; provided that the Company shall consult with Parent prior to acquiring (by merger, consolidation or acquisition of stock or assets or otherwise) or making any investment in any interest in, any assets or any other Person or any equity interest therein, in each case, with a value in excess of $25,000,000 and less than or equal to $50,000,000 per transaction or series of transactions; and (ii) enter into any newin excess of $250,000,000, or amend any existing, employment, severance, change in control, retention, bonus guarantee, or collective bargaining agreement or similar agreement or arrangementthe aggregate;
(ip) make any loans, advances or capital contributions to, or investments for treasury management purposes in, any other Person, except for (i) advances to directors, officers and other employees for travel and other business-related expenses incurred in connection with such person’s role at the Company or one of its Subsidiaries in the ordinary course of business consistent with past practice in accordance with Company policies for travel and business expenses, (ii) capital contributions made in response to any COVID-19 Measures or (iii) any investments in publicly-traded or private securities in the ordinary course of business consistent with past practice with a value equal to up to ten percent (10%) of the aggregate amount of all cash and cash equivalents of the Company as reflected in the most recent consolidated balance sheets (and the notes thereto) of the Company and its Subsidiaries;
(q) (A) sell or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) any assets constituting a material line of business or any corporation, partnership or other business organization or material division thereof or (B) subject to a Lien, sell, assign, license (or grant a covenant not to sue or similar rights under), sublicense, transfer, allow to lapse or expire, pledge, abandon, discontinue, fail to maintain or otherwise dispose of any other material assets of the Company or any of its Subsidiaries or any material items of Company Intellectual Property, other than investments (x) agreements for distribution of Company Products that are not prohibited by Section 5.2(t) and (y) licenses granted by the Company or a wholly owned Subsidiary its Subsidiaries in the ordinary course of business consistent with past practice;
(r) modify any of its Privacy Policies or the integrity, security or operation of the Company IT Assets used in their businesses, in each case, in any materially adverse manner to a wholly owned Subsidiary of the Company or the Company or advances of expenses to any directorand its Subsidiaries, officertaken as a whole, employee or agent of except as required by applicable Law (as determined by the Company in connection with advancement obligations in effect its reasonable judgment);
(s) enter into any new business segment that is not reasonably related to any of the Company’s and its Subsidiaries’ existing business segments on the date of this Agreement, ;
(iit) incur, assume or modify enter into any material indebtedness or (iii) assume, guarantee, endorse, xxxxx x xxxx (other than a Permitted Lien) on any agreement of the Company’s assets as security or otherwise become liable for indebtedness type listed on Section 5.2(t) of another Person (excluding the Company or any of its Subsidiaries)Disclosure Letter; or
(iu) agree, resolveenter into, authorize or commit to enter into a Contract or other agreement to take any action of the actions prohibited by this Section 5.2.
Appears in 1 contract
Samples: Agreement and Plan of Merger
Forbearance Covenants. Except (a) as expressly contemplated by this Agreement, (bi) as set forth in Section 5.1 or Section 5.2 of the Company Disclosure Letter, ; (c) as required by applicable Law, or (dii) as approved in advance in writing by the Purchaser Parent (which approval will not be unreasonably withheld, conditioned or delayed); or (iii) as expressly contemplated by the terms of this Agreement, at all times during the period from commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant to Article IX VIII and the ClosingEffective Time, the Company will not, and will not permit any of its Subsidiaries Subsidiaries, to, directly or indirectly:
(a) take amend the Charter, the Bylaws or any action set forth in Section 4.1 of the Stockholders Agreementother similar organizational document;
(b) acquire propose or agree to acquireadopt a plan of complete or partial liquidation, directly or indirectly, by purchasedissolution, merger, consolidation consolidation, restructuring, recapitalization or otherwise, equity or assets constituting all or substantially all of the business of (or any division of the business of) another Personother reorganization;
(c) issue, sell, assign, transfer, license, sublicense, abandon, permit to lapse, grant a covenant not to xxx, or otherwise dispose of any material Intellectual Property (other than non-exclusive licenses or sublicenses granted in the ordinary course of business);
(d) (i) authorize for issuance, issue, deliver, sell or transfer deliver or agree or commit to issue, deliver, sell or transfer deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities, except (A) for the issuance or sale of shares of Company Common Stock pursuant to Company Options, Company PSUs or Company RSUs outstanding as of the Capitalization Date in accordance with their terms and pursuant to the ESPP in accordance with its terms (as modified by Section 2.8(e)); (B) in connection with agreements in effect on the date hereof; or (C) as contemplated by Section 5.2(j);
(d) directly or indirectly acquire, repurchase or redeem any securities, except for (A) repurchases, withholdings, or cancellations of Company Securities pursuant to the terms and conditions of Company Options, Company RSUs or Company PSUs outstanding as of the date hereof in accordance with their terms as of the date hereof, or (B) transactions between the Company and any of its direct or indirect Subsidiaries;
(e) (A) adjust, split, combine or reclassify any shares of capital stock of stock, or other equity interest issue or convertible security in the Company authorize or any of its Subsidiaries or other rights of any kind to acquire, any shares of capital stock of or any other equity interest in the Company or any of its Subsidiaries, other than (x) propose the issuance of any other Company Securities in respect of, in lieu of or in substitution for, shares of its capital stock or other equity interests pursuant to or voting interest; (B) declare, set aside or pay any Employee Plan or (y) the issuance of capital stock dividend or other equity interests from any wholly owned Subsidiary to the Company distribution (whether in cash, shares or property or any other wholly owned Subsidiary combination thereof) in respect of the Company, (ii) amend or modify any term or provision of any of the Company’s outstanding equity securities or (iii) accelerate or waive any restrictions pertaining to the vesting of any Company equity-based awards or warrants or other rights of any kind to acquire any shares of capital stock or other equity interests or voting interest, or make any other actual, constructive or deemed distribution in the Company;
(e) propose or commit to reclassify, combine, split or subdivide any capital stock respect of the Company or issue or authorize the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of capital stock or other equity or voting interest, except for cash dividends made by any direct or indirect wholly owned Table of Contents Subsidiary of the Company to the Company or any one of its other wholly owned Subsidiaries, except for, with respect to ; (C) pledge or encumber any Subsidiary shares of its capital stock or other equity or voting interest; or (D) modify the Company, terms of any intercompany restructuring, recapitalization shares of its capital stock or similar transaction that will not have a Company Material Adverse Effectother equity or voting interest;
(f) enter into(A) incur, amend assume or terminate suffer any Contract with Starboard Value LP Indebtedness (including any long-term or short-term debt) or issue any of its Affiliates;
debt securities, except (g1) except as required under applicable Law or the terms of any Employee Plan existing as of the date of this Agreement, (i) increase the compensation or benefits payable to any current or former director or executive officer of the Company or any employee of the Company whose annual base salary is at least $300,000 (in each case, other than annual merit increases for trade payables incurred in the ordinary course of business; (2) obligations incurred pursuant to business credit cards in the ordinary course of business; and (3) intercompany loans or advances between or among the Company and/or its direct or indirect wholly-owned Subsidiaries; (iiB) enter into any newassume, or amend any existing, employment, severance, change in control, retention, bonus guarantee, endorse or collective bargaining agreement otherwise become liable or similar agreement responsible (whether directly, contingently or arrangementotherwise) for the obligations of any other Person, except with respect to obligations of direct or indirect wholly owned Subsidiaries of the Company;
(ig) mortgage or pledge any of its and its Subsidiaries’ assets, tangible or intangible, or create or suffer to exist any lien thereupon (other than Permitted Liens), other than in connection with financing transactions permitted by Section 5.2(f) or consented to by Parent;
(h) make any loans, advances or capital contributions to, or investments in, any other Person, except for (1) extensions of credit to customers in the ordinary course of business; (2) advances to directors, officers and other employees for travel and other business-related expenses, in each case in the ordinary course of business and in compliance in all material respects with the Company’s policies related thereto; and (3) loans, advances or capital contributions to, or investments in, direct or indirect wholly-owned Subsidiaries of the Company;
(i) acquire, lease, license, sell, abandon, transfer, assign, guarantee, or exchange any assets, tangible or intangible (including any Company Intellectual Property), in each case in excess of $250,000 individually, and other than investments by (1) the Company sale, lease or a wholly owned Subsidiary licensing of products or services of the Company to a wholly owned Subsidiary Group or other materials embodying Company Intellectual Property in the ordinary course of business; (2) the acquisition, assignment or abandonment of immaterial Company Intellectual Property in connection with the exercise of the reasonable business judgment of the Company or Group in the ordinary course of business; (3) the abandonment of trade secrets in the ordinary course of business and to the extent not economically desirable to maintain for the conduct of the business of the Company Group; and (4) any capital expenditures permitted by (or advances consented to by Parent) under Section 5.2(n);
(j) (A) enter into, adopt, amend (including accelerating the vesting, payment or funding), modify or terminate any bonus, profit sharing, compensation, severance, termination, option, appreciation right, performance unit, phantom equity, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, severance or other Employee Plan or employee benefit agreement, trust, plan, fund or other arrangement for the compensation, benefit or welfare of expenses any director, officer or employee of the Company Group in any manner; (B) increase the compensation of any director, officer, employee, individual consultant, former employee, individual independent contractor, or other individual service provider of the Company Group, pay any special bonus or special remuneration to any director, officer, employee employee, individual consultant, former employee, individual independent contractor, or agent other individual service provider of the Company Group, or pay any benefit not required by (or accelerate the time of payment or vesting of any payment becoming due under) any Employee Plan as in effect as of the date hereof, except in the case of each of (A) and (B), (1) as may be required by applicable law or the terms of the applicable Employee Plan in effect as of the date hereof; (2) in connection with advancement obligations any new hires of employees of the Company Group in effect on the date ordinary course of this Agreementbusiness and consistent with past practice and whose annual salary is less than $250,000; or (3) for increases in compensation for employees of the Company Group below the level of vice president and whose annual salary is less than $250,000 in the ordinary course of business and consistent with past practice (it being understood that these exceptions in the foregoing clauses (1), (ii2) incur, assume and (3) will not apply to any actions otherwise prohibited by Section 5.2(c) or modify any material indebtedness the following sub-clause (C); or (iiiC) assumeenter into any change in control, guaranteeseverance or similar agreement or any retention or similar agreement with any officer, endorseemployee, xxxxx x xxxx (director, individual independent contractor, individual consultant, or other than a Permitted Lien) on any individual service provider of the Company’s assets as security Company Group; Table of Contents (k) settle, release, waive or otherwise become liable compromise any pending or threatened material Legal Proceeding or other claim, except for indebtedness the settlement of another Person any Legal Proceedings or other claim that is (excluding A) reflected or reserved against in the Audited Company Balance Sheet; (B) for solely monetary payments of no more than $100,000 individually and $250,000 in the aggregate; or any of its Subsidiaries); or
(iC) agree, resolve, authorize or commit to take any action prohibited by this settled in compliance with Section 5.2.6.15;
Appears in 1 contract
Samples: Merger Agreement (Apptio Inc)
Forbearance Covenants. Except (a) as expressly contemplated by this Agreement, (b) as set forth in Section 5.1 or Section 5.2 of the Company Disclosure Letter, (c) as required by applicable Law, Letter or (d) as approved in advance in writing by the Purchaser (which approval will not be unreasonably withheldNewco, conditioned or delayed), at all times during the period from commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant to Article IX VIII and the ClosingEffective Time, the Company will not, shall not do any of the following and will shall not permit any of its Subsidiaries toto do any of the following (it being understood and hereby agreed that if any action is expressly permitted by any of the following subsections, directly or indirectly:such action shall be expressly permitted under Section 5.1 also):
(a) take any action set forth in Section 4.1 of the Stockholders Agreementamend its Charter or bylaws or comparable organizational documents;
(b) acquire propose or agree to acquireadopt a plan of complete or partial liquidation, directly or indirectly, by purchasedissolution, merger, consolidation consolidation, restructuring, recapitalization or otherwise, equity or assets constituting all or substantially all other reorganization of the business of (Company or any division of the business of) another Personits Subsidiaries;
(c) issue, sell, assign, transfer, license, sublicense, abandon, permit to lapse, grant a covenant not to xxx, or otherwise dispose of any material Intellectual Property (other than non-exclusive licenses or sublicenses granted in the ordinary course of business);
(d) (i) authorize for issuance, issue, deliver, sell or transfer deliver or agree or commit to issue, deliver, sell or transfer deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities or any Subsidiary Securities, except for the issuance and sale of shares of capital stock Company Common Stock pursuant to Company Options or Company Stock-Based Awards outstanding as of the Capitalization Date in accordance with their terms as of the date hereof;
(d) directly or other equity interest or convertible security in the Company or any of its Subsidiaries or other rights of any kind to indirectly acquire, repurchase or redeem any shares of capital stock of Company Securities or any other equity interest in the Company or any of its Subsidiaries, Subsidiary Securities (other than (x) the issuance repurchases of capital stock or other equity interests Company Securities pursuant to any Employee Plan or (y) the issuance terms and conditions of capital stock or other equity interests from any wholly owned Subsidiary to the Company or any other wholly owned Subsidiary Stock-Based Awards outstanding as of the Company, (ii) amend or modify any term or provision date of any this Agreement in accordance with their terms as of the Company’s outstanding equity securities or (iii) accelerate or waive any restrictions pertaining to the vesting of any Company equity-based awards or warrants or other rights of any kind to acquire any shares of capital stock or other equity interests in the Companydate hereof;
(e) propose (i) adjust, split, combine or commit to reclassifyreclassify any shares of capital stock, combine, split or subdivide any capital stock of the Company or issue or authorize or propose the issuance of any other securities in respect of, in lieu of, of or in substitution for, shares of its capital stock, (ii) declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any shares of capital stock, or make any other actual, constructive or deemed distribution in respect of the shares of capital stock, except for cash dividends made by any direct or indirect wholly-owned Subsidiary of the Company to the Company or one of its Subsidiaries, (iii) pledge or encumber any shares of its capital stock or any of its other securities, or (iv) modify the terms of any shares of its capital stock or any of its other securities;
(f) (i) incur, assume or suffer any Indebtedness (including any long-term or short-term debt) or issue any debt securities, except for (A) trade payables incurred in the ordinary course of business, and (B) loans or advances to direct or indirect wholly-owned Subsidiaries, (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except with respect to obligations of direct or indirect wholly-owned Subsidiaries of the Company, (iii) make any loans, advances or capital contributions to or investments in any other Person, except for travel advances in the ordinary course of business consistent with past practice to employees of the Company or any of its Subsidiaries, except for, with respect to any Subsidiary of the Company, any intercompany restructuring, recapitalization or similar transaction that will not have a Company Material Adverse Effect;
(fiv) enter into, amend mortgage or terminate any Contract with Starboard Value LP or pledge any of its Affiliatesor its Subsidiaries’ assets, tangible or intangible, or create or suffer to exist any lien thereupon (other than Permitted Liens);
(g) except as required under applicable Law (i) enter into, adopt, amend (including acceleration of vesting), modify or terminate any bonus, profit sharing, compensation, severance, termination, option, appreciation right, performance unit, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, severance or other employee benefit agreement, trust, plan, fund or other arrangement for the terms compensation, benefit or welfare of any Employee Plan existing director, officer or employee in any manner, except in any such case as may be required by applicable law, or (ii) increase the compensation of any director, officer or employee, pay any special bonus or special remuneration to any director, officer or employee, or pay any benefit not required by any plan or arrangement as in effect as of the date hereof, except in any such case as may be required by applicable law;
(i) settle any pending or threatened material Legal Proceeding, except for the settlement of any Legal Proceedings that is (x) reflected or reserved against in the Audited Company Balance Sheet, and (y) the settlement of which is not in excess of $250,000 or (ii) settle any pending or threatened Legal Proceeding related to or arising out of this Agreement, the transactions contemplated hereby or any other Acquisition Proposal;
(i) increase the compensation except as required by applicable law or benefits payable to GAAP, revalue in any current material respect any of its properties or former director assets, including writing-off notes or executive officer of the Company or any employee of the Company whose annual base salary is at least $300,000 (in each caseaccounts receivable, other than annual merit increases in the ordinary course of business and consistent with past practice;
(j) except as may be required as a result of a change in applicable law or in GAAP, make any change in any of the accounting principles or practices used by it;
(k) (i) make or change any material Tax election, (ii) settle or compromise any material Tax liability, or (iii) consent to any extension or waiver of any limitation period with respect to any claim or assessment for material Taxes;
(l) (i) incur or commit to incur any capital expenditures, or any obligations or liabilities in connection therewith that individually or in the aggregate, are in excess of $500,000, except in the ordinary course of business consistent with past practices, (ii) waive, release, grant or transfer any right of material value, other than in the ordinary course of business, consistent with past practice, or waive any material benefits of, or agree to modify in any material adverse respect, or, subject to the terms hereof, fail to enforce, or consent to any material matter with respect to which its consent is required under, any material confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is a party, (iii) enter into, modify, amend or terminate (A) any Contract which if so entered into, modified, amended or terminated could be reasonably likely to have a Company Material Adverse Effect or (iiB) except in the ordinary course of business, any Material Contract, (iv) maintain insurance at less than current levels or otherwise in a manner inconsistent with past practice, (v) engage in any transaction with, or enter into any newagreement, arrangement or amend understanding with any existing, employment, severance, change in control, retention, bonus guarantee, or collective bargaining agreement or similar agreement or arrangement;
(i) make any loans, advances or capital contributions to, or investments in, any other Person, other than investments by the Company or a wholly owned Subsidiary of the Company to a wholly owned Subsidiary Affiliate of the Company or other Person covered by Item 404 of Regulation S-K promulgated under the Company or advances of expenses Exchange Act that would be required to any director, officer, employee or agent of the Company in connection with advancement obligations in effect on the date of this Agreementbe disclosed under such Item 404, (iivi) incureffectuate a “plant closing” or “mass layoff,” as those terms are defined in WARN, assume affecting in whole or modify in part any material indebtedness site of employment, facility, operating unit or (iii) assume, guarantee, endorse, xxxxx x xxxx (other than a Permitted Lien) on any employee of the Company’s assets as security or otherwise become liable for indebtedness of another Person (excluding the Company or any of its Subsidiaries), (vii) grant any material refunds, credits, rebates or other allowances by the Company or its Subsidiaries to any end user, customer, reseller or distributor, in each case, other than in the ordinary course of business, or (viii) abandon or allow to lapse or expire any registration or application for material Company Intellectual Property;
(m) acquire (by merger, consolidation or acquisition of stock or assets) any other Person or any material equity interest therein;
(n) sell, transfer or encumber all or any material portion of its or its Subsidiaries’ assets outside of the ordinary course of business; or
(io) agree, resolve, authorize or commit enter into a Contract to take any action of the actions prohibited by this Section 5.2. The parties hereto acknowledge and hereby agree that the restrictions set forth in this Section 5.2 are not intended to give Newco or Merger Sub, directly or indirectly, the right to control or direct the business or operations of the Company or its Subsidiaries at any time prior to the Effective Time. Prior to the Effective Time, the Company and its Subsidiaries shall exercise, consistent with the terms, conditions and restrictions of this Agreement, control and supervision over their own business and operations.
Appears in 1 contract
Forbearance Covenants. Except (a) as expressly contemplated by this Agreement, (bi) as set forth in Section 5.1 or Section 5.2 of the Company Disclosure Letter, ; (c) as required by applicable Law, or (dii) as approved in writing in advance in writing by the Purchaser Parent (which approval will not be unreasonably withheld, conditioned or delayed); (iii) to the extent necessary to comply with the express obligations set forth in any Material Contract in effect on the date hereof, provided that this clause (iii) shall not circumvent or supersede the express restrictions set forth in clauses (a) through (w) below; (iv) as required by applicable law; or (v) as expressly contemplated by the terms of this Agreement, at all times during the period from the execution and delivery of this Agreement until the earlier to occur of the termination of this Agreement pursuant to Article IX and the ClosingInterim Period, the Company will not, and will not permit any of its Subsidiaries to, directly or indirectly, including through any Subsidiary:
(a) take amend the Charter, the Bylaws or any action set forth in Section 4.1 other similar organizational document of the Stockholders Agreementany Company Group Member;
(b) acquire propose or agree to acquireadopt a plan of complete or partial liquidation, directly or indirectly, by purchasedissolution, merger, consolidation consolidation, restructuring, recapitalization or otherwise, equity or assets constituting all or substantially all of the business of (or any division of the business of) another Personother reorganization;
(c) issue, sell, assign, transfer, license, sublicense, abandon, permit to lapse, grant a covenant not to xxx, or otherwise dispose of any material Intellectual Property (other than non-exclusive licenses or sublicenses granted in the ordinary course of business);
(d) (i) authorize for issuance, issue, deliver, sell or transfer deliver or agree or commit to issue, deliver, sell or transfer deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities, except (i) for the issuance pursuant to Company Equity Awards outstanding as of the Capitalization Date and reflected in the numbers and totals set forth in Section 3.7, (ii) pursuant to the ESPP in accordance with its terms (as modified by Section 2.8(e)), including with respect to the satisfaction of Tax withholding and, with respect to the Company Options, the payment of the exercise price, or (iii) as described in Section 5.2(c) of the Company Disclosure Letter;
(d) directly or indirectly acquire, repurchase or redeem any securities, except (A) for repurchases, withholdings, or cancellations of Company Securities pursuant to the terms and conditions of Company Equity Awards outstanding as of the date hereof in accordance with their terms as of the date hereof or (B) transactions between the Company and any of its direct or indirect Subsidiaries;
(e) (A) adjust, split, combine or reclassify any shares of capital stock of stock, or other equity interest issue or convertible security in the Company authorize or any of its Subsidiaries or other rights of any kind to acquire, any shares of capital stock of or any other equity interest in the Company or any of its Subsidiaries, other than (x) propose the issuance of any other Company Securities in respect of, in lieu of or in substitution for, shares of its capital stock or other equity interests pursuant to or voting interest; (B) declare, set aside or pay any Employee Plan or (y) the issuance of capital stock dividend or other equity interests from any wholly owned Subsidiary to the Company distribution (whether in cash, shares or property or any other wholly owned Subsidiary combination thereof) in respect of the Company, (ii) amend or modify any term or provision of any of the Company’s outstanding equity securities or (iii) accelerate or waive any restrictions pertaining to the vesting of any Company equity-based awards or warrants or other rights of any kind to acquire any shares of capital stock or other equity interests or voting interest, or make any other actual, constructive or deemed distribution in the Company;
(e) propose or commit to reclassify, combine, split or subdivide any capital stock respect of the Company or issue or authorize the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of capital stock or other equity or voting interest, except for cash dividends made by any direct or indirect wholly owned Subsidiary of the Company to the Company or any one of its other wholly owned Subsidiaries, except for, with respect to ; (C) pledge or encumber any Subsidiary shares of its capital stock or other equity or voting interest; or (D) modify the Company, terms of any intercompany restructuring, recapitalization shares of its capital stock or similar transaction that will not have a Company Material Adverse Effectother equity or voting interest;
(f) enter into(A) incur, amend assume or terminate suffer any Contract with Starboard Value LP Indebtedness (including any long-term or short-term debt) or issue any of its Affiliates;
debt securities, except (g1) except as required under applicable Law or the terms of any Employee Plan existing as of the date of this Agreement, (i) increase the compensation or benefits payable to any current or former director or executive officer of the Company or any employee of the Company whose annual base salary is at least $300,000 (in each case, other than annual merit increases for trade payables incurred in the ordinary course of business; (2) immaterial obligations incurred pursuant to business credit cards in the ordinary course of business and (3) intercompany loans or advances between or among the Company and/or its direct or indirect wholly-owned Subsidiaries; or (iiB) enter into any newassume, or amend any existing, employment, severance, change in control, retention, bonus guarantee, endorse or collective bargaining agreement otherwise become liable or similar agreement responsible (whether directly, contingently or arrangementotherwise) for the obligations of any other Person, except in any such case, Indebtedness which may be borrowed, incurred or arise, in each case in the ordinary course of business, under the Credit Facility in accordance with its terms as of the Agreement Date;
(ig) mortgage or pledge any of its assets, tangible or intangible, or create or suffer to exist any Lien thereupon (other than Permitted Liens), other than in connection with financing transactions permitted by Section 5.2(f);
(h) make any loans, advances or capital contributions to, or investments in, any other Person, except for (1) extensions of credit to customers in the ordinary course of business; (2) advances to directors, officers and other employees for travel and other business-related expenses, in each case in the ordinary course of business and in compliance in all material respects with the Company’s policies related thereto; and (3) loans, advances or capital contributions to, or investments in, direct or indirect wholly-owned Subsidiaries of the Company;
(i) acquire, lease, license, sell, abandon, transfer, assign, guarantee, or exchange any assets, tangible or intangible (including any Company Intellectual Property), in each case in excess of $2,000,000 individually or $5,000,000 in the aggregate, other than investments by (1) the Company sale, lease or a wholly owned Subsidiary licensing of products or services of the Company to a wholly owned Subsidiary Group or other materials embodying Company Intellectual Property in the ordinary course of business; (2) the acquisition, assignment or abandonment of immaterial Company Intellectual Property in connection with the exercise of the reasonable business judgment of the Company in the ordinary course of business; (3) the abandonment of trade secrets and Company Intellectual Property in the ordinary course of business and to the extent not economically desirable to maintain for the conduct of the business of the Company; (4) acquisitions of inventory, raw materials and other property or services in the ordinary course of business; and (5) any capital expenditures permitted by (or consented to by Parent) under Section 5.2(n);
(j) (A) enter into, adopt, amend (including accelerating the vesting, payment or funding), modify or terminate any bonus, profit sharing, compensation, severance, termination, option, restricted stock unit, appreciation right, performance unit, phantom equity, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, severance, change in control or other Employee Plan or employee benefit agreement, trust, plan, fund or other arrangement for the compensation, benefit or welfare of any director, officer, individual consultant or employee of the Company Group in any manner, except to the extent authorized on Section 5.2(j) of the Company Disclosure Letter; (B) increase the compensation or advances benefits payable to any (i) director, officer, employee, individual consultant, (ii) former employee, individual consultant, or other individual service provider of expenses the Company Group, pay any bonus or remuneration to any director, officer, employee employee, individual independent contractor, former employee, individual independent contractor, or agent (iii) other individual service provider of the Company Group, or pay any compensation or benefit not required by (or accelerate the time of payment or vesting of any payment becoming due under) any existing Employee Plan as in effect as of the date hereof, except in the case of each of (A) and (B), (1) as may be required by applicable Law or the terms of the applicable Employee Plan or any change in control, severance or similar agreement or any retention or similar agreement with any officer, employee, director, individual independent contractor, individual consultant, or other individual service provider of the Company Group, in each such case, which is set forth on Section 3.18(a) of the Company Disclosure Letter and in effect as of the Agreement Date; or (2) making Employee Plans available to any new hires of employees of the Company in connection the ordinary course of business and consistent with advancement obligations past practice at the vice president level or below; or (3) for increases in effect on compensation for employees of the date Company at the vice president level or below in the ordinary course of this Agreementbusiness and consistent with past practice; provided, that these exceptions in the foregoing clauses (1), (ii2) incurand (3) will not apply to any actions otherwise prohibited by Section 5.2(c) (including with respect to the grant or the issuance of Company Securities) or the following sub-clause (C); or (C) enter into any change in control, assume severance or modify similar agreement or any retention, transaction or similar agreement with any officer, employee, director, individual independent contractor, individual consultant, or other individual service provider of the Company Group; provided that, in each case of (A) through (C), the Company Group (x) may change the title of its employees, provided such changes in title do not involve increases in the applicable employee’s compensation or benefits, acceleration of vesting or acceleration of payment of the applicable employee’s benefits or compensation, and (y) may make annual or quarterly bonus or commission payments in the ordinary course of business as required by the terms of any Employee Plans set forth on Section 3.18(a) of the Company Disclosure Letter and made available to Parent as of the Agreement Date and payments of continued base salary or wages to employees, and set targets and metrics therefor in the ordinary course of business or in accordance with any Employee Plan;
(k) settle, release, waive or compromise any pending or threatened Legal Proceeding or other claim, except for the settlement of any Legal Proceedings or other claim that is (A) reflected or reserved against in the Audited Company Balance Sheet; (B) for solely monetary payments of no more than $1,000,000 individually and $2,000,000 in the aggregate; or (C) settled in compliance with Section 6.15;
(l) except as required by applicable Law or GAAP, (A) revalue in any material indebtedness respect any of its properties or assets, including writing-off notes or accounts receivable, other than in the ordinary course of business; or (iiiB) assume, guarantee, endorse, xxxxx x xxxx make any change in any of its accounting principles or practices;
(A) make or change any material Tax election; (B) settle or compromise any Tax claim or assessment in respect of material Taxes; (C) request or consent to any extension or waiver of any limitation period with respect to any Tax claim or assessment in respect of material Taxes (other than a Permitted Lien) on any pursuant to customary extensions of the Company’s assets due date to file a Tax Return obtained in the ordinary course of business); (D) file an amended Tax Return that could materially increase the Taxes payable by Parent or the Company Group; (E) surrender any right to claim a material refund of Taxes; (F) fail to pay any income or material Tax that becomes due and payable subject to good faith disputes over Taxes; or (G) enter into a closing agreement with any Governmental Authority regarding any material Tax; or (H) incur any material Taxes outside of the ordinary course of business, other than in connection with the transactions contemplated by this Agreement;
(n) incur or commit to incur any capital expenditure (excluding, for the avoidance of doubt, internal and external capitalized labor costs) other than (1) consistent with the capital expenditure budget set forth in Section 5.2(n) of the Company Disclosure Letter or (2) to the extent that such capital expenditures do not exceed $1,000,000 in the aggregate;
(o) enter into, modify, amend or terminate any (a) Contract (other than any Material Contract) that if so entered into, modified, amended or terminated would have a Company Material Adverse Effect; or (b) Material Contract, except in the ordinary course of business or as security permitted under Section 5.2(j);
(p) maintain insurance at less than current levels or otherwise become liable for indebtedness in a manner inconsistent with past practice in any material respect;
(q) engage in any transaction with, or enter into any agreement, arrangement or understanding with, any Affiliate of another Person (excluding the Company or other Person covered by Item 404 of Regulation S-K promulgated by the SEC that would be required to be disclosed pursuant to Item 404;
(r) effectuate a “plant closing,” “mass layoff” (each as defined in WARN) or other employee layoff event affecting in whole or in part any site of its Subsidiariesemployment, facility, operating unit or employee;
(s) grant any material refunds, credits, rebates or other allowances to any end user, customer, reseller or distributor, in each case other than in the ordinary course of business;
(t) acquire (by merger, consolidation or acquisition of stock or assets) any other Person or any material equity interest therein or enter into any joint venture, legal partnership (excluding, for avoidance of doubt, strategic relationships, alliances, reseller agreements and similar commercial relationships), limited liability corporation or similar arrangement with any third Person, in each case, other than investment in equity securities held in the ordinary course of business for cash management purposes;
(u) enter into any Collective Bargaining Agreement or agreement to form a work council or other Contract with any labor organization or works council (except to the extent required by applicable law);
(v) adopt or implement any stockholder rights plan or similar arrangement, in each case, applicable to the Merger or any other transaction consummated pursuant to Parent’s rights under Section 5.3(e)(i)(2) or Section 5.3(e)(ii)(3); or
(iw) agree, resolveenter into, authorize any of, or agree or commit to enter into a Contract to take any action of the actions prohibited by this Section 5.2. Nothing contained in this Agreement shall give Parent or Merger Sub, directly or indirectly, the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective Time, without limiting or modifying the restrictions set forth in this Section 5.2, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its operations.
Appears in 1 contract
Samples: Merger Agreement (Instructure Inc)
Forbearance Covenants. Except (a) as expressly contemplated by this Agreement, (b) as set forth in Section 5.1 or Section 5.2 of During the Company Disclosure Letter, (c) as required by applicable Law, or (d) as approved in advance in writing by the Purchaser (which approval will not be unreasonably withheld, conditioned or delayed), during the period from the execution and delivery of this Agreement until the earlier to occur of the termination of this Agreement pursuant to Article IX and the ClosingPre-Closing Period, the Company will not, and will not permit any of its Subsidiaries to, directly to (in each case subject to the Covenant Exceptions (other than clause (i) thereto) or indirectly:as expressly contemplated by another provision of this Agreement):
(a) take amend or otherwise change the Charter, the Bylaws or any action set forth in Section 4.1 of the Stockholders Agreementother similar organizational document;
(b) acquire propose or agree to acquireadopt a plan of complete or partial liquidation, directly or indirectly, by purchasedissolution, merger, consolidation consolidation, restructuring, recapitalization or otherwise, equity or assets constituting all or substantially all of the business of (or any division of the business of) another Personother reorganization;
(c) sell, assign, transfer, license, sublicense, abandon, permit to lapse, grant a covenant not to xxx, or otherwise dispose of any material Intellectual Property (other than non-exclusive licenses or sublicenses granted in the ordinary course of business);
(d) (i) authorize for issuance, issue, deliver, sell or transfer deliver, or agree or commit to issue, sell or deliver, any Company Securities (including any Company Equity-Based Awards) (whether through the issuance or granting of options, restricted stock units, warrants, commitments, subscriptions, rights to purchase or otherwise), except, in each case, (i) for the issuance, delivery or sale of (or agreement or commitment to issue, sell or transfer any deliver) shares of capital stock Company Common Stock pursuant to Company Equity-Based Awards outstanding as of the date of this Agreement or other equity interest pursuant to the ESPP, in each case, in accordance with their terms and the terms of this Agreement (including as limited by Section 2.8(f)); (ii) the issuance of Company Securities, cash or convertible security any combination of Company Securities and cash pursuant to the terms of the 2024 Convertible Notes Indenture or 2026 Convertible Notes Indenture as in effect on the date hereof; (iii) the issuance of Company Securities in transactions solely between the Company and any of its Subsidiaries; or (iv) in connection with agreements in effect on the date of this Agreement that are set forth on Section 5.2(c) of the Company Disclosure Letter;
(d) acquire, repurchase or redeem any of its equity securities, except, in each case, (i) pursuant to the terms and conditions of Company Equity-Based Awards outstanding as of the date of this Agreement in accordance with their terms as in effect as of the date of this Agreement; or to otherwise satisfy Tax obligations with respect to awards granted pursuant to Company Equity Plans or to pay the exercise price of Company Options, in each case in accordance with the existing terms of the applicable Company Equity Plan as in effect on the date of this Agreement; (ii) for transactions solely between the Company and any of its Subsidiaries or other rights of any kind to acquire, any shares of capital stock of or any other equity interest in the Company or any of its Subsidiaries, other than (x) the issuance of capital stock or other equity interests pursuant to any Employee Plan or (y) the issuance of capital stock or other equity interests from any wholly owned Subsidiary to the Company or any other wholly owned Subsidiary of the Company, (ii) amend or modify any term or provision of any of the Company’s outstanding equity securities or (iii) accelerate or waive any restrictions pertaining pursuant to the vesting terms of any Company equity-based awards the Capped Call Transactions as in effect on the date hereof;
(e) (i) adjust, split, subdivide, combine or warrants or other rights of any kind to acquire reclassify any shares of capital stock or other equity interests or voting interests; (ii) declare, set aside, establish a record date for, authorize or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any shares of its capital stock or other equity or voting interests, or make any other actual, constructive or deemed distribution in respect of its capital stock or other equity or voting interests, except for cash dividends made by any wholly-owned Subsidiary of the CompanyCompany to the Company or one of its other wholly-owned Subsidiaries; (iii) pledge or encumber any of its capital stock or other equity or voting interests; or (iv) modify the terms of any of its capital stock or other equity or voting interests;
(ef) propose acquire or commit agree to reclassifyacquire (by merger, combineconsolidation or acquisition of stock or assets) any third Person or any material equity interest in such Person, split or subdivide enter into any contractual joint venture or similar arrangement or partnership with any third Person;
(g) sell, lease, license, transfer, assign, exchange or swap, or subject to any lien (other than Permitted Liens), or otherwise dispose of, any portion of its material properties or assets, including the 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, shares of capital stock of the Company or any of its Subsidiaries, except for, with respect to any Subsidiary of the Company, any intercompany restructuring, recapitalization or similar transaction that will not have a Company Material Adverse Effect;
(f) enter into, amend or terminate any Contract with Starboard Value LP or any of its Affiliates;
(g) except as required under applicable Law or the terms of any Employee Plan existing as of the date of this Agreement, (i) increase the compensation or benefits payable to any current or former director or executive officer of the Company or any employee of the Company whose annual base salary is at least $300,000 (in each case, other than annual merit increases with a value of, or for consideration, in excess of $10,000,000 individually or $30,000,000 in the aggregate;
(h) acquire, or agree to acquire, fee ownership (or its jurisdictional equivalent) of any real property;
(i) (i) incur or assume any Indebtedness or issue any debt securities, except, in each case, (A) short-term debt incurred to fund operations of the business in the ordinary course of business; (B) for loans or advances solely between Subsidiaries of the Company or between the Company and its Subsidiaries; or (C) obligations incurred pursuant to business credit cards in the ordinary course of business; (ii) enter into any newassume, or amend any existing, employment, severance, change in control, retention, bonus guarantee, endorse or collective bargaining agreement otherwise become liable or similar agreement responsible (whether directly, contingently or arrangement;
otherwise) for the obligations of any third Person, except with respect to obligations of Subsidiaries of the Company; (iiii) make any loans, advances or capital contributions to, or investments in, any other third Person, except, in each case, for (A) extensions of credit to customers in the ordinary course of business; (B) advances of reimbursable expenses to directors, officers and other than investments by employees, in each case, in the Company ordinary course of business; and (C) for loans or a wholly advances between wholly-owned Subsidiary of the Company to a wholly owned Subsidiary Subsidiaries of the Company or between the Company and its wholly-owned Subsidiaries and capital contributions in or advances of expenses to any director, officer, employee or agent Subsidiaries of the Company; or (iv) mortgage, pledge or otherwise encumber any assets, tangible or intangible, or create any lien thereon (other than Permitted Liens);
(j) except (i) in order to comply with applicable Law, (ii) as required pursuant to the existing terms of any Company in connection with advancement obligations Benefit Plan in effect on the date of this Agreement, (iilisted on Section 3.19(a) incurof the Company Disclosure Letter and made available to Parent, assume or modify any material indebtedness or (iii) assumeas provided in this Agreement, guarantee(A) establish, endorseadopt, xxxxx x xxxx enter into, terminate or amend any material Company Benefit Plan (or any plan, policy, agreement, Contract or arrangement that would be a Company Benefit Plan if in effect on the date of this Agreement), or take any action to accelerate the vesting, payment or funding of any compensation or benefits under, any Company Benefit Plan (or any plan, policy, agreement, Contract or arrangement that would be a Company Benefit Plan if in effect on the date of this Agreement); (B) grant to any Service Provider whose annual cash on target compensation exceeds $300,000 any increase or decrease in cash on target compensation, bonus, incentive or fringe or other benefits; (C) grant to any Service Provider any new or increased change in control, retention, transaction or stay bonus, tax gross-up, special remuneration, equity or equity-based award, bonus or incentive, deal or stay bonus severance or termination pay, or materially amend or modify any such arrangement; (D) enter into, terminate, amend or modify any employment agreement, offer letter, consulting agreement or arrangement, or change in control, retention, transaction or stay bonus, tax gross-up, special remuneration, severance or termination agreement or arrangement with any Service Provider (other than entering into at-will offer letters with newly-hired non-officer employees with total annual cash compensation equal to or less than $300,000 in the ordinary course of business consistent with past practice); or (E) terminate, engage or hire any employee or individual service provider of the Company or any of its Subsidiaries with total annual cash on target compensation in excess of $300,000, other than terminations for cause;
(k) xxxxxx, release, waive or compromise any pending or threatened material Legal Proceeding, except for the settlement of any Legal Proceedings (i) solely for monetary damages in an amount (A) not in excess of $5,000,000 or (B) that does not exceed the amount reflected or reserved against in the Unaudited Company Balance Sheet; or (ii) settled in compliance with Section 6.15;
(l) except as required by applicable Law or GAAP, (i) other than in the ordinary course of business, revalue in any material respect any of its properties or assets, including writing-off notes or accounts receivable; or (ii) make any change in any of its accounting principles or practices;
(i) make or change any material Tax election; (ii) settle or compromise any material Tax claim or assessment; (iii) consent to any extension or waiver of any limitation period with respect to any material Tax claim or assessment (other than in connection with a customary extension of time automatically granted to file a Tax Return of no longer than seven (7) months); (iv) file an amended Tax Return that could materially increase the Taxes payable by Parent or its Affiliates (including, after the Closing, the Company and its Subsidiaries); (v) affirmatively surrender any right to claim a refund of material Taxes; (vi) fail to pay any material Tax that becomes due and payable except to the extent such Tax is contested in good faith; or (vii) enter into a closing agreement with any Governmental Authority regarding any material Tax.
(n) (i) incur, authorize or commit to incur any material capital expenditures other than (A) consistent in all material respects with the capital expenditure budget set forth in Section 5.2(n) of the Company Disclosure Letter; (B) pursuant to obligations imposed by Material Contracts or Leases; or (C) pursuant to agreements in effect prior to the date of this Agreement; (ii) except in the ordinary course of business (x) enter into any Contract which if entered into prior to the date hereof would be a Material Contract or (y) modify or amend any material rights under any Material Contract in a manner that is adverse in any material respect to the Company and its Subsidiaries, taken as a whole, or terminate any Material Contract (other than any Material Contract that has expired in accordance with its terms); (iii) maintain insurance at less than current levels or otherwise in a manner inconsistent with past practice; (iv) engage in any transaction with, or enter into any agreement, arrangement or understanding with, any Affiliate of the Company or other Person covered by Item 404 of Regulation S-K promulgated by the SEC that would be required to be disclosed pursuant to Item 404; (v) effectuate a “plant closing,” “mass layoff” (each as defined in the WARN Act) or other employee layoff event affecting in whole or in part any site of employment, facility, operating unit or employee (vi) grant any material refunds, credits, rebates or other allowances to any end user, customer, reseller or distributor, in each case other than in the ordinary course of business; or (vii) waive, release, grant, encumber or transfer any right of material value to the Company and its Subsidiaries, taken as a whole, other than in the ordinary course of business;
(o) negotiate, modify, extend, terminate or enter into any Labor Agreement, or recognize or certify any labor union, works council or other labor organization as the bargaining representative for any employees of the Company or its Subsidiaries;
(p) waive or release any noncompetition, nonsolicitation, nondisclosure, noninterference, nondisparagement, or other restrictive covenant obligation of any Service Provider;
(q) sell, assign, transfer, lease, license (other than a Permitted Lien), abandon, let lapse, cancel, dispose of, or otherwise subject to any lien or other encumbrance (in each case, other than Permitted Liens) on any material Company Intellectual Property, except for non-exclusive licenses of Intellectual Property entered in the ordinary course of business;
(r) disclose or abandon any material Trade Secrets, except in the ordinary course of business, and to the extent not economically desirable to maintain for the conduct of the Company’s assets as security business of the Company and its Subsidiaries, or otherwise become liable disclose, license, make available, or deliver any source code for indebtedness any Company Software to any Person except to a third-party service provider or other agent obligated in writing to (i) maintain the confidentiality of, and not disclose, such source code; and (ii) use such source code only in the provision of another Person (excluding services to the Company or any of its Subsidiaries;
(s) make any material change to the Company’s or any of its Subsidiaries’ policies or procedures with respect to their Processing of Personal Information, except to remediate any privacy or security issue that the Company or any of its Subsidiaries reasonably believes is material, to comply with applicable Privacy and Data Security Requirements (but with respect to Privacy and Data Security Requirements that consist of contractual obligations, solely those that are in effect during the Pre-Closing Period (provided that any such contractual obligations entered into after the date hereof must be entered into in accordance with the terms of this Agreement and in the ordinary course of business)), or as otherwise directed or required by a Governmental Authority; or
(it) agreeenter into, resolve, authorize or agree or commit to enter into, a Contract to take any action of the actions prohibited by this Section 5.2.
Appears in 1 contract
Samples: Merger Agreement (Everbridge, Inc.)
Forbearance Covenants. Except (a) as expressly contemplated by this Agreement, (bi) as set forth in Section 5.1 or Section 5.2 of the Company Disclosure Letter, ; (c) as required by applicable Law, or (dii) as approved in advance by Parent in writing by the Purchaser (which approval will not be unreasonably withheld, conditioned or delayed); or (iii) as expressly contemplated by the terms of this Agreement or required by applicable law or order, at all times during the period from commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant to Article IX VIII and the ClosingEffective Time, the Company will not, and will not permit any of its Subsidiaries Subsidiaries, to, directly or indirectly:
(a) take amend the Charter, the Bylaws, or any action set forth in Section 4.1 of the Stockholders Agreementother similar organizational document;
(b) acquire propose or agree to acquireadopt a plan of complete or partial liquidation, directly or indirectly, by purchasedissolution, merger, consolidation consolidation, restructuring, recapitalization or otherwise, equity or assets constituting all or substantially all of the business of (or any division of the business of) another Personother reorganization;
(c) issue, sell, assign, transfer, license, sublicense, abandon, permit to lapse, grant a covenant not to xxx, or otherwise dispose of any material Intellectual Property (other than non-exclusive licenses or sublicenses granted in the ordinary course of business);
(d) (i) authorize for issuance, issue, deliver, sell or transfer deliver or agree or commit to issue, deliver, sell or transfer deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities, except for the issuance or sale of shares of Company Common Stock in connection with the exercise or settlement (as applicable) of the Company Equity Awards outstanding as of the date hereof in accordance with their terms as in effect on the date hereof;
(d) directly or indirectly acquire, repurchase or redeem any securities, except for (A) repurchases, withholdings, or cancellations of Company Securities pursuant to the terms and conditions of the Company Equity Awards outstanding as of the date hereof in accordance with their terms as in effect on the date hereof; or (B) transactions between the Company and any of its direct or indirect Subsidiaries;
(e) (A) adjust, split, combine or reclassify any shares of capital stock of stock, or other equity interest issue or convertible security in the Company authorize or any of its Subsidiaries or other rights of any kind to acquire, any shares of capital stock of or any other equity interest in the Company or any of its Subsidiaries, other than (x) propose the issuance of any other Company Securities in respect of, in lieu of or in substitution for, shares of its capital stock or other equity interests pursuant to or voting interest; (B) declare, set aside or pay any Employee Plan or (y) the issuance of capital stock dividend or other equity interests from any wholly owned Subsidiary to the Company distribution (whether in cash, shares or property or any other wholly owned Subsidiary combination thereof) in respect of the Company, (ii) amend or modify any term or provision of any of the Company’s outstanding equity securities or (iii) accelerate or waive any restrictions pertaining to the vesting of any Company equity-based awards or warrants or other rights of any kind to acquire any shares of capital stock or other equity interests or voting interest, or make any other actual, constructive or deemed distribution in the Company;
(e) propose or commit to reclassify, combine, split or subdivide any capital stock respect of the Company or issue or authorize the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of capital stock or other equity or voting interest, except for cash dividends made by any direct or indirect wholly owned Subsidiary of the Company to the Company, or any of its Subsidiaries, except for, with respect to any Subsidiary one of the Company, ’s other wholly owned Subsidiaries; (C) pledge or encumber any intercompany restructuring, recapitalization shares of its capital stock or similar transaction that will not have a Company Material Adverse Effectother equity or voting interest; or (D) modify the terms of any shares of its capital stock or other equity or voting interest;
(f) enter into(A) incur or assume any Indebtedness (including any long-term or short-term debt) or issue any debt securities, amend or terminate any Contract with Starboard Value LP or any of its Affiliates;
except (g1) except as required under applicable Law or the terms of any Employee Plan existing as of the date of this Agreement, (i) increase the compensation or benefits payable to any current or former director or executive officer of the Company or any employee of the Company whose annual base salary is at least $300,000 (in each case, other than annual merit increases for trade payables incurred in the ordinary course of business; (2) obligations incurred pursuant to business credit cards in the ordinary course of business; (3) Indebtedness under the Company Credit Agreement; and (4) intercompany loans or advances between or among the Company and its direct or indirect wholly-owned Subsidiaries; or (iiB) enter into any newassume, or amend any existing, employment, severance, change in control, retention, bonus guarantee, endorse or collective bargaining agreement otherwise become liable or similar agreement responsible (whether directly, contingently or arrangementotherwise) for the obligations of any other Person, except with respect to obligations of any direct or indirect wholly owned Subsidiaries of the Company;
(ig) mortgage or pledge any of its and its Subsidiaries’ assets, tangible or intangible, or create or incur any lien thereupon (other than Permitted Liens), other than in connection with financing transactions permitted by Section 5.2(f) or consented to by Parent;
(h) make any loans, advances or capital contributions to, or investments in, any other Person, except for (1) extensions of credit to customers in the ordinary course of business; (2) advances to directors, officers and other than employees for travel and other business-related expenses, in each case, in the ordinary course of business and in compliance in all material respects with the Company Group’s policies related thereto; and (3) loans, advances or other extensions of credit or capital contributions to, or investments by in, the Company or a wholly any direct or indirect wholly-owned Subsidiary Subsidiaries of the Company;
(i) acquire, lease, license, sell, abandon, transfer, assign, guarantee, or exchange any (x) Company Intellectual Property, or (y) assets in excess of $500,000, and other than (1) the sale, lease or licensing of Company Products or other materials embodying Company Intellectual Property in the ordinary course of business; (2) the acquisition, lease or license of Company Products in the ordinary course of business, (3) the acquisition, assignment or abandonment of immaterial Company Intellectual Property in connection with the exercise of the reasonable business judgment of the Company Group in the ordinary course of business; and (4) any capital expenditures permitted by (or consented to a wholly owned Subsidiary by Parent under) Section 5.2(n);
(j) (A) enter into, adopt, amend (including accelerating the vesting, payment or funding), modify or terminate any Employee Plan or other plan, program, agreement or arrangement that would constitute an Employee Plan if in effect on the date hereof (other than at-will offer letters (or, for jurisdictions outside of the United States, employment agreements that provide for employment periods or rights no greater than required by applicable law) entered into with new hires of employees of the Company Group in the ordinary course of business and whose annual salary is less than $175,000); (B) increase or decrease the compensation of any director, officer, employee, individual consultant, former employee, individual independent contractor, or other individual service provider of the Company Group, pay any special bonus or advances of expenses special remuneration to any director, officer, employee employee, individual consultant, former employee, individual independent contractor, or agent other individual service provider of the Company in connection with advancement obligations Group, or pay any benefit not required by (or accelerate the time of payment or vesting of any payment becoming due under) any Employee Plan as in effect on as of the date hereof, except in the case of this Agreementeach of clauses (A) and (B), as may be required by applicable law or the terms of the applicable Employee Plan in effect as of the date hereof; (C) enter into any change in control, severance or similar agreement or any retention or similar agreement with any officer, employee, director, individual independent contractor, individual consultant, or other individual service provider of the Company Group, or (D) hire, terminate (other than for “cause”), furlough or temporarily lay off any officer, employee, director, individual independent contractor, individual consultant, or other individual service provider of the Company Group, in each case with an annual base salary or wages (or, in the case of non-employee service providers, equivalent compensation) of $175,000 or more;
(k) settle, release, waive or compromise any pending or threatened material Legal Proceeding or other claim, except for the settlement of any Legal Proceedings or other claim that is (A) reflected or reserved against in the Audited Company Balance Sheet; (B) for solely monetary payments of, net of insurance recovery, no more than $250,000 individually and $1,000,000 in the aggregate, and that does not involve any admission of wrongdoing; or (C) settled in compliance with Section 6.15;
(l) except as required by applicable law or GAAP, (A) revalue in any material respect any of its properties or assets, including writing-off notes or accounts receivable, other than in the ordinary course of business; or (B) make any change in any of its accounting principles or practices;
(A) make (except in the ordinary course of business) or change any material Tax election; (B) settle, consent to or compromise any material Tax claim or assessment or surrender a right to a material Tax refund; (C) consent to any extension or waiver of any limitation period with respect to any material Tax claim or assessment (other than an extension of a limitation period arising by operation of law as a result of an automatic extension of time to file any Tax Return obtained in the ordinary course of business); (D) file an amended Tax Return that could materially increase the Taxes payable by the Company or its Subsidiaries; or (E) enter into a closing agreement with any Governmental Authority regarding any material Tax;
(n) incur or commit to incur any capital expenditure(s) other than consistent with the capital expenditure budget set forth in Section 5.2(n) of the Company Disclosure Letter;
(o) enter into, modify, amend or terminate any (i) Contracts (other than any Material Contract) that if so entered into, modified, amended or terminated would, individually or in the aggregate, have a Company Material Adverse Effect; or (ii) incur, assume Material Contract or modify any material indebtedness or (iii) assume, guarantee, endorse, xxxxx x xxxx (other than Contract that would have been a Permitted Lien) on any Material Contract if such Contract was in existence as of the Company’s assets date hereof, except in the ordinary course of business or as security permitted under Section 5.2(c) and Section 5.2(j);
(p) maintain insurance at less than current levels or otherwise become liable for indebtedness in a manner inconsistent with past practice;
(q) engage in any transaction with, or enter into any agreement, arrangement or understanding with, any Affiliate of another Person (excluding the Company or any other Person covered by Item 404 of its Subsidiaries); orRegulation S-K promulgated by the SEC that would be required to be disclosed pursuant to Item 404;
(ir) agreeeffectuate or announce any closing, resolveemployee layoff, authorize furlough, reduction to terms and conditions of employment or commit other event affecting in whole or in part any site of employment, facility, operating unit or employee that would result in liability of the Company Group under WARN; (s) grant any material refunds, credits, rebates or other allowances to take any action prohibited by this Section 5.2.end user, customer, reseller or distributor, in each case other than in the ordinary course of business;
Appears in 1 contract
Samples: Merger Agreement (EngageSmart, Inc.)
Forbearance Covenants. Except (a) as expressly contemplated by this Agreement, (bi) as set forth in Section 5.1 or Section 5.2 of the Company Disclosure Letter, ; (c) as required by applicable Law, or (dii) as approved in advance in writing by the Purchaser Parent I (which approval will not be unreasonably withheld, conditioned or delayed); or (iii) as expressly contemplated by the terms of this Agreement, at all times during the period from commencing with the execution and delivery of this the Original Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant to Article IX VIII and the ClosingCompany Merger Effective Time, the Company Parties will not, and will not permit any of its Subsidiaries Subsidiaries, to, directly or indirectly:
(a) take amend the Charter, the Bylaws, the Holdings LLCA, or any action set forth in Section 4.1 of the Stockholders Agreementother similar organizational document;
(b) acquire propose or agree to acquireadopt a plan of complete or partial liquidation, directly or indirectly, by purchasedissolution, merger, consolidation consolidation, restructuring, recapitalization or otherwise, equity or assets constituting all or substantially all of the business of (or any division of the business of) another Personother reorganization;
(c) issue, sell, assign, transfer, license, sublicense, abandon, permit to lapse, grant a covenant not to xxx, or otherwise dispose of any material Intellectual Property (other than non-exclusive licenses or sublicenses granted in the ordinary course of business);
(d) (i) authorize for issuance, issue, deliver, sell or transfer deliver or agree or commit to issue, deliver, sell or transfer deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities, except (A) for the issuance or sale of shares of Company Common Stock or Holdings Units in connection with the exercise or settlement (as applicable) of Convertible Notes, Company Options, Company PSUs, Company RSUs, Holdings RSUs or Holdings Incentive Units outstanding as of the Capitalization Date in accordance with their terms and pursuant to the ESPP in accordance with its terms (as modified by Section 2.11(g) and Section 2.11(h)); (B) in connection with agreements in effect on December 11, 2020 and made available to the Parent Entities (or the form of such agreement has been made available to the Parent Entities and any such agreement is substantially identical to such form), including the maximum amount of Company Securities to be issued thereunder; or (C) in connection with any Holdings Unit Redemption;
(d) directly or indirectly acquire, repurchase or redeem any securities, except for (A) repurchases, withholdings, or cancellations of Company Securities pursuant to the terms and conditions of the Capped Call Documentation, Company Options, Company RSUs, Company PSUs, Holdings RSUs or Holdings Incentive Units outstanding as of December 11, 2020 in accordance with their terms as of December 11, 2020; (B) transactions between the Company and any of its direct or indirect Subsidiaries; or (C) in connection with any Holdings Unit Redemption;
(e) (A) adjust, split, combine or reclassify any shares of capital stock of stock, or other equity interest issue or convertible security in the Company authorize or any of its Subsidiaries or other rights of any kind to acquire, any shares of capital stock of or any other equity interest in the Company or any of its Subsidiaries, other than (x) propose the issuance of any other Company Securities in respect of, in lieu of or in substitution for, shares of its capital stock or other equity interests pursuant to or voting interest; (B) declare, set aside or pay any Employee Plan or (y) the issuance of capital stock dividend or other equity interests from any wholly owned Subsidiary to the Company distribution (whether in cash, shares or property or any other wholly owned Subsidiary combination thereof) in respect of the Company, (ii) amend or modify any term or provision of any of the Company’s outstanding equity securities or (iii) accelerate or waive any restrictions pertaining to the vesting of any Company equity-based awards or warrants or other rights of any kind to acquire any shares of capital stock or other equity interests or voting interest, or make any other actual, constructive or deemed distribution in the Company;
(e) propose or commit to reclassify, combine, split or subdivide any capital stock respect of the Company 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 any of its Subsidiariesother equity or voting interest, except for, with respect to for cash dividends made by any direct or indirect wholly owned Subsidiary of Holdings to the Company, Holdings, or one of Holdings’ other wholly owned Subsidiaries; (C) pledge or encumber any intercompany restructuring, recapitalization shares of its capital stock or similar transaction that will not have a Company Material Adverse Effectother equity or voting interest; or (D) modify the terms of any shares of its capital stock or other equity or voting interest;
(f) enter into(A) incur or assume any Indebtedness (including any long-term or short-term debt) or issue any debt securities, amend or terminate any Contract with Starboard Value LP or any of its Affiliates;
except (g1) except as required under applicable Law or the terms of any Employee Plan existing as of the date of this Agreement, (i) increase the compensation or benefits payable to any current or former director or executive officer of the Company or any employee of the Company whose annual base salary is at least $300,000 (in each case, other than annual merit increases for trade payables incurred in the ordinary course of business; (2) obligations incurred pursuant to business credit cards in the ordinary course of business; and (3) intercompany loans or advances between or among Holdings, the Company and/or Holdings’ direct or indirect wholly-owned Subsidiaries; or (iiB) enter into any newassume, or amend any existing, employment, severance, change in control, retention, bonus guarantee, endorse or collective bargaining agreement otherwise become liable or similar agreement responsible (whether directly, contingently or arrangementotherwise) for the obligations of any other Person, except with respect to obligations of Holdings or any direct or indirect wholly owned Subsidiaries of Holdings;
(ig) mortgage or pledge any of its and its Subsidiaries’ assets, tangible or intangible, or create or incur any lien thereupon (other than Permitted Liens), other than in connection with financing transactions permitted by Section 5.2(f) or consented to by Parent I;
(h) make any loans, advances or capital contributions to, or investments in, any other Person, except for (1) extensions of credit to customers in the ordinary course of business; (2) advances to directors, officers and other employees for travel and other business-related expenses, in each case in the ordinary course of business and in compliance in all material respects with the Company Group’s policies related thereto; and (3) loans, advances or capital contributions to, or investments in, Holdings or any direct or indirect wholly-owned Subsidiaries of Holdings;
(i) acquire, lease, license, sell, abandon, transfer, assign, guarantee, or exchange any assets, tangible or intangible (including any Company Intellectual Property), in each case in excess of $250,000 individually, and other than investments by (1) the Company sale, lease or a wholly owned Subsidiary licensing of products or services of the Company to a wholly owned Subsidiary Group or other materials embodying Company Intellectual Property in the ordinary course of business; (2) the acquisition, assignment or abandonment of immaterial Company Intellectual Property in connection with the exercise of the reasonable business judgment of the Company or Group in the ordinary course of business; (3) the abandonment of trade secrets in the ordinary course of business and to the extent not economically desirable to maintain for the conduct of the business of the Company Group; and (4) any capital expenditures permitted by (or advances consented to by Parent I under) Section 5.2(n);
(j) (A) enter into, adopt, amend (including accelerating the vesting, payment or funding), modify or terminate any bonus, profit sharing, compensation, severance, termination, option, appreciation right, performance unit, phantom equity, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, severance or other Employee Plan or employee benefit agreement, trust, plan, fund or other arrangement for the compensation, benefit or welfare of expenses any director, officer or employee of the Company Group in any manner (other than at-will offer letters (or, for jurisdictions outside of the United States, employment agreements that provide for employment periods or rights no greater than required by applicable law) entered into with new hires of employees of the Company Group in the ordinary course of business and consistent with past practice and whose annual salary is less than $200,000); (B) increase or decrease the compensation of any director, officer, employee, individual consultant, former employee, individual independent contractor, or other individual service provider of the Company Group, pay any special bonus or special remuneration to any director, officer, employee employee, individual consultant, former employee, individual independent contractor, or agent other individual service provider of the Company in connection with advancement obligations Group, or pay any benefit not required by (or accelerate the time of payment or vesting of any payment becoming due under) any Employee Plan as in effect on as of December 11, 2020, except in the date case of this Agreementeach of (A) and (B), (ii1) incuras may be required by applicable law or the terms of the applicable Employee Plan in effect as of December 11, assume or modify any material indebtedness 2020; or (iii2) assumefor increases in base salary for employees of the Company Group below the level of vice president and whose annual salary is less than $200,000 in the ordinary course of business and consistent with past practice (it being understood that these exceptions in the foregoing clauses (1) and (2) will not apply to any actions otherwise prohibited by Section 5.2(c) or the following sub-clause (C)); (C) enter into any change in control, guaranteeseverance or similar agreement or any retention or similar agreement with any officer, endorseemployee, xxxxx x xxxx director, individual independent contractor, individual consultant, or other individual service provider of the Company Group, or (D) hire, terminate (other than for “cause”), furlough or temporarily lay off any officer, employee, director, individual independent contractor, individual consultant, or other individual service provider of the Company Group with an annual base salary or wages (or, in the case of non-employee service providers, equivalent compensation) of $200,000 or more.
(k) settle, release, waive or compromise any pending or threatened material Legal Proceeding or other claim, except for the settlement of any Legal Proceedings or other claim that is (A) reflected or reserved against in the Audited Company Balance Sheet; (B) for solely monetary payments of no more than $200,000 individually and $500,000 in the aggregate; or (C) settled in compliance with Section 6.15;
(l) except as required by applicable law or GAAP, (A) revalue in any material respect any of its properties or assets, including writing-off notes or accounts receivable, other than in the ordinary course of business; or (B) make any change in any of its accounting principles or practices;
(m) except in the ordinary course of business, (A) make or change any material Tax election; (B) settle, consent to or compromise any material Tax claim or assessment or surrender a Permitted Lienright to a material Tax refund; (C) on consent to any extension or waiver of any limitation period with respect to any material Tax claim or assessment; (D) file an amended Tax Return that could materially increase the Taxes payable by the Company or its Subsidiaries; or (E) enter into a closing agreement with any Governmental Authority regarding any material Tax;
(n) incur or commit to incur any capital expenditure(s) other than (1) consistent with the capital expenditure budget set forth in Section 5.2(n) of the Company Disclosure Letter or (2) to the extent that such capital expenditures do not exceed $1,000,000 individually or $5,000,000 in the aggregate;
(o) enter into, modify, amend or terminate any (a) Contracts (other than any Material Contract) that if so entered into, modified, amended or terminated would, individually or in the aggregate, have a Company Material Adverse Effect; or (b) Material Contract or any Contract that would have been a Material Contract if such Contract was in existence as of December 11, 2020, except in the ordinary course of business or as permitted under Section 5.2(c) and Section 5.2(j);
(p) maintain insurance at less than current levels or otherwise in a manner inconsistent with past practice;
(q) engage in any transaction with, or enter into any agreement, arrangement or understanding with, any Affiliate of the Company or other Person covered by Item 404 of Regulation S-K promulgated by the SEC that would be required to be disclosed pursuant to Item 404;
(r) effectuate or announce any closing, employee layoff, furlough, reduction to terms and conditions of employment or other event affecting in whole or in part any site of employment, facility, operating unit or employee that would result in liability of the Company Group under WARN;
(s) grant any material refunds, credits, rebates or other allowances to any end user, customer, reseller or distributor, in each case other than in the ordinary course of business;
(t) acquire (by merger, consolidation or acquisition of stock or assets) any other Person or any material portion thereof or material equity interest therein or enter into any Contract that involves a joint venture entity, limited liability company or legal partnership (excluding, for avoidance of doubt, reseller agreements and other commercial agreements that do not involve the formation of an entity with any third Person);
(u) (A) enter into any Collective Bargaining Agreement or agreement or arrangement to form a works council or other Contract with any labor union or other labor organization or works council, except to the extent required by applicable law; provided that the Company Parties or their applicable Subsidiaries must first provide Parent I and its counsel reasonable advance notice thereof and a reasonable opportunity to review and comment thereon, and the Company Parties and such Subsidiaries will give due consideration to all reasonable additions, deletions, changes or other recommendations suggested thereto by Parent I or its counsel; or (B) recognize or certify any labor union, works council or other labor organization, or group of employees, as the bargaining representative for any employees of the Company Group, except as required by applicable law;
(v) waive or release any noncompetition, nonsolicitation, nondisclosure, noninterference, nondisparagement, or other restrictive covenant obligation of any current or former employee or independent contractor;
(w) adopt or implement any stockholder rights plan or similar arrangement, in each case, applicable to the Mergers or any other transaction consummated pursuant to the Parent Entities’ rights under Section 5.3(d)(i)(2) or Section 5.3(d)(ii)(3);
(x) enter into, authorize any of, or agree or commit to enter into a Contract to take any of the Company’s assets as security or otherwise become liable for indebtedness of another Person (excluding the Company or any of its Subsidiaries); or
(i) agree, resolve, authorize or commit to take any action actions prohibited by this Section 5.2.
Appears in 1 contract
Forbearance Covenants. Except (aw) as expressly contemplated or required by this Agreement, (bx) as set forth in Section 5.1 or Section 5.2 4.2 of the Company Disclosure LetterSchedule, (c) as required by applicable Law, or (dy) as approved in advance in writing by the Purchaser Parent (which approval will not be unreasonably withheld, conditioned delayed or delayedconditioned), or (z) as required by law, at all times during the period from commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant to Article IX VII and the ClosingEffective Time, the Company will not, shall not do any of the following and will shall not permit any of its Subsidiaries to, directly or indirectlyto do any of the following:
(a) take any action set forth in Section 4.1 amend its certificate of the Stockholders Agreementincorporation or bylaws or comparable organizational documents;
(b) acquire propose or agree to acquireadopt a plan of complete or partial liquidation, directly or indirectly, by purchasedissolution, merger, consolidation or otherwiseconsolidation, equity or assets constituting all or substantially all of the business of (or any division of the business of) another Person;
(c) sellrestructuring, assign, transfer, license, sublicense, abandon, permit to lapse, grant a covenant not to xxx, or otherwise dispose of any material Intellectual Property (other than non-exclusive licenses or sublicenses granted in the ordinary course of business);
(d) (i) authorize for issuance, issue, deliver, sell or transfer or agree or commit to issue, deliver, sell or transfer any shares of capital stock of recapitalization or other equity interest or convertible security in reorganization of the Company or any of its Subsidiaries operating Subsidiaries;
(c) issue, grant, sell, deliver or other rights of any kind agree or authorize, propose or commit to acquireissue, any shares of capital stock of grant, sell or any other equity interest in the Company or any of its Subsidiaries, other than deliver (x) whether through the issuance or granting of capital stock options, warrants, commitments, subscriptions, rights to purchase or other equity interests pursuant to any Employee Plan or (yotherwise) the issuance of capital stock or other equity interests from any wholly owned Subsidiary to the Company or any other wholly owned Subsidiary of the Company, (ii) amend or modify any term or provision of any of the Company’s outstanding equity securities or (iii) accelerate or waive any restrictions pertaining to the vesting of any Company equity-based awards Securities or warrants or other rights of any kind to acquire any shares of capital stock or other equity interests securities in any Subsidiary of the Company, except for the issuance of shares of Company Common Stock pursuant to the vesting and terms of Company RSU Awards outstanding prior to the date hereof and the issuance and sale of shares of Company Common Stock pursuant to the exercise (in accordance with their terms) of Company Options outstanding prior to the date hereof;
(d) directly or indirectly acquire, repurchase or redeem any Company Securities or any shares of capital stock or other securities of any Subsidiary of the Company (other than the withholding of shares of Company Common Stock in connection with the vesting in accordance with their terms of Company RSU Awards or Company Options outstanding as of the date of this Agreement), except that the Company may redeem shares of Company Common Stock as permitted by Section 11.3 (Redemption of Excess Stock) of the Certificate of Incorporation only at a Redemption Price (as defined in the CompanyCertificate of Incorporation) that is less than or equal to the Per Share Price; provided that, with respect to any such redemption, all applicable withholding Tax laws are complied with;
(e) propose or commit to reclassify(i) adjust, split, combine, split subdivide or subdivide reclassify any shares of capital stock of the Company or other securities, or issue or authorize or propose the issuance of any other securities in respect of, in lieu of, of or in substitution for, shares of its capital stock or other securities; (ii) declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any shares of capital stock or other securities, or make any other actual, constructive or deemed distribution in respect of the shares of capital stock or other securities, except for cash dividends made by any direct or indirect wholly owned Subsidiary of the Company to the Company or one of its Subsidiaries; (iii) pledge or encumber any shares of its capital stock or any of its Subsidiaries, except for, with respect to other securities; or (iv) modify the terms of any Subsidiary shares of the Company, its capital stock or any intercompany restructuring, recapitalization or similar transaction that will not have a Company Material Adverse Effectof its other securities;
(f) enter into, amend or terminate any Contract with Starboard Value LP or any of its Affiliates;
(g) except as required under applicable Law or the terms of any Employee Plan existing as of the date of this Agreement, (i) increase the compensation incur, create, assume or benefits payable to any current or former director or executive officer of the Company or any employee of the Company whose annual base salary is at least $300,000 (in each caseotherwise become liable for Indebtedness, other than annual merit increases in the ordinary course of businessbusiness consistent with past practice (A) under the Company’s existing credit facility or (B) with respect to letters of credit or capital leases that do not exceed one million dollars ($1,000,000), individually, or two million five hundred thousand dollars ($2,500,000), in the aggregate; (ii) enter into any newassume, or amend any existing, employment, severance, change in control, retention, bonus guarantee, endorse or collective bargaining agreement otherwise become liable or similar agreement responsible (whether directly, contingently or arrangement;
otherwise) for the obligations of any other Person, except with respect to obligations of direct or indirect wholly owned Subsidiaries of the Company; (iiii) make any loans, advances or capital contributions to, to or investments in, in any other Person, other than investments by except for expense and travel advances in the Company or a wholly owned Subsidiary ordinary course of the Company business consistent with past practice to a wholly owned Subsidiary employees of the Company or any of its Subsidiaries; or (iv) sell, license, mortgage, lease, transfer, encumber or pledge any of its or its Subsidiaries’ assets, tangible or intangible, or create or suffer to exist any Lien thereupon (other than Permitted Liens), except (solely in the case of this clause (iv)) (x) as set forth on Section 4.2(f) of the Company Disclosure Schedule, (y) sales and leases by Jeffboat of barges and other equipment manufactured by Jeffboat to third parties or advances to the Company and its Subsidiaries, in each case, in the ordinary course of expenses business consistent with past practice and (z) with respect to assets other than Vessels (which are addressed in clauses (x) and (y) above and not subject to this clause (z)), sales of inventory and obsolete assets in the ordinary course of business consistent with past practice;
(g) (i) enter into, adopt, create, amend (including acceleration of vesting), modify or terminate any bonus, profit sharing, compensation, severance, termination, option, appreciation right, performance unit, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, severance or other employee benefit agreement, trust, plan, fund or other arrangement for the compensation, benefit or welfare of any director, officer or employee in any manner, except in any such case (A) as may be required by applicable Law or (B) to any non-officer employee in the ordinary course of business consistent with past practice; or (ii) increase the compensation of any director, officer or employee, grant, provide, or pay any special bonus or special remuneration to any director, officerofficer or employee, or grant, provide or pay any benefit not required by any plan or arrangement as in effect as of the date hereof, except in any such case (A) as may be required by applicable Law or (B) to any new non-officer employee hires in the ordinary course of business consistent with past practice;
(h) (i) incur or agent commit to incur any capital expenditures, or any obligations or liabilities in connection therewith that individually or in the aggregate, are in excess of five hundred thousand dollars ($500,000), except (A) as otherwise included in the Company’s capital expenditure budget set forth in Section 2.31 of the Company Disclosure Schedule or (B) in connection respect of the ordinary course maintenance, repair or reasonably necessary replacement (other than replacement of Vessels) of assets or properties of the Company or any of its Subsidiaries (consistent with advancement obligations past practices of the Company and its Subsidiaries); (ii) except as set forth in Section 4.2(i) below, pay, discharge, settle or satisfy any liabilities, other than the payment, discharge or satisfaction of liabilities in the ordinary course of business, consistent with past practice, as required by any applicable Law, as accrued for in the Audited Company Balance Sheet or as required by the terms of any Contract of the Company or its Subsidiaries, as in effect on the date of this Agreement or entered into in compliance with the terms of this Agreement; (iii) enter into, modify, amend or terminate (x) any Contract which if so entered into, modified, amended or terminated could be reasonably likely to have, individually or in the aggregate, a Company Material Adverse Effect or (y) any Material Contract (or any Contract that, if in existence on the date of this Agreement, would be a Material Contract); provided that, solely in the ordinary course of business consistent with past practice, the Company and its Subsidiaries may enter into and make amendments to any Contract that is, or, if in existence on the date of this Agreement, would be, a Material Contract solely as a result of clauses (D), (O), (P) or (Q) of Section 2.13(a); or (iv) engage in any transaction with, or enter into any agreement, arrangement or understanding with any Affiliate of the Company or other Person covered by Item 404 of Regulation S-K promulgated under the Exchange Act that would be required to be disclosed under such Item 404 other than those in existence on the date of this Agreement;
(i) settle or compromise (i) any pending or threatened material Legal Proceeding by securities holders against the Company, any of its Subsidiaries or any of their respective directors or officers that relates to the Merger or other transactions contemplated hereby or (ii) incurany other Legal Proceeding, assume in each case, having a value or modify in an amount not covered by insurance in excess of two hundred fifty thousand dollars ($250,000);
(j) except as may be required by GAAP (including as a result of any change in GAAP), make any change in any of the accounting methods, principles or practices used by it;
(i) adopt or change a material Tax accounting method, principle or practice; (ii) make or change any material indebtedness or Tax election; (iii) assumesettle or compromise any material U.S. federal, guaranteestate, endorselocal or non-U.S. income Tax liability or claim for Tax refund; (iv) fail to file any material Tax Return when due or fail to cause such Tax Returns when filed to be complete and accurate in all material respects; (v) file any material amended Tax Return; (vi) consent to any extension or waiver of any limitation period with respect to any claim or assessment for material Taxes; (vii) enter into a material private letter ruling, xxxxx x xxxx closing agreement or similar ruling or agreement with the IRS or any other taxing authority; or (viii) intentionally fail to file a claim for a material Tax refund within the applicable statute of limitations for filing such claim.
(l) acquire (by merger, consolidation or acquisition of stock or assets or otherwise) any other Person or business or (outside the ordinary course of business consistent with past practice) assets or any material equity interest therein, in each case in excess of $2,500,000 (two million five hundred thousand dollars);
(m) fail to use commercially reasonable efforts to maintain in full force and effect material insurance policies covering the Company and its Subsidiaries and their respective properties, assets and businesses in a form and amount consistent with past practices;
(n) (i) implement or effect any material reduction in labor force, lay-off, early retirement program, severance program or other program or effort concerning the termination of employment of a material number of employees of the Company other than a Permitted Lienroutine employee terminations or (ii) on announce any of the Company’s assets as security or otherwise become liable for indebtedness of another Person (excluding foregoing actions by the Company or any of its Subsidiaries); or
(io) agreeauthorize, resolve, authorize or agree or commit to take take, any action prohibited by of the actions described in this Section 5.24.2. The parties hereto acknowledge and hereby agree that the restrictions set forth in this Section 4.2 are not intended to give Parent or Merger Sub, directly or indirectly, the right to control or direct the business or operations of the Company or its Subsidiaries at any time prior to the Effective Time, and notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent or Merger Sub will be required with respect to any matter set forth in this Agreement to the extent the requirement of such consent would violate any applicable Law. Prior to the Effective Time, the Company and its Subsidiaries shall exercise (consistent with and subject to the terms, conditions and restrictions of this Agreement) control and supervision over their own business and operations.
Appears in 1 contract
Forbearance Covenants. Except (ai) as expressly contemplated by this Agreement, (bii) as set forth in Section 5.1 or Section 5.2 of the Company Disclosure Letter, (ciii) as required by applicable Law, Law or (div) to the extent constituting Cybersecurity Measures (following, to the extent practicable, reasonable prior consultation with Parent), provided that such Cybersecurity Measures shall not involve any payments to third parties or similar expenditures outside the ordinary course of business without the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed) or (v) as approved in advance by Parent in writing by the Purchaser (which approval will shall not be unreasonably withheld, conditioned or delayed), during the period from the execution and delivery of this Agreement until the earlier to occur of the termination of this Agreement pursuant to Article IX VIII and the ClosingEffective Time, the Company will shall not, and will shall not permit any of its Subsidiaries toSubsidiaries, to (whether directly or indirectly:indirectly and whether by merger, consolidation, division, conversion, operation of law or otherwise):
(a) take any action set forth in Section 4.1 amend or repeal the Organizational Documents of the Stockholders AgreementCompany or any of its Subsidiaries, or adopt any such new Organizational Documents or provision thereof (other than immaterial changes to the Organizational Documents of any of its Subsidiaries);
(b) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, conversion, division, restructuring, recapitalization or other reorganization;
(c) issue, sell, deliver or agree or commit to issue, sell or deliver any Company Securities, except (i) as required under the terms of any outstanding 401(k) plan or award agreements under the Company Stock Plans in accordance with their existing terms, (ii) issuances of shares of Company Common Stock in respect of any settlement of Company RSUs, Company Restricted Shares or Company PSUs outstanding on the date hereof or as may be granted after the date hereof as permitted under Section 5.2(c) of the Company Disclosure Letter, (iii) sales or issuances of shares of Company Common Stock pursuant to the Company ESPP in accordance with its terms and Section 2.8(f) of this Agreement or (iv) the issuance of Company Securities pursuant to the terms of the Company Convertible Notes Indentures, as in effect on the date hereof;
(d) except for transactions solely among the Company and its Subsidiaries or solely among the Subsidiaries of the Company, reclassify, split, combine, subdivide or redeem, repurchase, purchase or otherwise acquire or agree to acquireamend the terms of, directly or indirectly, any Company Common Stock, other than (i) the acquisition by purchasethe Company of Company RSUs, Company Restricted Shares or Company PSUs in connection with the forfeiture of such awards, in each case in accordance with their existing terms or as in effect on the date of this Agreement or (ii) the withholding of shares of Company Common Stock to satisfy Tax obligations incurred in connection with the vesting or settlement of any Company RSUs, Company Restricted Shares or Company PSUs in accordance with their existing terms as in effect on the date of this Agreement;
(e) (i) declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any shares of capital stock or other equity or voting interest, except for cash dividends made by any direct or indirect wholly-owned Subsidiary of the Company to the Company or one of its other wholly-owned Subsidiaries, (ii) modify the terms of any shares of its capital stock or other equity or voting interest; or (iii) pledge or encumber any shares of its capital stock or other equity or voting interest;
(f) incur, assume, endorse, guarantee, or otherwise become liable for any Indebtedness, except (i) borrowings in the ordinary course of business under the Company’s credit facilities as in effect on the date hereof (including the Company Credit Agreement) or under facilities that replace, renew, extend, refinance or refund such existing credit facilities (including indebtedness incurred to repay or refinance related fees and expenses); it being understood that Parent will be entitled to consent to any such new facility in accordance with Section 5.2(o) if such existing facility to which it relates constitutes a Material Contract hereunder, (ii) guarantees or credit support provided by the Company or any of its Subsidiaries of the obligations of the Company or any of its Subsidiaries to the extent such indebtedness is in existence on the date of this Agreement or incurred in compliance with this Section 5.2(f), (iii) performance bonds and surety bonds entered into in the ordinary course of business, (iv) any indebtedness among the Company and its wholly owned Subsidiaries or among the Company’s wholly owned Subsidiaries and (v) any additional indebtedness for borrowed money in an amount not to exceed $10,000,000 in the aggregate at any time incurred by the Company or any of its Subsidiaries other than in accordance with clauses (i) through (iv);
(g) (i) enter into, adopt, amend or modify in any material respect, or terminate any material Employee Plan; (ii) increase the annual base salary or wages, bonuses or other incentive compensation payable, or to become payable to, any director, officer, employee or individual service provider of the Company or any of its Subsidiaries; (iii) grant any material severance or termination pay to any director, officer or employee, except, in the case of each of clauses (i), (ii) and (iii), (A) with respect to employees whose annual base compensation is less than $225,000, made in the ordinary course of business and consistent with past practice; (B) to the extent required by applicable Law or required under any Employee Plan in effect on the date of this Agreement and set forth on Section 3.18(a) of the Company Disclosure Letter; or (C) in conjunction with new hires, promotions and changes in job position or status of any current employee whose annual base compensation is less (or upon hire would be expected to be less) than $225,000, made in the ordinary course of business and consistent with past practice; (iv) hire or terminate (other than for cause) the employment or services of any employee, director, officer or individual service provider who has (or upon hire would be expected to have) an annual base compensation of $225,000 or above; (v) take any action to accelerate the vesting or payment or lapsing of restrictions, or fund or in any other way secure the payment, of compensation or benefits under any Employee Plan; (vi) make any grants under the Company Stock Plans; or (vii) grant to any current or former employee, director, officer or individual service provider of the Company or any of its Subsidiaries any right to reimbursement, indemnification or payment for any Taxes incurred under Section 409A or Section 4999 of the Code;
(h) enter into any CBA or recognize or certify any labor union, works council or other labor organization as the bargaining representative for any employees of the Company or its Subsidiaries;
(i) effectuate or announce any plant closing, mass layoff, furlough or other event which would trigger the notice requirements of the United States Worker Adjustment and Retraining Notification Act and any similar Law;
(j) settle, release, waive or compromise any pending or threatened Legal Proceeding for an amount in excess of $1,000,000 other than (i) any settlement where the amount paid or to be paid by the Company or any of its Subsidiaries is covered by insurance coverage maintained by the Company or any of its Subsidiaries and (ii) settlements of any Legal Proceedings for an amount not in excess of the amount, if any, reflected or reserved in the balance sheet (or the notes thereto) of the Company;
(k) materially change the Company’s or its Subsidiaries’ methods, principles or practices of financial accounting or annual accounting period, except as required by GAAP, Regulation S-X of the Exchange Act (or any interpretation thereof), or by any Governmental Authority or applicable Law;
(l) materially adversely change any of the Company’s or its Subsidiaries’ privacy policies or the security or operation of any Company IT Assets, except as required by applicable Law;
(i) make, change, or revoke any material Tax election, adopt, change, or revoke any material Tax accounting method or period, settle or compromise any material Tax claim or assessment; (ii) consent to any extension or waiver of any limitation period with respect to any material Tax claim or assessment; (iii) file an amended Tax Return that could reasonably be expected to materially increase the Taxes payable by the Company or its Subsidiaries; (iv) surrender any right to claim a material refund of Taxes; (v) request or enter into any ruling with a Governmental Authority with respect to Taxes; or (vi) enter into a closing agreement with any Governmental Authority regarding any material amount of Tax;
(n) incur or commit to incur any capital expenditures in excess of $5,500,000 in the aggregate other than amounts consistent with the capital expenditure budget for fiscal year 2024 set forth in Section 5.2(n) of the Company Disclosure Letter;
(o) enter into, modify in any material respect, amend in any material respect or terminate (other than any Material Contract that has expired in accordance with its terms) any Material Contract except, in each case, in the ordinary course of business; provided that any Material Contract (i) described by the definition set forth in Section 1.1(ooo)(ii) shall be exclusively governed by Section 5.2(p) and (ii) described by the definition set forth in Section 1.1(ooo)(xiv) shall be exclusively governed by Section 5.2(f);
(p) acquire any division, assets, properties, businesses or equity securities (or otherwise make any investment) in any Person (including by merger, consolidation or otherwiseacquisition of stock or assets) for consideration in excess of $10,000,000 in the aggregate, equity other than (i) in or assets constituting all or substantially all from any wholly-owned Subsidiary of the business Company, or (ii) assets in the ordinary course of (or any division of the business of) another Personbusiness;
(cq) sell, assign, transfer, license, sublicense, abandon, permit allow to lapse, grant a covenant not to xxx, abandon or otherwise dispose of any material of the Company’s or its Subsidiaries’ assets, rights or properties (including Company Intellectual Property (Property), other than (i) non-exclusive licenses or sublicenses of Intellectual Property granted in the ordinary course of business);
(d) (i) authorize for issuance, issue, deliver, sell business or transfer or agree or commit to issue, deliver, sell or transfer any shares expirations of capital stock of or other equity interest or convertible security Company Registered Intellectual Property in the Company or any of accordance with its Subsidiaries or other rights of any kind to acquire, any shares of capital stock of or any other equity interest in the Company or any of its Subsidiaries, other than (x) the issuance of capital stock or other equity interests pursuant to any Employee Plan or (y) the issuance of capital stock or other equity interests from any wholly owned Subsidiary to the Company or any other wholly owned Subsidiary of the Companystatutory terms, (ii) amend sales of assets, rights or modify any term properties or provision dispositions of any of the Company’s outstanding equity securities or (iii) accelerate or waive any restrictions pertaining to the vesting of any Company equity-based awards or warrants or other rights of any kind to acquire any shares of capital stock or other equity interests in the Company;
(e) propose or commit to reclassify, combine, split or subdivide 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, shares of capital stock of the Company or any of its Subsidiaries, except for, with respect to any Subsidiary of the Company, any intercompany restructuring, recapitalization or similar transaction that will not have a Company Material Adverse Effect;
(f) enter into, amend or terminate any Contract with Starboard Value LP or any of its Affiliates;
(g) except as required under applicable Law or the terms of any Employee Plan existing as of the date of this Agreement, (i) increase the compensation or benefits payable to any current or former director or executive officer of the Company or any employee of the Company whose annual base salary is at least $300,000 (in each case, other than annual merit increases assets in the ordinary course of business) business or (iiiii) sales, assignments, transfers or other dispositions that do not have a purchase price that exceeds $1,500,000 individually or $3,000,000 in the aggregate or (iv) solely between the Company and its wholly-owned Subsidiaries or solely between the Company’s wholly-owned Subsidiaries;
(r) engage in any transaction with, or enter into any agreement, arrangement or understanding with, any Affiliate of the Company or other Person covered by Item 404 of Regulation S-K promulgated by the SEC that would be required to be disclosed pursuant to Item 404;
(s) (A) purchase any real property; (B) enter into any newnew lease agreement with respect to real property that is not leased by the Company or one of its Subsidiaries as of the date hereof and that provides for annual rental payments by the Company or one of its Subsidiaries exceeding $500,000 individually or $1,000,000 in the aggregate; or (C) with respect to any Real Property Lease in effect on the date hereof, (1) amend or amend modify the terms thereof in any existingmaterial respect or (2) extend the term thereof, employmentas in effect on the date hereof, severanceother than extensions on market terms if, change and to the extent, the failure to so extend would result in control, retention, bonus guarantee, or collective bargaining agreement or similar agreement or arrangementthe expiration of the term of such Real Property Lease;
(it) make any loans, advances or capital contributions to, or investments in, any other Person, other than investments by except for (i) extensions of credit to customers in the Company or a wholly owned Subsidiary ordinary course of the Company to a wholly owned Subsidiary of the Company or the Company or advances of expenses to any director, officer, employee or agent of the Company in connection with advancement obligations in effect on the date of this Agreementbusiness, (ii) incuradvances to directors, assume officers and other employees for travel and other business-related expenses, in each case in the ordinary course of business and in compliance in all material respects with the Company’s or modify any material indebtedness or its Subsidiaries’ policies related thereto, (iii) assumeloans, guaranteeadvances or capital contributions to, endorseany direct or indirect wholly owned Subsidiaries of the Company, xxxxx x xxxx (other than a Permitted Lieniv) on any advances to directors and officers in accordance with the indemnification provisions of the Company’s assets as security or its Subsidiaries’ respective Organizational Documents and (v) if not otherwise become liable for indebtedness covered by clauses (i), (ii), (iii), or (iv) in amounts less than $250,000 in the aggregate outstanding at any given time;
(u) take any action that would result in a change to the conversion rate of another Person (excluding the Company or Convertible Notes from the rate set forth in Section 3.7(b), other than any change as a result of its Subsidiaries)the Transactions; or
(iv) agree, resolve, authorize resolve or commit to take any action of the actions prohibited by this Section 5.2.
Appears in 1 contract
Samples: Merger Agreement (Perficient Inc)
Forbearance Covenants. Except (a) as expressly contemplated by this Agreement, (b) as set forth in Section 5.1 or Section 5.2 of the Company Disclosure Letter, (c) as required by applicable Law, Law or (d) as approved in advance by Parent in writing by the Purchaser (which approval will shall not be unreasonably withheld, conditioned or delayed), during the period from the execution and delivery of this Agreement until the earlier to occur of the termination of this Agreement pursuant to Article IX VIII and the ClosingEffective Time, the Company will shall not, and will shall not permit any of its Subsidiaries Subsidiaries, to, directly or indirectly:
(a) take any action set forth in Section 4.1 amend the Organizational Documents of the Stockholders AgreementCompany or amend in any material respect the Organizational Documents of any Subsidiaries of the Company;
(b) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization;
(c) (i) issue, sell, deliver or agree or commit to issue, sell or deliver any Company Securities, except as required by the terms of any employment agreements or arrangements set forth on Section 5.2(c)(i) of the Company Disclosure Letter or any award agreements under the Company Stock Plans or otherwise with respect to, and upon the vesting, exercise or settlement of, Company RSUs, in each case, in effect on the date of this Agreement or granted after the date of this Agreement in compliance with this Agreement; or (ii) as contemplated by Section 5.2(g) or Section 6.11;
(d) except for transactions solely among the Company and its Subsidiaries or solely among the Subsidiaries of the Company, reclassify, split, combine, subdivide or redeem, repurchase, purchase or otherwise acquire or agree to acquireamend the terms of, directly or indirectly, any of its capital stock or other equity or voting interest, other than the withholding of shares of Company Common Stock to satisfy Tax obligations incurred in connection with the vesting and settlement of Company RSUs, and the acquisition by purchasethe Company of Company RSUs in connection with the forfeiture of such awards, in each case in accordance with their terms;
(e) (i) adjust, split, combine or reclassify any shares of capital stock, or issue or authorize or propose the issuance of any other Company Securities in respect of, in lieu of or in substitution for, shares of its capital stock or other equity or voting interest; (ii) declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any shares of capital stock or other equity or voting interest, except for cash dividends made by any direct or indirect wholly owned Subsidiary of the Company to the Company or one of its other wholly owned Subsidiaries; (iii) modify the terms of any shares of its capital stock or other equity or voting interest; or (iv) pledge or encumber any shares of its capital stock or other equity or voting interest;
(f) (i) incur, assume, endorse, guarantee, or otherwise become liable for any indebtedness for borrowed money, except (A) guarantees or credit support provided by the Company or any of its Subsidiaries of the obligations of the Company or any of its Subsidiaries to the extent such indebtedness is in existence on the date of this Agreement or incurred in compliance with this Section 5.2(f), (B) performance bonds and surety bonds entered into in the ordinary course of business,(C) any indebtedness among the Company and its Subsidiaries or among the Company’s Subsidiaries and (D) any additional Indebtedness for borrowed money in an amount not to exceed $350,000 in the aggregate at any time incurred by the Company or any of its Subsidiaries other than in accordance with clauses (A) through (C);
(g) (i) enter into, adopt, amend or modify (including accelerating the vesting or payment), or terminate any Employee Plan or make or grant any award under any Employee Plan (including any equity, bonus, or incentive compensation) other than payment of 2023 annual bonuses in the ordinary course of business, consistent with past practice; (ii) increase the compensation of any director, officer or employee or other individual independent contractor of the Company; or (iii) hire or terminate (other than for “cause”) any employee or other individual independent contractor, except, in the case of each of clauses (i), (ii) and (iii), (A) in the ordinary course of business with respect to Persons eligible to earn an annual base salary or wages (or, in the case of non-employee service providers, equivalent compensation) of $200,000 or less, provided that such exclusion shall not apply to any issuance, sale, or delivery of any Company Securities; (B) to the extent required by applicable Law or pursuant to any Employee Plan in effect on the date of this Agreement and set forth on Section 3.18(a) of the Company Disclosure Letter; or (C) in conjunction with annual renewal or plan design changes for the Employee Plans (other than severance or separation plans, bonus or other incentive plans or equity or equity-based awards, plans and agreements) that are made in the ordinary course of business and do not materially increase the cost to the Company and its Subsidiaries;
(h) Settle, release, waive, or compromise any pending or threatened Legal Proceeding for an amount equal to or in excess of $1,000,000 individually or $3,000,000 in the aggregate other than (A) any settlement where the amount paid or to be paid by the Company or any of its Subsidiaries is covered by insurance coverage maintained by the Company or any of its Subsidiaries and (B) settlements of any Legal Proceedings for an amount not in excess of the amount, if any, reflected or reserved expressly and specifically with respect to such Legal Proceedings in the balance sheet (or the notes thereto) of the Company; provided that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business;
(i) materially change the Company’s or its Subsidiaries’ methods, principles or practices of financial accounting or annual accounting period, except as required by GAAP, Regulation S-X of the Exchange Act (or any interpretation thereof), or by any Governmental Authority or applicable Law;
(j) change any material Tax election, or settle any income or other material Tax claim or assessment; consent to any extension or waiver of any limitation period with respect to any Tax claim or assessment; file an amended Tax Return that could reasonably be expected to materially increase the Taxes payable by the Company or its Subsidiaries; or enter into a closing agreement with any Governmental Authority regarding any Tax;
(k) other than as set forth in the capital expenditure budget set forth in Section 5.2(k) of the Company Disclosure Letter (the “Capex Budget”), (i) make, authorize, or make any commitment with respect to, capital expenditures that are in the aggregate in excess of $1,000,000 for the Company or any of its Subsidiaries, (ii) fail to operate in all material respects in accordance with the Capex Budget or asset maintenance plan set forth in Section 5.2(k)(ii) of the Company Disclosure Letter or (iii) enter into any lease of personal property or any renewals thereof except in the ordinary course of business substantially consistent with past practice;
(l) enter into, modify in any material respect, amend in any material respect or terminate (other than any Material Contract that has expired in accordance with its terms) any Material Contract except, in each case, in the ordinary course of business; provided, that any Material Contract (x) described by the definition set forth in Section 1.1(kkk)(iii) shall be exclusively governed by Section 5.2(m) and (y) described by the definition set forth in Section 1.1(kkk)(iv) shall be exclusively governed by Section 5.2(f);
(m) acquire any division, assets, properties, businesses or equity securities in any Person (including by merger, consolidation or otherwiseacquisition of stock or assets), equity other than (i) in or assets constituting all or substantially all from any wholly owned Subsidiary of the business Company or (ii) acquisitions of (or any division products and services in the ordinary course of the business of) another Personbusiness;
(cn) sell, assign, transfer, or otherwise dispose of, any of the Company’s or its Subsidiaries’ material assets, other than such sales, assignments, transfers or other dispositions that (i) are sales of products and services or dispositions of tangible assets in the ordinary course of business; (ii) do not have a purchase price that exceeds $500,000 individually or $1,000,000 in the aggregate; or (iii) expire in accordance with their statutory terms;
(o) sell, assign, transfer, license, sublicenseabandon, abandoncancel, permit to lapselapse or enter the public domain, grant a covenant not to xxxpledge, encumber or otherwise dispose of any material Company Intellectual Property (other than non-exclusive licenses owned or sublicenses granted in purported to be owned by the ordinary course of business);
(d) (i) authorize for issuance, issue, deliver, sell or transfer or agree or commit to issue, deliver, sell or transfer any shares of capital stock of or other equity interest or convertible security in the Company or any of its Subsidiaries or other rights of any kind to acquire, any shares of capital stock of or any other equity interest in the Company or any of its SubsidiariesCompany, other than (xi) the issuance grant of capital stock or other equity interests pursuant to any Employee Plan or (y) the issuance of capital stock or other equity interests from any wholly owned Subsidiary to the Company or any other wholly owned Subsidiary of the Companynonexclusive licenses, (ii) amend or modify any term or provision the abandonment of any registered Intellectual Property that is not material to the operation of the Company’s outstanding equity securities or (iii) accelerate or waive any restrictions pertaining to the vesting of any Company equity-based awards or warrants or other rights of any kind to acquire any shares of capital stock or other equity interests in the Company;
(e) propose or commit to reclassify, combine, split or subdivide 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, shares of capital stock business of the Company or any of its Subsidiaries, except for, with respect to any Subsidiary of the Company, any intercompany restructuring, recapitalization or similar transaction that will not have a Company Material Adverse Effect;
(f) enter into, amend or terminate any Contract with Starboard Value LP or any of its Affiliates;
(g) except as required under applicable Law or the terms of any Employee Plan existing as of the date of this Agreement, (i) increase the compensation or benefits payable to any current or former director or executive officer of the Company or any employee of the Company whose annual base salary is at least $300,000 (in each case, other than annual merit increases in the ordinary course of business, and (iii) registrations of Intellectual Property that expire in accordance with their statutory terms and can no longer be extended;
(p) engage in any transaction with, or (ii) enter into any newagreement, arrangement or amend understanding with, any existing, employment, severance, change in control, retention, bonus guarantee, Affiliate of the Company or collective bargaining agreement or similar agreement or arrangementother Person covered by Item 404 of Regulation S-K promulgated by the SEC that would be required to be disclosed pursuant to Item 404;
(iq) make any loans, advances or capital contributions to, or investments in, any other Person, except for (i) extensions of credit to customers in the ordinary course of business; (ii) advances to directors, officers and other employees for travel and other business-related expenses, in each case in the ordinary course of business and in compliance in all material respects with the Company’s or its Subsidiaries’ policies related thereto; and (iii) loans, advances or capital contributions to, or investments in, any direct or indirect wholly owned Subsidiaries of the Company in amounts less than $500,000 in the aggregate;
(r) amend (i) the Company’s pricing terms in any Contract other than investments in the ordinary course of business and pursuant to the terms of the Contract or (ii) the Company’s standard pricing policy in effect as of the date hereof in a manner adverse to the Company and its Subsidiaries;
(s) effectuate or announce any plant closing, collective redundancy, employee layoff, furlough, reduction to terms and conditions of employment, or similar event that would require notice (or any similar obligations) by the Company or its Subsidiaries under the Worker Adjustment and Retraining Notification Act of 1988, as amended or any similar applicable Law;
(t) enter into, amend, or terminate any collective bargaining agreement or other labor agreement with a wholly owned Subsidiary labor union, works council, or similar labor organization;
(u) enter into any new line of the Company business;
(v) fail to a wholly owned Subsidiary of the Company or the Company or advances of expenses to any director, officer, employee or agent of the Company maintain in connection with advancement obligations in effect on the date of this Agreement, (ii) incur, assume or modify all material respects any material indebtedness or (iii) assume, guarantee, endorse, xxxxx x xxxx (other than a Permitted Lien) on any of the Company’s assets as security or otherwise become liable for indebtedness of another Person (excluding the Company or any of its Subsidiaries)insurance policies; or
(iw) agree, resolve, authorize resolve or commit to take any action of the actions prohibited by this Section 5.2.
Appears in 1 contract
Samples: Merger Agreement (Kaleyra, Inc.)
Forbearance Covenants. Except (a) as expressly contemplated by this Agreement, (b) as set forth in Section 5.1 or Section 5.2 of During the Company Disclosure Letter, (c) as required by applicable Law, or (d) as approved in advance in writing by the Purchaser (which approval will not be unreasonably withheld, conditioned or delayed), during the period from the execution and delivery of this Agreement until the earlier to occur of the termination of this Agreement pursuant to Article IX and the ClosingPre-Closing Period, the Company will not, and will not permit any of its Subsidiaries to, directly or indirectly:to (in each case subject to the Covenant Exceptions):
(a) take amend or otherwise change the Charter, the Bylaws or any action set forth in Section 4.1 of the Stockholders Agreementother similar organizational document;
(b) acquire propose or agree to acquireadopt a plan of complete or partial liquidation, directly or indirectly, by purchasedissolution, merger, consolidation consolidation, restructuring, recapitalization or otherwise, equity or assets constituting all or substantially all of the business of (or any division of the business of) another Personother reorganization;
(c) sell, assign, transfer, license, sublicense, abandon, permit to lapse, grant a covenant not to xxx, or otherwise dispose of any material Intellectual Property (other than non-exclusive licenses or sublicenses granted in the ordinary course of business);
(d) (i) authorize for issuance, issue, deliver, sell or transfer deliver, or agree or commit to issue, sell or deliver, any Company Securities (including any Company Equity-Based Awards) (whether through the issuance or granting of options, restricted stock units, warrants, commitments, subscriptions, rights to purchase or otherwise), except, in each case, (i) for the issuance, delivery or sale of (or agreement or commitment to issue, sell or transfer any deliver) shares of capital stock Company Common Stock pursuant to Company Equity-Based Awards or Company Warrants outstanding as of the date of this Agreement or other equity interest or convertible security pursuant to the ESPP, in each case, in accordance with their terms and the terms of this Agreement (including as limited by Section 2.8(f)); and (ii) as set forth on Section 5.2(c) of the Company Disclosure Letter.
(d) acquire, repurchase or redeem any of its Subsidiaries equity securities, except, in each case, (i) pursuant to the terms and conditions of Company Equity-Based Awards or other rights Company Warrants outstanding as of any kind the date of this Agreement in accordance with their terms as in effect as of the date of this Agreement; or to acquireotherwise satisfy Tax obligations with respect to awards granted pursuant to Company Equity Plans or to pay the exercise price of Company Options, any shares in each case in accordance with the existing terms of capital stock the applicable Company Equity Plan as in effect on the date of this Agreement; or any other equity interest in (ii) for transactions between the Company or and any of its Subsidiaries;
(e) (i) adjust, other than (x) the issuance of capital stock split, subdivide, combine or other equity interests pursuant to any Employee Plan or (y) the issuance of capital stock or other equity interests from any wholly owned Subsidiary to the Company or any other wholly owned Subsidiary of the Company, (ii) amend or modify any term or provision of any of the Company’s outstanding equity securities or (iii) accelerate or waive any restrictions pertaining to the vesting of any Company equity-based awards or warrants or other rights of any kind to acquire reclassify any shares of capital stock or other equity interests or voting interests; (ii) declare, set aside, establish a record date for, authorize or pay any dividend or other distribution (whether in the Company;
(ecash, shares or property or any combination thereof) propose or commit to reclassify, combine, split or subdivide in respect of any shares of its capital stock or other equity or voting interests, or make any other actual, constructive or deemed distribution in respect of its capital stock or other equity or voting interests, except for cash dividends made by any wholly-owned Subsidiary of the Company 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 to the Company or one of its other wholly-owned Subsidiaries; (iii) pledge or encumber any of its Subsidiaries, except for, with respect to capital stock or other equity or voting interests; or (iv) modify the terms of any Subsidiary of the Company, any intercompany restructuring, recapitalization its capital stock or similar transaction that will not have a Company Material Adverse Effectother equity or voting interests;
(f) enter intoacquire or agree to acquire (by merger, amend consolidation or terminate acquisition of stock or assets) any Contract with Starboard Value LP third Person or any of its Affiliatesmaterial equity interest in such Person, or enter into any contractual joint venture or similar arrangement or legal partnership with any third Person;
(g) except as required under applicable Law acquire, or the terms agree to acquire, fee ownership (or its jurisdictional equivalent) of any Employee Plan existing as of the date of this Agreement, real property;
(i) increase the compensation incur or benefits payable to assume any current Indebtedness or former director or executive officer of the Company or issue any employee of the Company whose annual base salary is at least $300,000 (debt securities, except, in each case, other than annual merit increases (A) short-term debt incurred to fund operations of the business pursuant to the Loan Agreement in the ordinary course of business; (B) for loans or advances between Subsidiaries of the Company or between the Company and its Subsidiaries; (C) obligations incurred pursuant to business credit cards in the ordinary course of business; or (D) pursuant to the Loan Agreement as in effect on the date hereof; (ii) enter into any newassume, or amend any existing, employment, severance, change in control, retention, bonus guarantee, endorse or collective bargaining agreement otherwise become liable or similar agreement responsible (whether directly, contingently or arrangement;
otherwise) for the obligations of any third Person, except with respect to obligations of Subsidiaries of the Company; (iiii) make any loans, advances or capital contributions to, or investments in, any other third Person, except, in each case, for (A) extensions of credit to customers in the ordinary course of business; (B) advances of reimbursable expenses to directors, officers and other than investments by employees, in each case, in the Company ordinary course of business; and (C) for loans or a wholly advances between wholly-owned Subsidiary of the Company to a wholly owned Subsidiary Subsidiaries of the Company or between the Company and its wholly-owned Subsidiaries and capital contributions in or advances of expenses to any director, officer, employee or agent Subsidiaries of the Company; or (iv) mortgage, pledge or otherwise encumber any assets, tangible or intangible, or create any lien thereon (other than Permitted Liens);
(i) except (i) in order to comply with applicable Law, (ii) as required pursuant to the existing terms of any Company in connection with advancement obligations Benefit Plan in effect on the date of this Agreement, (iilisted on Section 3.19(a) incurof the Company Disclosure Letter and made available to Parent, assume or modify any material indebtedness or (iii) assumeas provided in this Agreement, guarantee(A) establish, endorseadopt, xxxxx x xxxx enter into, terminate or amend any material Company Benefit Plan (or any plan, policy, agreement, Contract or arrangement that would be a material Company Benefit Plan if in effect on the date of this Agreement), or take any action to accelerate the vesting, payment or funding of any compensation or benefits under, any Company Benefit Plan (or any plan, policy, agreement, Contract or arrangement that would be a Company Benefit Plan if in effect on the date of this Agreement), other than (x) any amendment to any Company health and welfare employee benefit plans that would not materially increase the cost to the Company or any of its Subsidiaries of maintaining such Company health and welfare employee benefits plans or (y) entering into offer letters, consulting agreements or similar agreements permitted pursuant to clause (D) below; (B) grant to any Service Provider whose annual cash on target compensation exceeds $340,000 any increase or decrease in cash on target compensation, bonus, incentive or fringe or other benefits; (C) grant to any Service Provider any new or increased change in control, retention, transaction bonus, tax gross-up, equity or equity-based award or severance or termination pay, or materially amend or modify any such arrangement (other than pursuant to separation agreements entered into in the ordinary course of business, consistent with past practice, with terminated employees in an amount not to exceed $100,000); or (D) terminate or hire any Service Provider of the Company or any of its Subsidiaries (other than (1) entering into at-will (to the extent at-will is recognized in the applicable jurisdiction of employment) offer letters, consulting arrangements or similar arrangements with any individual whose total annual cash compensation is equal to or less than $340,000, which offer or arrangement does not contain severance or change of control benefits; and (2) terminating Service Providers (x) with total annual cash compensation equal to or less than $340,000 in the ordinary course of business, consistent with past practice, or (y) for “cause”, in the Company’s reasonable good faith judgement);
(j) xxxxxx, release, waive or compromise any pending or threatened material Legal Proceeding, except for the settlement of any Legal Proceedings (i) solely for monetary damages in an amount (A) not in excess of $1,000,000 or (B) that does not exceed the amount reflected or reserved against in the Audited Company Balance Sheet; or (ii) settled in compliance with Section 6.15;
(k) except as required by applicable Law or GAAP, (i) other than in the ordinary course of business, revalue in any material respect any of its properties or assets, including writing-off notes or accounts receivable; or (ii) make any change in any of its accounting principles or practices;
(l) (i) make or change any material Tax election; (ii) settle or compromise any material Tax claim or assessment; (iii) consent to any extension or waiver of any limitation period with respect to any material Tax claim or assessment; (iv) file an amended Tax Return that could materially increase the Taxes payable by Parent or its Affiliates (including, after the Closing, the Company and its Subsidiaries); (v) surrender any right to claim a refund of material Taxes; (vi) fail to pay any material Tax that becomes due and payable except to the extent such Tax is contested in good faith; or (vii) enter into a closing agreement with any Governmental Authority regarding any material Tax.
(m) (i) incur, authorize or commit to incur any material capital expenditures other than (A) consistent in all material respects with the capital expenditure budget set forth in Section 5.2(m) of the Company Disclosure Letter; (B) pursuant to obligations imposed by Material Contracts or Leases; or (C) pursuant to agreements in effect prior to the date of this Agreement; (ii) except in the ordinary course of business (x) enter into any Contract which if entered into prior to the date hereof would be a Material Contract or (y) modify or amend any material rights under any Material Contract in a manner that is adverse in any material respect to the Company and its Subsidiaries, taken as a whole, or terminate any Material Contract (other than any Material Contract that has expired in accordance with its terms); (iii) extend the term of the Contract set forth in Section 5.2(m) of the Company Disclosure Letter; (iv) maintain insurance at less than current levels or otherwise in a manner inconsistent with past practice; (v) engage in any transaction with, or enter into any agreement, arrangement or understanding with, any Affiliate of the Company or other Person covered by Item 404 of Regulation S-K promulgated by the SEC that would be required to be disclosed pursuant to Item 404; (vi) effectuate a “plant closing,” “mass layoff” (each as defined in the WARN Act); (vii) grant any material refunds, credits, rebates or other allowances to any end user, customer, reseller or distributor, in each case other than in the ordinary course of business; or (viii) waive, release, grant, encumber or transfer any right of material value to the Company and its Subsidiaries, taken as a whole, other than in the ordinary course of business;
(n) negotiate, modify, extend, terminate or enter into any Labor Agreement, or recognize or certify any labor union, works council or other labor organization or similar group of employees as the bargaining representative for any employees of the Company or its Subsidiaries;
(o) affirmatively waive or release any nondisclosure, noninterference or nondisparagement obligation of any Service Provider;
(p) sell, assign, transfer, lease, license (other than a Permitted Lien), abandon, let lapse, cancel, dispose of, or otherwise subject to any lien or other encumbrance (in each case, other than Permitted Liens) on any material Company Intellectual Property, except for non-exclusive licenses of Intellectual Property entered in the ordinary course of business;
(q) disclose or abandon any material Trade Secrets, except in the ordinary course of business, and to the extent not economically desirable to maintain for the conduct of the Company’s assets as security business of the Company and its Subsidiaries, or otherwise become liable disclose, license, make available, or deliver any material source code for indebtedness any Company Software to any Person except to a third-party service provider or other agent obligated in writing to (i) maintain the confidentiality of, and not disclose, such source code; and (ii) use such source code only in the provision of another Person (excluding services to the Company or any of its Subsidiaries);
(r) make any material change to the Company’s or any of its Subsidiaries’ policies or procedures with respect to their Processing of Personal Information, except to (A) remediate any privacy or security issue; (B) enhance data security or integrity; (C) to comply with applicable Privacy and Data Security Requirements or as otherwise directed or required by a Governmental Authority; or
(is) agreeenter into, resolve, authorize or agree or commit to enter into, a Contract to take any action of the actions prohibited by this Section 5.2.
Appears in 1 contract
Samples: Merger Agreement (Sumo Logic, Inc.)
Forbearance Covenants. Except (a) as expressly contemplated by this Agreement, (bi) as set forth in Section 5.1 or Section 5.2 of the Company Disclosure Letter, ; (c) as required by applicable Law, or (dii) as approved in advance in writing by the Purchaser Parent (which approval will not be unreasonably withheld, conditioned or delayed); or (iii) as expressly contemplated by the terms of this Agreement, at all times during the period from commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of the termination of this Table of Contents Agreement pursuant to Article IX VIII and the ClosingEffective Time, the Company will not, and will not permit any of its Subsidiaries Subsidiaries, to, directly or indirectly:
(a) take amend the Charter, the Bylaws or any action set forth in Section 4.1 of the Stockholders Agreementother similar organizational document;
(b) acquire propose or agree to acquireadopt a plan of complete or partial liquidation, directly or indirectly, by purchasedissolution, merger, consolidation consolidation, restructuring, recapitalization or otherwise, equity or assets constituting all or substantially all of the business of (or any division of the business of) another Personother reorganization;
(c) issue, sell, assign, transfer, license, sublicense, abandon, permit to lapse, grant a covenant not to xxx, or otherwise dispose of any material Intellectual Property (other than non-exclusive licenses or sublicenses granted in the ordinary course of business);
(d) (i) authorize for issuance, issue, deliver, sell or transfer deliver or agree or commit to issue, deliver, sell or transfer deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities, except (A) for the issuance or sale of shares of Company Common Stock pursuant to Company Options or Company RSUs outstanding as of the Capitalization Date in accordance with their terms and pursuant to the ESPP in accordance with its terms (as modified by Section 2.8(d) and Section 2.8(e)); (B) in connection with agreements in effect on the date hereof; or (C) as contemplated by Section 5.2(j);
(d) directly or indirectly acquire, repurchase or redeem any securities, except for (A) repurchases, withholdings, or cancellations of Company Securities pursuant to the terms and conditions of Company Options or Company RSUs outstanding as of the date hereof in accordance with their terms as of the date hereof, or (B) transactions between the Company and any of its direct or indirect Subsidiaries;
(e) (A) adjust, split, combine or reclassify any shares of capital stock of stock, or other equity interest issue or convertible security in the Company authorize or any of its Subsidiaries or other rights of any kind to acquire, any shares of capital stock of or any other equity interest in the Company or any of its Subsidiaries, other than (x) propose the issuance of any other Company Securities in respect of, in lieu of or in substitution for, shares of its capital stock or other equity interests pursuant to or voting interest; (B) declare, set aside or pay any Employee Plan or (y) the issuance of capital stock dividend or other equity interests from any wholly owned Subsidiary to the Company distribution (whether in cash, shares or property or any other wholly owned Subsidiary combination thereof) in respect of the Company, (ii) amend or modify any term or provision of any of the Company’s outstanding equity securities or (iii) accelerate or waive any restrictions pertaining to the vesting of any Company equity-based awards or warrants or other rights of any kind to acquire any shares of capital stock or other equity interests or voting interest, or make any other actual, constructive or deemed distribution in the Company;
(e) propose or commit to reclassify, combine, split or subdivide any capital stock respect of the Company or issue or authorize the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of capital stock or other equity or voting interest, except for cash dividends made by any direct or indirect wholly owned Subsidiary of the Company to the Company or any one of its other wholly owned Subsidiaries, except for, with respect to ; (C) pledge or encumber any Subsidiary shares of its capital stock or other equity or voting interest; or (D) modify the Company, terms of any intercompany restructuring, recapitalization shares of its capital stock or similar transaction that will not have a Company Material Adverse Effectother equity or voting interest;
(f) enter into(A) incur, amend assume or terminate suffer any Contract with Starboard Value LP Indebtedness (including any long-term or short-term debt) or issue any of its Affiliates;
debt securities, except (g1) except as required under applicable Law or the terms of any Employee Plan existing as of the date of this Agreement, (i) increase the compensation or benefits payable to any current or former director or executive officer of the Company or any employee of the Company whose annual base salary is at least $300,000 (in each case, other than annual merit increases for trade payables incurred in the ordinary course of business; (2) obligations incurred pursuant to business credit cards in the ordinary course of business; and (3) intercompany loans or advances between or among the Company and/or its direct or indirect wholly-owned Subsidiaries; or (iiB) enter into any newassume, or amend any existing, employment, severance, change in control, retention, bonus guarantee, endorse or collective bargaining agreement otherwise become liable or similar agreement responsible (whether directly, contingently or arrangementotherwise) for the obligations of any other Person, except with respect to obligations of direct or indirect wholly owned Subsidiaries of the Company;
(ig) mortgage or pledge any of its and its Subsidiaries’ assets, tangible or intangible, or create or suffer to exist any lien thereupon (other than Permitted Liens), other than in connection with financing transactions permitted by Section 5.2(f) or consented to by Parent;
(h) make any loans, advances or capital contributions to, or investments in, any other Person, except for (1) extensions of credit to customers in the ordinary course of business; (2) advances to directors, officers and other employees for travel and other business-related expenses, in each case in the ordinary course of business and in compliance in all material respects with the Company’s policies related thereto; and (3) loans, advances or capital contributions to, or investments in, direct or indirect wholly-owned Subsidiaries of the Company;
(i) acquire, lease, license, sell, abandon, transfer, assign, guarantee, or exchange any assets, tangible or intangible (including any Company Intellectual Property), in each case in excess of $250,000 individually, and other than investments by (1) the Company sale, lease or a wholly owned Subsidiary licensing of products or services of the Company to a wholly owned Subsidiary Group or other materials embodying Company Intellectual Property in the ordinary course of business; (2) the acquisition, assignment or abandonment of immaterial Company Intellectual Property in connection with the exercise of the reasonable business judgment of the Company or Group in the ordinary course of business; (3) the abandonment of trade Table of Contents secrets in the ordinary course of business and to the extent not economically desirable to maintain for the conduct of the business of the Company Group; and (4) any capital expenditures permitted by (or advances consented to by Parent) under Section 5.2(n);
(j) (A) enter into, adopt, amend (including accelerating the vesting, payment or funding), modify or terminate any bonus, profit sharing, compensation, severance, termination, option, appreciation right, performance unit, phantom equity, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, severance or other Employee Plan or employee benefit agreement, trust, plan, fund or other arrangement for the compensation, benefit or welfare of expenses any director, officer or employee of the Company Group in any manner; (B) increase the compensation of any director, officer, employee, individual consultant, former employee, individual independent contractor, or other individual service provider of the Company Group, pay any special bonus or special remuneration to any director, officer, employee employee, individual consultant, former employee, individual independent contractor, or agent other individual service provider of the Company Group, or pay any benefit not required by (or accelerate the time of payment or vesting of any payment becoming due under) any Employee Plan as in effect as of the date hereof, except in the case of each of (A) and (B), (1) as may be required by applicable law or the terms of the applicable Employee Plan in effect as of the date hereof; (2) in connection with advancement obligations any new hires of employees of the Company Group in effect on the date ordinary course of this Agreementbusiness and consistent with past practice and whose annual salary is less than $150,000; or (3) for increases in compensation for employees of the Company Group below the level of vice president and whose annual salary is less than $150,000 in the ordinary course of business and consistent with past practice (it being understood that these exceptions in the foregoing clauses (1), (ii2) incurand (3) will not apply to any actions otherwise prohibited by Section 5.2(c) or the following sub-clause (C); or (C) enter into any change in control, assume severance or modify similar agreement or any retention or similar agreement with any officer, employee, director, individual independent contractor, individual consultant, or other individual service provider of the Company Group;
(k) settle, release, waive or compromise any pending or threatened material Legal Proceeding or other claim, except for the settlement of any Legal Proceedings or other claim that is (A) reflected or reserved against in the Audited Company Balance Sheet; (B) for solely monetary payments of no more than $100,000 individually and $250,000 in the aggregate; or (C) settled in compliance with Section 6.15;
(l) except as required by applicable law or GAAP, (A) revalue in any material indebtedness respect any of its properties or assets, including writing-off notes or accounts receivable, other than in the ordinary course of business; or (iiiB) assumemake any change in any of its accounting principles or practices;
(A) make or change any material Tax election; (B) settle, guaranteeconsent to or compromise any material Tax claim or assessment or surrender a right to a material Tax refund; (C) consent to any extension or waiver of any limitation period with respect to any material Tax claim or assessment; (D) file an amended Tax Return that could materially increase the Taxes payable by the Company or its Subsidiaries; or (E) enter into a closing agreement with any Governmental Authority regarding any material Tax;
(n) incur or commit to incur any capital expenditure(s) other than (1) consistent with the capital expenditure budget set forth in Section 5.2(n) of the Company Disclosure Letter or (2) to the extent that such capital expenditures do not exceed $1,000,000 individually or $5,000,000 in the aggregate;
(o) enter into, endorsemodify, xxxxx x xxxx amend or terminate any (a) Contract (other than any Material Contract) that if so entered into, modified, amended or terminated would have a Permitted LienCompany Material Adverse Effect; or (b) on any Material Contract except in the ordinary course of the Company’s assets business or as security permitted under Section 5.2(c) and Section 5.2(j);
(p) maintain insurance at less than current levels or otherwise become liable for indebtedness in a manner inconsistent with past practice; Table of another Person Contents
(excluding q) engage in any transaction with, or enter into any agreement, arrangement or understanding with, any Affiliate of the Company or other Person covered by Item 404 of Regulation S-K promulgated by the SEC that would be required to be disclosed pursuant to Item 404;
(r) effectuate a “plant closing,” “mass layoff” (each as defined in WARN) or other employee layoff event affecting in whole or in part any site of its Subsidiariesemployment, facility, operating unit or employee;
(s) grant any material refunds, credits, rebates or other allowances to any end user, customer, reseller or distributor, in each case other than in the ordinary course of business;
(t) acquire (by merger, consolidation or acquisition of stock or assets) any other Person or any material equity interest therein or enter into any joint venture, legal partnership (excluding, for avoidance of doubt, strategic relationships, alliances, reseller agreements and similar commercial relationships), limited liability corporation or similar arrangement with any third Person;
(u) enter into any Collective Bargaining Agreement or agreement to form a work council or other Contract with any labor organization or works council (except to the extent required by applicable law);
(v) adopt or implement any stockholder rights plan or similar arrangement, in each case, applicable to the Merger or any other transaction consummated pursuant to Parent’s rights under Section 5.3(e)(i)(2) or Section 5.3(e)(ii)(3); or
(iw) agree, resolveenter into, authorize any of, or agree or commit to enter into a Contract to take any action of the actions prohibited by this Section 5.2. For purposes of this Section 5.2, no breach (other than a willful breach) shall be deemed a failure to perform “in all material respects” for purposes of Section 7.2(b) unless such breach, individually or together with other breaches of this Section 5.2, results or would reasonably be expected to result in additional cost, expense or liability to the Company, Parent and their Affiliates that is more than $3,000,000 (provided, that, for the avoidance of doubt, the effect of any such breach may be taken into account, if and to the extent applicable, in determining the satisfaction of the condition set forth in Section 7.2(a)(iii)).
Appears in 1 contract
Samples: Merger Agreement (MINDBODY, Inc.)
Forbearance Covenants. Except (ai) as expressly contemplated by this Agreement, (bii) as set forth in Section 5.1 or Section 5.2 of the Company Disclosure Letter, (ciii) as required by applicable Law, including any COVID-19 Measures, (iv) for any COVID-19 Reasonable Response or (dv) as approved in advance by Parent in writing by the Purchaser (which approval will shall not be unreasonably withheld, conditioned or delayed), during the period from the execution and delivery of this Agreement until the earlier to occur of the termination of this Agreement pursuant to Article IX and the ClosingPre-Closing Period, the Company will shall not, and will shall not permit any of its Subsidiaries Subsidiaries, to, directly or indirectly:
(a) take any action set forth in Section 4.1 amend the Organizational Documents of the Stockholders AgreementCompany or any of its Subsidiaries (other than any immaterial amendments to the Organizational Documents of any Subsidiary of the Company);
(b) acquire propose or agree to acquireadopt a plan of complete or partial liquidation, directly or indirectly, by purchasedissolution, merger, consolidation consolidation, restructuring, recapitalization or otherwise, equity or assets constituting all or substantially all other reorganization of the business of (Company or any division of the business of) another Personits Subsidiaries;
(c) issue, sell, assign, transfer, license, sublicense, abandon, permit to lapse, grant a covenant not to xxx, or otherwise dispose of any material Intellectual Property (other than non-exclusive licenses or sublicenses granted in the ordinary course of business);
(d) (i) authorize for issuance, issue, deliver, sell grant, pledge, dispose of or transfer encumber, or agree or commit to issue, sell, deliver, sell grant, pledge, dispose of or transfer encumber, any Company Securities, except (i) in accordance with the terms of any employment agreements or any award agreements with respect to, and upon the exercise or settlement of, Company RSAs, Company RSUs, Company PSUs or Company DSUs, in each case, in effect on the date of this Agreement as permitted by their existing terms; (ii) up to 15,000 shares of capital stock Company Common Stock underlying new grants of Company RSAs, Company RSUs or other equity interest Company PSUs to employees of the Company and its Subsidiaries made in connection with new hires or convertible security promotions only in the ordinary course of business consistent with past practice; and (iii) as contemplated by Section 5.2(g) or Section 6.7;
(d) except for transactions solely among the Company and its Subsidiaries or solely among the Company’s Subsidiaries, reclassify, split, combine, subdivide or redeem, repurchase, purchase or otherwise acquire or amend the terms of, directly or indirectly, any of its Subsidiaries or other rights of any kind to acquire, any shares of capital stock of or any other equity interest in the Company or any of its Subsidiaries, other than (x) the issuance of capital stock or other equity interests pursuant or voting interest, other than (i) the withholding of shares of Company Common Stock to any Employee Plan satisfy the exercise price or Tax obligations incurred in connection with the settlement of Company RSAs, Company RSUs, Company PSUs or Company DSUs or (yii) the issuance acquisition by the Company of capital stock Company RSAs, Company RSUs, Company PSUs or Company DSUs in connection with the forfeiture of such awards, in each case, in accordance with their respective terms;
(i) establish a record date for, declare, set aside or pay any dividends on, or make any other distribution (whether in cash, shares or other equity interests from or property, including any wholly owned Subsidiary to the Company or any other wholly owned Subsidiary combination thereof) in respect of the Company, (ii) amend or modify any term or provision of any of the Company’s outstanding equity securities or (iii) accelerate or waive any restrictions pertaining to the vesting of any Company equity-based awards or warrants or other rights of any kind to acquire any shares of capital stock or other equity interests or voting interest, or make any other actual, constructive or deemed distribution in the Company;
(e) propose or commit to reclassify, combine, split or subdivide any capital stock respect of the Company or issue or authorize the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of capital stock or other equity or voting interest, except for cash dividends made by any direct or indirect wholly owned Subsidiary of the Company to the Company or any one of its other wholly owned Subsidiaries, except for, with respect to ; or (ii) pledge or encumber any Subsidiary shares of the Company, any intercompany restructuring, recapitalization its capital stock or similar transaction that will not have a Company Material Adverse Effectother equity or voting interest;
(f) enter into, amend or terminate any Contract with Starboard Value LP or any of its Affiliates;
(g) except as required under applicable Law or the terms of any Employee Plan existing as of the date of this Agreement, (i) increase the compensation incur, assume or benefits payable suffer to exist any current or former director or executive officer of the Company or any employee of the Company whose annual base salary is at least $300,000 Indebtedness, except (in each case, other than annual merit increases A) for trade payables incurred in the ordinary course of business; (B) for loans or advances to direct or indirect wholly owned Subsidiaries of the Company; and (C) for Indebtedness under the Company Credit Agreement, not to exceed an aggregate principal amount of $25,000,000 outstanding at any given time; (ii) enter into any new, or amend any existing, employment, severance, change in control, retention, bonus guarantee, or collective bargaining agreement or similar agreement or arrangement;
(i) make any loans, advances or capital contributions to, or investments in, any other Person, except for (1) extensions of credit to Company Franchisees; and (2) advances to directors, officers and other employees, in each case of clauses (1) and (2) in the ordinary course of business consistent with past practice; or (iii) mortgage or pledge any assets, tangible or intangible, or create or suffer to exist any Lien thereupon, except for any Permitted Liens;
(g) (i) enter into, adopt, materially amend, materially modify or terminate any material Employee Plan; (ii) increase the compensation, bonus, severance, retention or termination pay payable or that could become payable to any current or former directors, officers or employees, or pay any benefit not provided under any Employee Plan as in effect as of the date of this Agreement; or (iii) grant, amend or modify any equity or equity-based awards (other than investments as permitted by Section 5.2(c)), except, in each case, (A) to the Company extent required by applicable Law or a wholly owned Subsidiary of the Company to a wholly owned Subsidiary of the Company or the Company or advances of expenses pursuant to any director, officer, employee Employee Plan or agent of the Company in connection with advancement obligations Contract in effect on the date of this Agreement, in each case, in accordance with their existing terms; (B) in conjunction with actions taken in the ordinary course of business consistent with past practice for any employee below the level of Vice President; (C) in conjunction with annual renewal or plan design changes for the Employee Plans that provide health or other welfare benefits that are made in the ordinary course of business consistent with past practice; (D) in conjunction with new hires or promotions and changes in job position or status of any current employee below the level of Vice President; or (E) in connection with the actions set forth in Section 5.2(g) of the Company Disclosure Letter; provided, however, that in no event shall the Company or its Subsidiaries enter into any employment agreement without the prior written approval of Parent (which approval shall not be unreasonably withheld, conditioned or delayed);
(h) settle any pending or threatened Legal Proceeding, except for the settlement of any Legal Proceeding that (i) is for solely monetary payments by the Company or its Subsidiaries of no more than $250,000 individually and $1,000,000 in the aggregate; (ii) incur, assume or modify does not impose any material indebtedness non-monetary obligations on the Company or its Subsidiaries; (iii) is Transaction Litigation and settled in compliance with Section 6.10; or (iv) involves any dispute between one or more of Parent or Merger Sub, on the one hand, and the Company, on the other hand;
(i) materially change the Company’s or its Subsidiaries’ methods, principles or practices of financial accounting or annual accounting period, except as required by GAAP, Regulation S-X of the Exchange Act (or any interpretation thereof), or by any Governmental Authority;
(i) except in the ordinary course of business consistent with past practice, make, revoke or change any Tax election, change any method of Tax accounting, file any amended Tax Return or take action to surrender any claim for a refund of Taxes that, in each case, individually or in the aggregate, would materially and adversely affect the Tax liability of the Company or any Subsidiary, (ii) change the entity classification of any Subsidiary of the Company or (iii) assume, guarantee, endorse, xxxxx x xxxx consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment (other than any automatic extension of time in which to file a Tax Return);
(k) incur or commit to incur any capital expenditures in excess of $500,000 individually or $2,000,000 in the aggregate other than (i) consistent with the capital expenditure budget for the fiscal year 2023, set forth in Section 5.2(k) of the Company Disclosure Letter, (ii) pursuant to obligations imposed by any Contract in effect as of the date of this Agreement or (iii) emergency capital expenditures that are necessary to maintain the operations of the Company’s business and properties as currently conducted; provided that to the extent reasonably practicable the Company shall consult with Parent prior to incurring any emergency capital expenditures in excess of $100,000, individually;
(l) enter into, modify in any material respect, amend in any material respect, terminate (other than any Material Contract, Real Property Lease or other restaurant lease that has expired in accordance with its terms) or waive any material rights or material claims under any Material Contract, Real Property Lease or other restaurant lease except, in each case, (i) in the ordinary course of business consistent with past practice or (ii) for renewals of any Material Contract (other than any Company Franchise Agreement) on substantially similar terms;
(m) (i) enter into any new Company Franchise Agreement with a new Company Franchisee, (ii) renew any existing Company Franchise Agreement, other than in the case of an Eligible Franchise Agreement Renewal on a New Company Franchise Agreement Form, (iii) modify in any material respect, amend in any material respect or terminate any Company Franchise Agreement except, in each case, (A) in the ordinary course of business consistent with past practice or (B) if such amendment or modification would not extend the term of such Company Franchise Agreement and would be on terms more favorable to the Company than the form of franchise agreement or deviations therefrom provided to Parent prior to the date of this Agreement, or (iv) modify a Company FDD or any other materials that were created for or are used in connection with the offering or selling of any Company Franchise or entering into any development agreement; provided that, in the case of clause (ii) of this subsection, if the Company contemplates changes or deviations from the New Company Franchise Agreement Form, Parent shall have provided its consent to any such changes or deviations (such consent not to be unreasonably withheld, conditioned or delayed);
(n) make any material change to the terms of the Company’s or any of its Subsidiaries’ system-wide or region-wide policies with respect to Company Franchisees, including any existing or new policies relating to (i) system-wide or region-wide Company Franchisee rent, royalty or other fees and charges, or maintenance of advertising funds, (ii) system-wide or region-wide franchisee incentives or franchisee economic assistance, or (iii) system-wide or region-wide mandates relating to equipment, hardware or software; except, in each case, for updates to existing system-wide or region-wide policies in the ordinary course of business consistent with past practice (for purposes of this clause, “system-wide” means applicable to all Company Franchisees and “region-wide” means applicable to Company Franchisees in any of the following geographic regions: (A) United States; (B) Southeast Asia; or (C) Latin America/Caribbean);
(o) other than with respect to the matters set forth in Section 5.2(g), engage in any transaction with, or enter into any agreement, arrangement or understanding with, any Affiliate of the Company or other Person covered by Item 404 of Regulation S-K promulgated by the SEC that would be required to be disclosed pursuant to Item 404;
(p) acquire (by merger, consolidation or acquisition of stock or assets) any other Person or any material equity interest therein or assets thereof in any one transaction or series of related transactions, other than acquisitions (x) of raw materials, supplies, equipment or inventory from vendors or suppliers for consumption or use in the ordinary course of business consistent with past practice or (y) that do not exceed $100,000 in the aggregate;
(q) lease, acquire or sell, or enter into any Contract to lease, acquire or sell, any real property or any interest therein outside the ordinary course of business consistent with past practice for an aggregate payment that exceeds $100,000 in any one transaction or series of related transactions, in each case, without good faith consultation with Parent;
(r) sell, assign, license, lease, transfer, abandon or otherwise dispose of, or create any Lien on (other than any Permitted Lien) on ), or otherwise dispose of, any of the Company’s or its Subsidiaries’ tangible assets, other than such sales, assignments, licenses, leases, transfers, Liens or other dispositions (i) in the ordinary course of business consistent with past practice, (ii) that are sales or other dispositions of equipment that is no longer used by the Company or its Subsidiaries in the operation of their respective businesses or (iii) that have neither a fair market value of the assets as security nor an aggregate purchase price that exceeds $100,000 in any one transaction or series of related transactions;
(s) sell, assign, lease, license, sublicense, terminate, abandon, waive, allow to lapse or otherwise become liable transfer or dispose of, or create or incur any Lien (other than Permitted Liens) on or grant any interest in or rights with respect to, any material Company Intellectual Property (except for indebtedness licenses contained in Company Franchise Agreements with Company Franchisees and non-exclusive licenses, in each case, entered into or granted in the ordinary course of another Person business consistent with past practice);
(excluding t) fail to use reasonable best efforts to maintain in full force and effect material insurance policies covering the Company and its Subsidiaries and their respective directors, officers, properties, assets and businesses in a form and amount consistent with past practice in all material respects;
(u) establish, adopt, enter into or amend any collective bargaining agreement (or recognize or certify any labor union, labor organization, works council or group of employees as the bargaining representative for any employees of the Company or any of its Subsidiaries);
(v) implement any employee layoffs that trigger the WARN Act; or
(iw) agree, resolve, authorize resolve or commit to take any action of the actions prohibited by this Section 5.2.
Appears in 1 contract
Forbearance Covenants. Except (a) as expressly contemplated by this Agreement, (b) as set forth in Section 5.1 or Section 5.2 of the Company Disclosure Letter, (c) as required by applicable Law, or (d) as approved in advance by Parent in writing by the Purchaser (which approval will shall not be unreasonably withheld, conditioned or delayed), during the period from the execution and delivery of this Agreement until the earlier to occur of the termination of this Agreement pursuant to Article IX VIII and the ClosingEffective Time, the Company will shall not, and will shall not permit any of its Subsidiaries to, directly or indirectly:
(a) take amend, waive any action set forth in Section 4.1 provision under, or otherwise change the Organizational Documents of the Stockholders AgreementCompany or any of its Subsidiaries (other than immaterial waivers under the By-Laws and any waivers or amendments to the Organizational Documents of any wholly owned Subsidiary of the Company that would not or would not reasonably be expected to prevent, materially delay or materially impair the consummation of the Merger or the transactions contemplated hereby);
(b) acquire propose or agree to acquireadopt a plan of complete or partial liquidation, directly or indirectly, by purchasedissolution, merger, consolidation consolidation, restructuring, recapitalization or otherwise, equity or assets constituting all or substantially all of the business of (or any division of the business of) another Personother reorganization;
(c) issue, sell, assign, transfer, license, sublicense, abandon, permit to lapse, grant a covenant not to xxx, or otherwise dispose of any material Intellectual Property (other than non-exclusive licenses or sublicenses granted in the ordinary course of business);
(d) (i) authorize for issuance, issueencumber, deliver, sell grant options or transfer rights to purchase or receive, pledge, dispose of or deliver or agree or commit to issue, deliver, sell or transfer deliver any shares Company Securities, except (i) as required by the terms of capital stock any Employee Plan in effect as of the date of this Agreement or other equity interest (ii) upon the exercise or convertible security settlement of, Company Options, Company RSUs or Company PSUs, in each case, outstanding as of the date of this Agreement or granted after the date hereof in compliance with this Agreement;
(d) except for transactions solely among the Company and its Subsidiaries or solely among the Subsidiaries of the Company, reclassify, split, combine, subdivide or redeem, repurchase, purchase or otherwise acquire or amend the terms of, directly or indirectly, any of its Subsidiaries or other rights of any kind to acquire, any shares of capital stock of or any other equity interest in the Company or any of its Subsidiaries, other than (x) the issuance of ’ capital stock or other equity interests pursuant to any Employee Plan or voting interest, other than (yi) the issuance acquisitions of capital stock or other equity interests from any wholly owned Subsidiary shares of Company Common Stock in connection with the surrender of shares of Company Common Stock by holders of Company Options in order to pay the exercise price of such Company or any other wholly owned Subsidiary of the CompanyOptions, (ii) amend the withholding of shares of Company Common Stock to satisfy Tax obligations incurred in connection with the exercise of Company Options and the settlement of Company RSUs or modify any term or provision of any of the Company’s outstanding equity securities or Company PSUs, and (iii) accelerate the acquisition by the Company of Company Options, Company RSUs and Company PSUs in connection with the forfeiture of such awards, in each case, in accordance with their terms as of the date of this Agreement;
(i) declare, set aside or waive pay any restrictions pertaining to the vesting of any Company equity-based awards or warrants dividend or other rights distribution (whether in cash, shares or property or any combination thereof) in respect of any kind to acquire any shares of capital stock or other equity interests or voting interest, or make any other actual, constructive or deemed distribution in the Company;
(e) propose or commit to reclassify, combine, split or subdivide any capital stock of the Company or issue or authorize the issuance respect of any other securities in respect of, in lieu of, or in substitution for, shares of capital stock or other equity or voting interest, except for cash dividends made by any direct or indirect wholly owned Subsidiary of the Company to the Company or any one of its other wholly owned Subsidiaries, except for, with respect to ; or (ii) pledge or encumber any Subsidiary shares of the Company, any intercompany restructuring, recapitalization its or similar transaction that will not have a Company Material Adverse Effectits Subsidiaries’ capital stock or other equity or voting interest;
(f) enter into(i) incur, amend assume endorse, guarantee, or terminate otherwise become liable for any Contract Indebtedness (including any long-term or short-term debt) or issue any debt securities, except (A) for trade payables incurred in the ordinary course of business consistent with Starboard Value LP past practice; (B) for loans or advances to or from any Subsidiaries of its Affiliates;
the Company; (gC) except as required for short-term indebtedness or revolving credit indebtedness under applicable Law or the terms Company Credit Agreement to fund operations of any Employee Plan existing the business in the ordinary course of business consistent with past practice, provided that the Company shall not be permitted to increase the borrowing capacity as of the date of this Agreement, Agreement under such agreement; and (iD) increase hedging in compliance with the compensation or benefits payable to any current or former director or executive officer hedging strategy of the Company or any employee of the Company whose annual base salary is at least $300,000 (in each case, other than annual merit increases in the ordinary course of business) or business consistent with past practice; (ii) enter into any newassume, or amend any existing, employment, severance, change in control, retention, bonus guarantee, endorse or collective bargaining agreement otherwise become liable or similar agreement responsible (whether directly, contingently or arrangement;
otherwise) for the obligations of any other Person, except with respect to obligations of direct or indirect wholly owned Subsidiaries of the Company; (iiii) make any loans, advances or capital contributions to, or investments in, any other Person, except for (1) extensions of credit to customers in the ordinary course of business consistent with past practice; (2) advances to directors, officers and other employees for travel and other business-related expenses, in each case in the ordinary course of business consistent with past practice and in compliance with the Company’s policies related thereto; or (iv) mortgage or pledge any assets, tangible or intangible, or create or suffer to exist any lien thereupon (other than investments Permitted Liens), except for mortgages and pledges granted under Company Indebtedness outstanding as of the date hereof;
(g) except as required by the Company or a wholly owned Subsidiary terms of the Company to a wholly owned Subsidiary of the Company or the Company or advances of expenses to any director, officer, employee or agent of the Company in connection with advancement obligations Employee Plan in effect on the date of this Agreement, (iii) incurenter into, assume adopt, amend or modify in any material indebtedness respect, or terminate any material Employee Plan (iii) assumeor any plan, guaranteeagreement or arrangement that would be a material Employee Plan if in effect on the date of this Agreement), endorse, xxxxx x xxxx (other than a Permitted Lien) on any in conjunction with annual renewal or plan design changes for those Employee Plans that provide health or other welfare benefits that, in each case, are in the ordinary course of business consistent with past practice and do not materially increase the Company’s assets as security or otherwise become liable for indebtedness of another Person (excluding cost to the Company or any of its Subsidiaries; (ii) increase the compensation or benefits provided to any Service Provider other than increases in base salary or wage rate in the ordinary course of business consistent with past practice to any current employee with annual base compensation less than $200,000; or (iii) grant or provide any severance or termination payments or benefits to any Service Provider (other than reasonable payments or benefits in the ordinary course of business consistent with past practice);
(h) (i) enter into, adopt, renew, extend or amend any Collective Bargaining Agreement; or (ii) recognize or certify any Labor Organization or group of employees as the bargaining representative for any employees of the Company or its Subsidiaries;
(i) (i) other than for cause, terminate the employment of any employee of the Company or any of its Subsidiaries with an annual base salary in excess of $200,000 or (ii) hire any individual as an employee of the Company or any of its Subsidiaries with an annual base salary in excess of $200,000, in each case, other than in the ordinary course of business and consistent with past practice.
(j) settle, release, waive or compromise any pending or threatened Legal Proceeding, except for the settlement of any Legal Proceeding that (i) is solely for monetary payments by the Company or any of its Subsidiaries of no more than $1,000,000 individually and $3,000,000 in the aggregate, in each case, net of any right of recovery under any insurance in relation to such Legal Proceeding and does not impose any non-monetary obligations on the Company or its Affiliates (including Parent and its Affiliates following the Closing); or (ii) is settled in compliance with Section 6.14;
(k) change the Company’s or its Subsidiaries’ methods, principles or practices of financial accounting or annual accounting period in any material respect, except as required by GAAP, Regulation S-X of the Exchange Act (or any interpretation thereof), or by any Governmental Authority or applicable Law;
(l) (i) make, change or revoke any material Tax election or change any material aspect of its method of Tax accounting; (ii) settle or compromise any material Tax claim or assessment; (iii) enter into any “closing agreement” within the meaning of Section 7121 of the Code (or any similar provision of state, local or non-U.S. Law), with respect to any material Tax or request any material Tax ruling; or (iv) surrender any right to claim a material Tax refund;
(m) incur or commit to incur any capital expenditures other than (i) consistent with the capital expenditure budget for the fiscal years 2019 and 2020, set forth in Section 5.2(m) of the Company Disclosure Letter or (ii) pursuant to obligations imposed by any Material Contract in effect as of the date of this Agreement;
(n) (i) assign, waive any material right of the Company under, materially modify or amend in a manner adverse to the Company, or terminate (other than any Material Contract that has expired in accordance with its terms) any Material Contract or Lease or any right under any Material Contract or Lease, or (ii) enter into any Contract that would constitute a Material Contract or Lease if entered into on the date hereof except, in each case, in the ordinary course of business consistent with past practice (other than Material Contracts of a type described in clause (ii) of the definition of “Material Contract”);
(o) enter into any Contract that involves, establishes or governs a material joint venture, profit sharing, partnership, joint development, strategic alliance or other similar agreement;
(p) unless replaced with a comparable coverage, terminate or fail to use reasonable best efforts to exercise renewal rights with respect to any material insurance policy;
(q) other than with respect to the matters set forth in Section 5.2(g), engage in any transaction with, or enter into any Contract or understanding with, any Affiliate of the Company or other Person covered by Item 404 of Regulation S-K promulgated by the SEC that would be required to be disclosed pursuant to Item 404;
(r) effectuate any action that would trigger notice obligations under WARN;
(s) acquire any interest in any Person or any division, assets, properties, businesses or equity securities thereof (including by merger, consolidation or acquisition of stock or assets), other than (i) in or from any wholly owned Subsidiary of the Company, (ii) in the ordinary course of business or (iii) that do not exceed $2,000,000 individually or $10,000,000 in the aggregate;
(t) sell, assign, license, lease, transfer, abandon or otherwise dispose of, or create any lien on (other than any Permitted Lien), or otherwise dispose of, any of the Company’s or its Subsidiaries’ assets (other than Intellectual Property), other than such sales, assignments, licenses, leases, transfers, liens or other dispositions that (i) are in the ordinary course of business or (ii) have neither a fair market value of the assets nor an aggregate purchase price that exceeds $2,500,000 individually or $10,000,000 in the aggregate;
(u) sell, assign, license, lease, transfer, abandon, dedicate to the public, or otherwise dispose of any rights to any material Company Intellectual Property (except for non-exclusive licenses or rights granted in the ordinary course of business and other than the license of the Company’s enzyme portfolio in the ordinary course of business consistent with past practice);
(v) waive the restrictive covenant obligations of any officer or employee of the Company or any of its Subsidiaries whose annual base compensation in excess of $200,000; or
(iw) enter into, authorize any of, agree, resolve, authorize resolve or commit to take any action of the actions prohibited by this Section 5.2.
Appears in 1 contract
Samples: Merger Agreement (Cambrex Corp)
Forbearance Covenants. Except (a) as expressly contemplated by this Agreement, (bi) as set forth in Section 5.1 or Section 5.2 of the Company Disclosure Letter, ; (c) as required by applicable Law, or (dii) as approved in advance in writing by the Purchaser Parent (which approval will not be unreasonably withheld, conditioned or delayed); or (iii) as expressly contemplated by the terms of this Agreement, at all times during the period from commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant to Article IX VIII and the ClosingEffective Time, the Company will not, and will not permit any of its Subsidiaries Subsidiaries, to, directly or indirectly:
(a) take amend the Charter, the Bylaws or any action set forth in Section 4.1 of the Stockholders Agreementother similar organizational document;
(b) acquire propose or agree to acquireadopt a plan of complete or partial liquidation, directly or indirectly, by purchasedissolution, merger, consolidation consolidation, restructuring, recapitalization or otherwise, equity or assets constituting all or substantially all of the business of (or any division of the business of) another Personother reorganization;
(c) issue, sell, assign, transfer, license, sublicense, abandon, permit to lapse, grant a covenant not to xxx, or otherwise dispose of any material Intellectual Property (other than non-exclusive licenses or sublicenses granted in the ordinary course of business);
(d) (i) authorize for issuance, issue, deliver, sell or transfer deliver or agree or commit to issue, deliver, sell or transfer deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities, except (A) for the issuance and sale of shares of Company Common Stock pursuant to Company Options or Company Stock-Based Awards outstanding as of the Capitalization Date in accordance with their terms; (B) in connection with agreements in effect on the date of this Agreement; or (C) as contemplated by Section 5.2(g);
(d) directly or indirectly acquire, repurchase or redeem any securities, except for (A) repurchases of Company Securities pursuant to the terms and conditions of Company Stock-Based Awards outstanding as of the date of this Agreement in accordance with their terms as of the date of this Agreement, or (B) transactions between the Company and any of its direct or indirect Subsidiaries;
(e) (A) adjust, split, combine or reclassify any shares of capital stock of stock, or other equity interest issue or convertible security in the Company authorize or any of its Subsidiaries or other rights of any kind to acquire, any shares of capital stock of or any other equity interest in the Company or any of its Subsidiaries, other than (x) propose the issuance of any other Company Securities in respect of, in lieu of or in substitution for, shares of its capital stock or other equity interests pursuant to or voting interest; (B) declare, set aside or pay any Employee Plan or (y) the issuance of capital stock dividend or other equity interests from any wholly owned Subsidiary to the Company distribution (whether in cash, shares or property or any other wholly owned Subsidiary combination thereof) in respect of the Company, (ii) amend or modify any term or provision of any of the Company’s outstanding equity securities or (iii) accelerate or waive any restrictions pertaining to the vesting of any Company equity-based awards or warrants or other rights of any kind to acquire any shares of capital stock or other equity interests or voting interest, or make any other actual, constructive or deemed distribution in the Company;
(e) propose or commit to reclassify, combine, split or subdivide any capital stock respect of the Company or issue or authorize the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of capital stock or other equity or voting interest, except for cash dividends made by any direct or indirect wholly owned Subsidiary of the Company to the Company or any one of its other wholly owned Subsidiaries, except for, with respect to ; (C) pledge or encumber any Subsidiary shares of its capital stock or other equity or voting interest; or (D) modify the Company, terms of any intercompany restructuring, recapitalization shares of its capital stock or similar transaction that will not have a Company Material Adverse Effectother equity or voting interest;
(f) enter into(A) incur, amend assume or terminate suffer any Contract with Starboard Value LP Indebtedness (including any long-term or short-term debt) or issue any of its Affiliates;
debt securities, except (g1) except as required under applicable Law or the terms of any Employee Plan existing as of the date of this Agreement, (i) increase the compensation or benefits payable to any current or former director or executive officer of the Company or any employee of the Company whose annual base salary is at least $300,000 (in each case, other than annual merit increases for trade payables incurred in the ordinary course of business; and (2) for loans or advances to direct or indirect wholly owned Subsidiaries of the Company; (iiB) enter into any newassume, or amend any existing, employment, severance, change in control, retention, bonus guarantee, endorse or collective bargaining agreement otherwise become liable or similar agreement responsible (whether directly, contingently or arrangement;
otherwise) for the obligations of any other Person, except with respect to obligations of direct or indirect wholly owned Subsidiaries of the Company; (iC) make any loans, advances or capital contributions to, or investments in, any other Person, except for (a) extensions of credit to customers in the ordinary course of business; and (b) advances to directors, officers and other employees for travel and other business-related expenses, in each case in the ordinary course of business and in compliance in all material respects with the Company’s policies related thereto; or (D) acquire, lease, license, sell, abandon, transfer, assign, guarantee, exchange, mortgage, pledge or otherwise encumber any assets, tangible or intangible, or create or suffer to exist any lien thereupon (other than investments by Permitted Liens), in each case in excess of $250,000 individually, other than the Company sale, lease or a wholly owned Subsidiary licensing of products or services of the Company and its Subsidiaries in the ordinary course of business and any capital expenditures permitted by (or consented to a wholly owned Subsidiary by Parent) under Section 5.2(k);
(g) (A) enter into, adopt, amend (including accelerating the vesting), modify or terminate any material bonus, profit sharing, compensation, severance, termination, option, appreciation right, performance unit, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, severance or other Employee Plan or employee benefit agreement, trust, plan, fund or other arrangement for the compensation, benefit or welfare of any director, officer or employee in any manner; (B) increase the Company compensation of any director, officer or the Company employee, pay any special bonus or advances of expenses special remuneration to any director, officerofficer or employee, employee or agent pay any benefit not required by (or accelerate the time of the Company in connection with advancement obligations payment or vesting of any payment becoming due under) any Employee Plan as in effect on as of the date of this Agreement, except in the case of each of (iiA) incurand (B), assume (1) as may be required by applicable law; (2) in connection with any new employee hires in the ordinary course of business and consistent with past practice and whose annual salary is less than $250,000; or modify (3) for increases in compensation for employees below the level of vice president to the extent that such increases are in the ordinary course of business and consistent with past practice (it being understood that these exceptions will not apply to any actions otherwise prohibited by Section 5.2(c); or (C) enter into any change in control, severance or similar agreement or any retention or similar agreement with any officer, employee, director or independent contractor;
(h) settle, release, waive or compromise any pending or threatened material Legal Proceeding or other claim, except for the settlement of any Legal Proceedings or other claim that is (A) reflected or reserved against in the Audited Company Balance Sheet; (B) for solely monetary payments of no more than $50,000 individually and $100,000 in the aggregate; or (C) settled in compliance with Section 6.15;
(i) except as required by applicable law or GAAP, (A) revalue in any material indebtedness respect any of its properties or assets, including writing-off notes or accounts receivable, other than in the ordinary course of business; or (iiiB) assumemake any change in any of its accounting principles or practices;
(A) make or change any material Tax election; (B) settle, guaranteeconsent to or compromise any material Tax claim or assessment or surrender a right to a material Tax refund; (C) consent to any extension or waiver of any limitation period with respect to any material Tax claim or assessment; (D) file an amended Tax Return that could materially increase the Taxes payable by the Company or its Subsidiaries; or (E) enter into a closing agreement with any Governmental Authority regarding any material Tax;
(k) (A) incur or commit to incur any capital expenditures other than (1) consistent with the capital expenditure budget set forth in Section 5.2(k) of the Company Disclosure Letter; or (2) to the extent that such capital expenditures do not exceed $1,000,000 individually or $5,000,000 in the aggregate; (B) enter into, endorsemodify, xxxxx x xxxx amend or terminate any (a) Contract (other than any Material Contract) that if so entered into, modified, amended or terminated would have a Permitted LienCompany Material Adverse Effect; or (b) on any Material Contract except in the ordinary course of the Company’s assets as security business; (C) maintain insurance at less than current levels or otherwise become liable for indebtedness in a manner inconsistent with past practice; (D) engage in any transaction with, or enter into any agreement, arrangement or understanding with, any Affiliate of another Person (excluding the Company or other Person covered by Item 404 of Regulation S-K promulgated by the SEC that would be required to be disclosed pursuant to Item 404; (E) effectuate a “plant closing,” “mass layoff” (each as defined in WARN) or other employee layoff event affecting in whole or in part any site of its Subsidiariesemployment, facility, operating unit or employee; (F) grant any material refunds, credits, rebates or other allowances to any end user, customer, reseller or distributor, in each case other than in the ordinary course of business; or (G) waive, release, grant or transfer any right of material value other than in the ordinary course of business;
(l) acquire (by merger, consolidation or acquisition of stock or assets) any other Person or any material equity interest therein or enter into any joint venture, legal partnership (excluding, for avoidance of doubt, strategic relationships, alliances, reseller agreements and similar commercial relationships), limited liability corporation or similar arrangement with any third Person;
(m) enter into any collective bargaining agreement or agreement to form a work council or other agreement with any labor organization or works council (except to the extent required by applicable Legal Requirements);
(n) adopt or implement any stockholder rights plan or similar arrangement, in each case, applicable to the Merger or any other transaction consummated pursuant to Parent’s rights under Section 5.3(d)(i)(2) or Section 5.3(d)(ii)(3); or
(io) agree, resolveenter into, authorize any of, or agree or commit to enter into a Contract to take any action of the actions prohibited by this Section 5.2. For purposes of this Section 5.2, no breach (other than a willful breach) shall be deemed a failure to perform “in all material respects” for purposes of Section 7.2(b) unless such breach, individually or together with other breaches of this Section 5.2, results or would reasonably be expected to result in additional cost, expense or liability to Company, Parent and their Affiliates that is more than $3,000,000 (provided, that, for the avoidance of doubt, the effect of any such breach may be taken into account, if and to the extent applicable, in determining the satisfaction of the condition set forth in Section 7.2(a)(iii)).
Appears in 1 contract
Samples: Merger Agreement (Cvent Inc)
Forbearance Covenants. Except (a) as expressly contemplated by this Agreement, (bA) as set forth in Section 5.1 or Section 5.2 of the Company Disclosure Letter; (B) for any actions taken in good faith to respond to any COVID-19 Measures (it being understood that prior to taking any material actions in reliance on this clause (B), the Company will use its reasonable best efforts to provide reasonable advance notice to, and consult, with Parent (cif reasonably practicable and legally permissible) prior to taking such actions); (C) as required by applicable Law, or ; (dD) as approved by Parent in advance in writing by the Purchaser (writing, which approval will not be unreasonably withheld, conditioned or delayed); or (E) as otherwise expressly contemplated by the terms of this Agreement, during the period from the execution and delivery of this Agreement until the earlier to occur of the termination of this Agreement pursuant to Article IX and the ClosingPre-Closing Period, the Company will not, and will not permit any of its Subsidiaries Subsidiaries, to, directly or indirectly:
(a) take amend or otherwise change the Charter, the Bylaws or any action set forth in Section 4.1 of the Stockholders Agreementother similar organizational document;
(b) acquire propose or agree to acquireadopt a plan of complete or partial liquidation, directly or indirectly, by purchasedissolution, merger, consolidation consolidation, restructuring, recapitalization or otherwise, equity or assets constituting all or substantially all of the business of (or any division of the business of) another Personother reorganization;
(c) issue, sell, assigngrant, transfer, license, sublicense, abandon, permit to lapse, grant a covenant not to xxx, pledge or otherwise dispose of any material Intellectual Property (other than non-exclusive licenses or sublicenses granted in the ordinary course of business);
(d) (i) authorize for issuance, issue, deliver, sell or transfer or agree or commit to issue, deliversell, sell grant, pledge or transfer deliver any of its capital stock or other securities (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase, other instruments convertible or exchangeable or exercisable for any of its capital stock or other securities or otherwise), except (i) for the issuance, delivery or sale of shares of capital Company Common Stock to the extent required pursuant to Company Options or Company Warrants in accordance with their terms as in effect as of the date hereof; or (ii) as contemplated by Section 5.2(i);
(d) directly or indirectly acquire, repurchase or redeem any of its securities or offer to acquire, repurchase or redeem any of its securities, except (i) pursuant to the terms and conditions of Company Options or Company Warrants in accordance with their terms as in effect on the date hereof; or (ii) in connection with transactions between the Company and any of its wholly owned Subsidiaries;
(e) acquire, directly or indirectly, (by merger, consolidation or acquisition of stock or assets) any equity interests in any other Person or make any material investment in any other Person (other than a wholly owned Subsidiary of the Company) or enter into any joint venture, partnership, limited liability company or similar arrangement with any Person (other equity interest or convertible security in than the Company or any of its Subsidiaries wholly owned Subsidiaries);
(f) acquire, or other rights agree to acquire fee ownership (or its jurisdictional equivalent) of any kind to acquirereal property;
(g) (i) adjust, split, subdivide, combine or reclassify any shares of capital stock of or any other equity interest in the Company or any of its Subsidiaries, other than (x) the issuance of capital stock or other equity interests pursuant to any Employee Plan or (y) the issuance of capital stock or other equity interests from any wholly owned Subsidiary to the Company or any other wholly owned Subsidiary of the Company, interests; (ii) amend declare, set aside, establish a record date for, authorize or modify pay any term or provision of any of the Company’s outstanding equity securities or (iii) accelerate or waive any restrictions pertaining to the vesting of any Company equity-based awards or warrants dividend or other rights distribution (whether in cash, shares or property or any combination thereof) in respect of any kind to acquire any shares of capital stock or other equity interests or voting interest, or make any other actual, constructive or deemed distribution in respect of the Companyshares of capital stock or other equity or voting interest, except for cash dividends made by any wholly owned Subsidiary of the Company to the Company or one of its other wholly owned Subsidiaries; (iii) pledge or encumber any shares of its capital stock or other equity or voting interest; or (iv) modify the terms of any shares of its capital stock or other equity or voting interest;
(eh) propose (i) incur or commit to reclassifyassume any Indebtedness or issue any debt securities, combine, split except (A) for loans or subdivide any capital stock advances between wholly owned Subsidiaries of the Company 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 between the Company and its wholly owned Subsidiaries or any of its Subsidiaries, except for, with respect (B) obligations incurred pursuant to any Subsidiary of the Company, any intercompany restructuring, recapitalization or similar transaction that will not have a Company Material Adverse Effect;
(f) enter into, amend or terminate any Contract with Starboard Value LP or any of its Affiliates;
(g) except as required under applicable Law or the terms of any Employee Plan existing as of the date of this Agreement, (i) increase the compensation or benefits payable to any current or former director or executive officer of the Company or any employee of the Company whose annual base salary is at least $300,000 (in each case, other than annual merit increases business credit cards in the ordinary course of business) or ; (ii) enter into any newassume, or amend any existing, employment, severance, change in control, retention, bonus guarantee, endorse or collective bargaining agreement otherwise become liable or similar agreement responsible (whether directly, contingently or arrangement;
otherwise) for the obligations of any other Person, except with respect to obligations of wholly owned Subsidiaries of the Company otherwise permitted under this Agreement; (iiii) make any loans, advances or capital contributions to, or investments in, any other Person, other than investments by the Company except for loans or a advances between wholly owned Subsidiary of the Company to a wholly owned Subsidiary Subsidiaries of the Company or between the Company or advances of expenses to any director, officer, employee or agent and its wholly owned Subsidiaries and capital contributions in wholly owned Subsidiaries of the Company; or (iv) mortgage, pledge or otherwise encumber any assets, tangible or intangible, or create any Lien thereon (other than Permitted Liens);
(i) except (i) in order to comply with applicable Law, (ii) as required pursuant to the terms of any Company in connection with advancement obligations Benefit Plan as in effect on the date of this Agreement, (ii) incur, assume or modify any material indebtedness or (iii) assumeas expressly contemplated in this Agreement (including as permitted pursuant to this Section 5.2(i)) (A) establish, guaranteeadopt, endorseenter into, xxxxx x xxxx terminate or amend, or take any action to accelerate the vesting of any compensation, or benefits under, any Company Benefit Plan; (B) grant to any Service Provider whose annual cash compensation exceeds $250,000 any increase in cash compensation, bonus or other benefits; (C) grant to any Service Provider any new or increased change in control, retention, severance or termination pay; (D) enter into any employment, consulting, change in control, retention, severance or termination agreement with any Service Provider (other than employment agreements with newly-hired non-officer employees or consultants in the ordinary course of business and consistent with past practice or termination agreements to obtain a Permitted Lien) on any release of claims from terminating employees for whom no prior severance arrangement is in place, in each case, in an amount not to exceed, and otherwise in a manner and form consistent with the disclosures set forth in Section 6.9 of the Company’s assets as security Company Disclosure Letter); or otherwise become liable for indebtedness (E) terminate any employee of another Person (excluding the Company or any of its Subsidiaries with an annual cash compensation in excess of $250,000 other than terminations for cause;
(j) acquire, sell, lease, license, sublicense, pledge, covenant not to xxx or xxxxx any release under, abandon, cancel, forfeit, dedicate to the public, fail to maintain, fail to prosecute, allow to lapse (other than any Patent expiring at the end of its statutory term in relation to which no patent term extension or supplementary protection certificate is available, and other than abandoning, forfeiting, failing to maintain, failing to prosecute or allowing to lapse, in the ordinary course of business consistent with past practice, any Company Owned Intellectual Property that would not be material to the Company and its Subsidiaries taken as a whole) assign, transfer, disclose, intentionally create any Lien on, or otherwise dispose of or grant any rights under any Company Intellectual Property, or amend, renew, terminate, sublicense, assign or modify any license or other agreement entered into by the Company or any of its Subsidiaries with respect to any Company Licensed Intellectual Property, other than the grant by the Company or any of its Subsidiaries of nonexclusive licenses to third party contractors, customers, distributors or service providers in the ordinary course of business consistent with past practice under Company Intellectual Property that is not material to the Company and its Subsidiaries taken as a whole;
(k) disclose any Trade Secrets that are material to the Company and its Subsidiaries), taken as a whole, and contained in any Company Intellectual Property to any third party, other than under confidentiality obligations binding on such third party;
(l) initiate, settle, release, waive or compromise any pending or threatened Legal Proceeding, including any claim that provides for any injunctive or other non-monetary relief, except for the settlement of any Legal Proceedings (i) (1) solely for monetary damages in an amount that do not exceed $300,000 individually or $600,000 in the aggregate and (2) without an admission of guilt; oror (ii) settled in compliance with Section 6.13;
(m) except as required by GAAP, make any change in any of its accounting principles or practices;
(i) agreemake, resolverescind or change any material Tax election; (ii) settle, consent to or compromise any material Tax claim or assessment or surrender a right to a material Tax refund; (iii) consent to any extension or waiver of any limitation period with respect to any material Tax claim or assessment; (iv) make any material change to any accounting method or accounting period used for Tax purposes that has a material effect on Taxes; (v) file a material amended Tax Return; (vi) enter into a closing agreement with any Governmental Authority regarding any material Tax liability or assessment or (vii) take any position on any material Tax Return that is inconsistent with past practice or positions taken in preparing or filing similar Tax Returns in prior periods;
(o) incur, authorize or commit to incur any capital expenditures other than (A) expenditures that do not exceed $500,000 individually or $1,000,000 in the aggregate; or (B) in accordance with the capital budget of the Company and its Subsidiaries set forth on Section 5.2(o) of the Company Disclosure Letter;
(p) (A) amend or modify in any material respect, renew, waive any material rights under or terminate (other than renewal or termination in accordance with the terms of an existing Material Contract), any Material Contract; or (B) enter into any contract that would constitute a Material Contract if it were in effect on the date of this Agreement;
(q) maintain insurance at less than current levels or otherwise in a manner inconsistent with past practice;
(r) engage in any transaction with, or enter into any agreement, arrangement or understanding with, any Affiliate of the Company or other Person covered by Item 404 of Regulation S K promulgated by the SEC that would be required to be disclosed pursuant to Item 404;
(s) effectuate a “plant closing,” “mass layoff” (each as defined in the United States Worker Adjustment and Retraining Notification Act) or other employee layoff event affecting in whole or in part any site of employment, facility, operating unit or employee;
(t) adopt any stockholder rights plan or similar arrangement;
(u) create any Subsidiary of the Company or enter into a new line of business; or
(v) authorize, enter into or agree or commit to enter into a Contract to take any action of the actions prohibited by this Section 5.2.
Appears in 1 contract
Forbearance Covenants. Except (a) as expressly contemplated by this Agreement, (b) as set forth in Section 5.1 or Section 5.2 of During the Company Disclosure Letter, (c) as required by applicable Law, or (d) as approved in advance in writing by the Purchaser (which approval will not be unreasonably withheld, conditioned or delayed), during the period from the execution and delivery of this Agreement until the earlier to occur of the termination of this Agreement pursuant to Article IX and the ClosingPre-Closing Period, the Company will not, and will not permit any of its Subsidiaries to, directly or indirectly:to (in each case subject to the Covenant Exceptions (other than clause (i) of the Covenant Exceptions)):
(a) take amend or otherwise change the Charter, the Bylaws or any action set forth in Section 4.1 of the Stockholders Agreementother similar organizational document;
(b) acquire except as permitted by Section 5.4, propose or agree to acquireadopt a plan of complete or partial liquidation, directly or indirectly, by purchasedissolution, merger, consolidation consolidation, restructuring, recapitalization or otherwise, equity or assets constituting all or substantially all of the business of (or any division of the business of) another Personother reorganization;
(c) sell, assign, transfer, license, sublicense, abandon, permit to lapse, grant a covenant not to xxx, or otherwise dispose of any material Intellectual Property (other than non-exclusive licenses or sublicenses granted in the ordinary course of business);
(d) (i) authorize for issuance, issue, deliver, sell or transfer deliver, or agree or commit to issue, sell or deliver, any of its equity securities (whether through the issuance or granting of options, restricted stock units, warrants, commitments, subscriptions, rights to purchase or otherwise), except, in each case, (i) for the issuance, delivery or sale of (or agreement or commitment to issue, sell or transfer any deliver) shares of capital stock Company Common Stock pursuant to Company Equity Awards outstanding as of the date of this Agreement or other pursuant to the ESPP, in each case in accordance with their terms; (ii) in connection with agreements in effect on the date of this Agreement (including any offer letters or similar agreements entered into or extended as of the date of this Agreement); (iii) as contemplated by Section 5.2(i); or (iv) for the issuance, delivery or sale of (or agreement to issue, sell or deliver) equity interest or convertible security in securities by any Subsidiary to the Company or another Subsidiary;
(d) acquire, repurchase or redeem any of its equity securities, except, in each case, (i) pursuant to the terms and conditions of Company Equity Awards outstanding as of the date of this Agreement in accordance with their terms as in effect as of the date of this Agreement or to otherwise satisfy Tax obligations with respect to awards granted pursuant to Company Equity Plans or to pay the exercise price of Company Options, in each case in accordance with the existing terms of the applicable Company Equity Plan as in effect on the date of this Agreement; or (ii) for transactions between the Company and any of its Subsidiaries or other rights among any Subsidiaries of any kind to acquire, any shares of capital stock of or any other equity interest in the Company or any of its Subsidiaries, other than (x) the issuance of capital stock or other equity interests pursuant to any Employee Plan or (y) the issuance of capital stock or other equity interests from any wholly owned Subsidiary to the Company or any other wholly owned Subsidiary of the Company, (ii) amend or modify any term or provision of any of the Company’s outstanding equity securities or (iii) accelerate or waive any restrictions pertaining to the vesting of any Company equity-based awards or warrants or other rights of any kind to acquire any shares of capital stock or other equity interests in the Company;
(e) propose (i) adjust, split, subdivide, combine or commit to reclassify, combine, split or subdivide 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, shares of capital stock of the Company or reclassify any of its Subsidiariescapital stock or other equity or voting interests; (ii) declare, set aside, establish a record date for, authorize or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any shares of its capital stock or other equity or voting interests, or make any other actual, constructive or deemed distribution in respect of its capital stock or other equity or voting interests, except for, with respect to for dividends or other distributions made by any Subsidiary of the Company, Company to the Company or one of its other Subsidiaries; (iii) pledge or encumber any intercompany restructuring, recapitalization of its capital stock or similar transaction that will not have a Company Material Adverse Effectother equity or voting interests (other than Liens described in clause (vii) of the definition of Permitted Encumbrances); or (iv) modify the terms of any of its capital stock or other equity or voting interests;
(f) enter intoacquire or agree to acquire (by merger, amend consolidation or terminate acquisition of stock or assets) any Contract with Starboard Value LP third Person or any of its Affiliatesmaterial equity interest in such Person, or enter into any material joint venture, partnership or similar arrangement with any third Person;
(g) except as required under applicable Law acquire, or the terms agree to acquire, fee ownership (or its jurisdictional equivalent) of any Employee Plan existing as of the date of this Agreement, real property;
(h) (i) increase incur or assume any indebtedness for borrowed money (including receivable financing arrangements) or issue any debt securities, except, in each case, (A) short-term debt incurred to fund operations of the compensation business in the ordinary course of business not in excess of $1,000,000 in the aggregate; (B) for loans or benefits payable to any current or former director or executive officer advances between Subsidiaries of the Company or any employee of between the Company whose annual base salary is at least $300,000 and its Subsidiaries; (in each case, other than annual merit increases C) obligations incurred pursuant to business credit cards in the ordinary course of business; or (D) or pursuant to the Credit Agreement; (ii) enter into any newassume, or amend any existing, employment, severance, change in control, retention, bonus guarantee, endorse or collective bargaining agreement otherwise become liable or similar agreement responsible (whether directly, contingently or arrangement;
otherwise) for the obligations of any third Person, except with respect to obligations of the Company or its Subsidiaries; (iiii) make any loans, advances or capital contributions to, or investments in, any other third Person, except, in each case, for (A) extensions of credit to customers in the ordinary course of business; (B) advances or reimbursable expenses to directors, officers and other than investments by employees, in each case in the Company ordinary course of business; and (C) for loans or a wholly owned Subsidiary of the Company to a wholly owned Subsidiary advances between Subsidiaries of the Company or between the Company and its Subsidiaries and capital contributions in or advances of expenses to any director, officer, employee or agent Subsidiaries of the Company; or (iv) mortgage, pledge or otherwise encumber any assets, tangible or intangible, or create any lien thereon (other than Permitted Encumbrances);
(i) except (i) in order to comply with applicable Law, (ii) as required pursuant to the terms of any Company in connection with advancement obligations Employee Plan in effect on the date of this Agreement, (ii) incur, assume or modify any material indebtedness or (iii) assumeas provided in Section 5.2(i) of the Company Disclosure Letter (A) establish, guaranteeadopt, endorseenter into, xxxxx x xxxx terminate or amend in any material respect any Company Employee Plan (or any plan, policy, agreement, Contract or arrangement that would be a Company Employee Plan if in effect on the date of this Agreement) or take any action to accelerate the vesting, payment or funding of any compensation, or benefits under, any Company Employee Plan (or any plan, policy, agreement, Contract or arrangement that would be a Company Employee Plan if in effect on the date of this Agreement); (B) grant to any employee of an Acquired Company any increase or decrease in cash compensation, bonus, incentive or material fringe or other material benefits; (C) grant to any Company Associate any change in control, retention, transaction, stay bonus, tax gross-up, special remuneration, equity or equity-based award, bonus, severance or termination pay (other than a Permitted Lienpayments made pursuant to agreements in effect on the date of this Agreement and set forth in Section 3.16(k) on of the Company Disclosure Letter); or (D) terminate, engage or hire any employee or individual service provider of an Acquired Company, other than terminations for cause;
(j) enter into, terminate or amend any collective bargaining, union or works council agreement or other Contract with any employee representative body;
(k) xxxxxx, release, waive or compromise any pending or threatened material Legal Proceeding, except for the settlement of any Legal Proceedings (i) solely for monetary damages in an amount not in excess of $1,000,000 in the aggregate; or (ii) settled in compliance with Section 6.15;
(l) except as required by applicable Law or GAAP, (i) other than in the ordinary course of business, revalue in any material respect any of the Company’s assets as security its properties or assets, including writing-off notes or accounts receivable; or (ii) make any change in any of its accounting principles or practices;
(m) (i) make or change any material Tax election; (ii) settle or compromise any material Tax claim or assessment; (iii) consent to any extension or waiver of any limitation period with respect to any material Tax claim or assessment; (iv) amend, refile, modify, or otherwise become liable change any previously filed material Tax Return; (v) surrender any right to claim a material Tax refund; (vi) fail to pay any material Tax that becomes due and payable except to the extent such Tax is contested in good faith; or (vii) enter into a closing agreement with any Governmental Authority regarding any material Tax;
(n) (i) incur, authorize or commit to incur any material capital expenditures other than (A) consistent in all material respects with the capital expenditure budget set forth in Section 5.2(n) of the Company Disclosure Letter; (B) pursuant to obligations imposed by Material Contracts or Leases; or (C) pursuant to agreements in effect prior to the date of this Agreement; (ii) enter into any Contract which if entered into prior to the date hereof would be a Material Contract of the type described in (x) clauses (iv), (vii), (xiv), (xv) or (xvii) of Section 3.9, except in the ordinary course of business (including as to terms of such Contracts), (y) clauses (vi)(A), (viii), (ix), (x), (xi), (xiii), and (xviii) of Section 3.9 or (z) as set forth in Section 5.2(n) of the Company Disclosure Letter; (iii) modify or amend any material rights under any Material Contract or terminate any Material Contract (other than any Material Contract that has expired in accordance with its terms), in each case in a manner that is materially adverse to the Company and its Subsidiaries, taken as a whole; (iv) maintain insurance at less than current levels or otherwise in a manner inconsistent with past practice; (v) engage in any transaction with, or enter into any agreement, arrangement or understanding with, any Affiliate of the Company or other Person covered by Item 404 of Regulation S-K promulgated by the SEC that would be required to be disclosed pursuant to Item 404; (vi) effectuate a “plant closing,” “mass layoff” (each as defined under WARN) or other employee layoff event affecting in whole or in part any site of employment, facility, operating unit or employee; or (vii) grant any material refunds, credits, rebates or other allowances to any end user, customer, reseller or distributor, in each case other than in the ordinary course of business;
(o) except to the extent necessary to preserve enforceability of a Contract, in the ordinary course of business in connection with the termination of an employee or individual service provider or as otherwise required by applicable Law, waive or release any noncompetition, nonsolicitation, nondisclosure, noninterference, nondisparagement, or other restrictive covenant obligation of any service provider;
(p) abandon, let lapse or cancel any material Company IP;
(q) disclose or abandon any material Trade Secrets, except in the ordinary course of business, or to the extent not economically desirable to maintain for indebtedness the conduct of another the business of the Company and its Subsidiaries, or disclose any source code for any Company Software to any Person except to a third-party service provider or other agent obligated in writing to (excluding i) maintain the confidentiality of, and not disclose, such source code; and (ii) use such source code only in the provision of services to the Company or any of its Subsidiaries;
(r) make any material change to the Company’s or any of its Subsidiaries’ policies or procedures with respect to their Processing of Personal Data, except to remediate any privacy or security issue that the Company or any of its Subsidiaries reasonably believes is material, to comply with applicable Privacy and Data Security Requirements (but with respect to Privacy and Data Security Requirements that consist of contractual obligations, solely those that are in effect during the Pre-Closing Period (provided that any such contractual obligations entered into after the date hereof must be entered into in accordance with the terms of this Agreement and in the ordinary course of business)), or as otherwise directed or required by a Governmental Authority; or
(is) agreeenter into, resolve, authorize or agree or commit to enter into, a Contract to take any action of the actions prohibited by this Section 5.2.
Appears in 1 contract
Forbearance Covenants. Except (a) as expressly contemplated by this Agreement, (bi) as set forth in Section 5.1 or Section 5.2 of the Company Disclosure Letter, ; (c) as required by applicable Law, or (dii) as approved in advance in writing by the Purchaser Parent (which approval will not be unreasonably withheld, conditioned or delayed); or (iii) as expressly contemplated by the terms of this Agreement, at all times during the period from commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant to Article IX VIII and the ClosingEffective Time, the Company will not, and will not permit any of its Subsidiaries Subsidiaries, to, directly or indirectly:
(a) take amend the Charter, the Bylaws or any action set forth in Section 4.1 of the Stockholders Agreementother similar organizational document;
(b) acquire propose or agree to acquireadopt a plan of complete or partial liquidation, directly or indirectly, by purchasedissolution, merger, consolidation consolidation, restructuring, recapitalization or otherwise, equity or assets constituting all or substantially all of the business of (or any division of the business of) another Personother reorganization;
(c) issue, sell, assign, transfer, license, sublicense, abandon, permit to lapse, grant a covenant not to xxx, or otherwise dispose of any material Intellectual Property (other than non-exclusive licenses or sublicenses granted in the ordinary course of business);
(d) (i) authorize for issuance, issue, deliver, sell or transfer deliver or agree or commit to issue, deliver, sell or transfer deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities, except (A) for the issuance and sale of shares of Company Common Stock pursuant to Company Options or Company Stock-Based Awards outstanding as of the Capitalization Date in accordance with their terms; (B) in connection with agreements in effect on the date of this Agreement; or (C) as contemplated by Section 5.2(g);
(d) directly or indirectly acquire, repurchase or redeem any securities, except for (A) repurchases of Company Securities pursuant to the terms and conditions of Company Stock-Based Awards outstanding as of the date of this Agreement in accordance with their terms as of the date of this Agreement, or (B) transactions between the Company and any of its direct or indirect Subsidiaries;
(e) (A) adjust, split, combine or reclassify any shares of capital stock of stock, or other equity interest issue or convertible security in the Company authorize or any of its Subsidiaries or other rights of any kind to acquire, any shares of capital stock of or any other equity interest in the Company or any of its Subsidiaries, other than (x) propose the issuance of any other Company Securities in respect of, in lieu of or in substitution for, shares of its capital stock or other equity interests pursuant to or voting interest; (B) declare, set aside or pay any Employee Plan or (y) the issuance of capital stock dividend or other equity interests from any wholly owned Subsidiary to the Company distribution (whether in cash, shares or property or any other wholly owned Subsidiary combination thereof) in respect of the Company, (ii) amend or modify any term or provision of any of the Company’s outstanding equity securities or (iii) accelerate or waive any restrictions pertaining to the vesting of any Company equity-based awards or warrants or other rights of any kind to acquire any shares of capital stock or other equity interests or voting interest, or make any other actual, constructive or deemed distribution in the Company;
(e) propose or commit to reclassify, combine, split or subdivide any capital stock respect of the Company or issue or authorize the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of capital stock or other equity or voting interest, except for cash dividends made by any direct or indirect wholly owned Subsidiary of the Company to the Company or any one of its other wholly owned Subsidiaries, except for, with respect to ; (C) pledge or encumber any Subsidiary shares of its capital stock or other equity or voting interest; or (D) modify the Company, terms of any intercompany restructuring, recapitalization shares of its capital stock or similar transaction that will not have a Company Material Adverse Effectother equity or voting interest;
(f) enter into(A) incur, amend assume or terminate suffer any Contract with Starboard Value LP Indebtedness (including any long-term or short-term debt) or issue any of its Affiliates;
debt securities, except (g1) except as required under applicable Law or the terms of any Employee Plan existing as of the date of this Agreement, (i) increase the compensation or benefits payable to any current or former director or executive officer of the Company or any employee of the Company whose annual base salary is at least $300,000 (in each case, other than annual merit increases for trade payables incurred in the ordinary course of business; (2) for loans or advances to direct or indirect wholly owned Subsidiaries of the Company; (ii3) enter into any newfor obligations incurred pursuant to the Company’s trade receivables factoring facility in the ordinary course of business; and (4) pursuant to the Credit Agreement; (B) assume, or amend any existing, employment, severance, change in control, retention, bonus guarantee, endorse or collective bargaining agreement otherwise become liable or similar agreement responsible (whether directly, contingently or arrangement;
otherwise) for the obligations of any other Person, except with respect to obligations of direct or indirect wholly owned Subsidiaries of the Company; (iC) make any loans, advances or capital contributions to, or investments in, any other Person, except for (a) extensions of credit to customers in the ordinary course of business; and (b) advances to directors, officers and other employees for travel and other business-related expenses, in each case in the ordinary course of business and in compliance in all material respects with the Company’s policies related thereto; or (D) acquire, lease, license, sell, abandon, transfer, assign, guarantee, exchange, mortgage, pledge or otherwise encumber any assets, tangible or intangible, or create or suffer to exist any lien thereupon (other than investments by Permitted Liens);
(g) (A) enter into, adopt, amend (including accelerating the Company vesting), modify or a wholly owned Subsidiary terminate any material bonus, profit sharing, compensation, severance, termination, option, appreciation right, performance unit, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, severance or other Employee Plan or employee benefit agreement, trust, plan, fund or other arrangement for the compensation, benefit or welfare of any director, officer or employee in any manner; (B) increase the Company to a wholly owned Subsidiary compensation of the Company any director, officer or the Company employee, pay any special bonus or advances of expenses special remuneration to any director, officerofficer or employee, employee or agent pay any benefit not required by (or accelerate the time of the Company in connection with advancement obligations payment or vesting of any payment becoming due under) any Employee Plan as in effect on as of the date of this Agreement, except in the case of each of (iiA) incurand (B), assume or modify (1) as may be required by applicable law; (2) in connection with any material indebtedness new employee hires in the ordinary course of business and consistent with past practice and whose annual salary is less than $250,000; or (iii3) assumefor increases in compensation for employees below the level of vice president to the extent that such increases are in the ordinary course of business and consistent with past practice (it being understood that these exceptions will not apply to any actions otherwise prohibited by Section 5.2(c); or (C) enter into any change in control, guarantee, endorse, xxxxx x xxxx (other than a Permitted Lien) on any of the Company’s assets as security severance or otherwise become liable for indebtedness of another Person (excluding the Company similar agreement or any retention or similar agreement with any officer, employee, director or independent contractor;
(h) settle, release, waive or compromise any pending or threatened material Legal Proceeding or other claim, except for the settlement of its Subsidiaries)any Legal Proceedings or other claim that is (A) reflected or reserved against in the Audited Company Balance Sheet; oror (B) settled in compliance with Section 6.15;
(i) agreeexcept as required by applicable law or GAAP, resolve(A) revalue in any material respect any of its properties or assets, authorize including writing-off notes or accounts receivable, other than in the ordinary course of business; or (B) make any change in any of its accounting principles or practices;
(A) make or change any material Tax election; (B) settle, consent to or compromise any material Tax claim or assessment or surrender a right to a material Tax refund; (C) consent to any extension or waiver of any limitation period with respect to any material Tax claim or assessment; (D) file an amended Tax Return that could materially increase the Taxes payable by the Company or its Subsidiaries; or (E) enter into a closing agreement with any Governmental Authority regarding any material Tax;
(k) (A) incur or commit to take incur any action prohibited capital expenditures other than (1) consistent with the capital expenditure budget set forth in Section 5.2(k) of the Company Disclosure Letter; or (2) pursuant to obligations imposed by Material Contracts, in the case of this Section 5.2.clause (2), to the extent that such capital expenditures do not exceed $1,000,000 individually; (B) enter into, modify, amend or terminate any (a) Contract (other than any Material Contract) that if so entered into, modified, amended or terminated would have a Company Material Adverse Effect; or (
Appears in 1 contract
Forbearance Covenants. Except (a) as expressly contemplated by this Agreement, (bi) as set forth in Section 5.1 or Section 5.2 of the Company Disclosure Letter, ; (c) as required by applicable Law, or (dii) as approved in advance by Parent in writing by the Purchaser (which approval will not be unreasonably withheld, conditioned or delayed); or (iii) as expressly required by the terms of this Agreement or required by applicable Law or order, at all times during the period from commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant to Article IX VIII and the ClosingEffective Time, the Company will not, and will not permit any of its Subsidiaries Subsidiaries, to, directly or indirectly:
(a) take amend the Charter, the Bylaws, or any action set forth in Section 4.1 of the Stockholders Agreementother similar organizational documents;
(b) acquire propose or agree to acquireadopt a plan of complete or partial liquidation, directly or indirectly, by purchasedissolution, merger, consolidation consolidation, restructuring, recapitalization or otherwise, equity or assets constituting all or substantially all of the business of (or any division of the business of) another Personother reorganization;
(c) issue, sell, assign, transfer, license, sublicense, abandon, permit to lapse, grant a covenant not to xxx, or otherwise dispose of any material Intellectual Property (other than non-exclusive licenses or sublicenses granted in the ordinary course of business);
(d) (i) authorize for issuance, issueencumber, deliver, sell grant options or transfer rights to purchase or receive, pledge, dispose of or deliver or agree or commit to issue, deliver, sell or transfer deliver any shares Company Securities, except upon the exercise or settlement of, Company Options, Company RSUs or Company PSUs, in each case, outstanding as of capital stock the date of or other equity interest or convertible security in the Original Agreement;
(d) except for transactions solely among the Company and its Subsidiaries or solely among the Subsidiaries of the Company, directly or indirectly, reclassify, split, combine, subdivide or redeem, repurchase, purchase or otherwise acquire or amend the terms of, directly or indirectly, any of its Subsidiaries or other rights of any kind to acquire, any shares of capital stock of or any other equity interest in the Company or any of its Subsidiaries, other than (x) the issuance of ’ capital stock or other equity interests pursuant to any Employee Plan or voting interest, other than (yi) the issuance acquisitions of capital stock or other equity interests from any wholly owned Subsidiary shares of Company Common Stock in connection with the surrender of shares of Company Common Stock by holders of Company Options in order to pay the exercise price of such Company or any other wholly owned Subsidiary of the Company, Options; (ii) amend the withholding of shares of Company Common Stock to satisfy Tax obligations incurred in connection with the exercise of Company Options and the settlement of Company RSUs or modify any term or provision of any of the Company’s outstanding equity securities or Company PSUs; and (iii) accelerate the acquisition by the Company of Company Options, Company RSUs and Company PSUs in connection with the forfeiture of such awards, in each case, in accordance with their terms as of the date of the Original Agreement;
(e) (i) declare, set aside or waive pay any restrictions pertaining to the vesting of any Company equity-based awards or warrants dividend or other rights distribution (whether in cash, shares or property or any combination thereof) in respect of any kind to acquire any shares of capital stock or other equity interests or voting interest, or make any other actual, constructive or deemed distribution in the Company;
(e) propose or commit to reclassify, combine, split or subdivide any capital stock respect of the Company or issue or authorize the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of capital stock or other equity or voting interest, except for cash dividends made by any direct or indirect wholly owned Subsidiary of the Company to the Company, or any of its Subsidiaries, except for, with respect to any Subsidiary one of the Company, ’s other wholly owned Subsidiaries; or (ii) pledge or encumber any intercompany restructuring, recapitalization shares of its capital stock or similar transaction that will not have a Company Material Adverse Effectother equity or voting interests;
(f) enter into, amend or terminate any Contract with Starboard Value LP or any of its Affiliates;
(g) except as required under applicable Law or the terms of any Employee Plan existing as of the date of this Agreement, (i) increase the compensation incur or benefits payable assume any Indebtedness (including any long-term or short-term debt) or issue any debt securities in excess of $5,000,000, except for (A) trade payables, obligations pursuant to any current business credit cards and liabilities pursuant to or former director in connection with letters of credit or executive officer of the Company bank’s acceptances or any employee of the Company whose annual base salary is at least $300,000 (similar items, in each case, other than annual merit increases incurred in the ordinary course of business; (B) Indebtedness under the Company Credit Agreement incurred in the ordinary course of business in an amount up to $5,000,000; and (C) intercompany loans or advances between or among the Company and its direct or indirect wholly owned Subsidiaries; or (ii) enter into any newassume, or amend any existing, employment, severance, change in control, retention, bonus guarantee, endorse or collective bargaining agreement otherwise become liable or similar agreement responsible (whether directly, contingently or arrangementotherwise) for the obligations of any other Person, except solely with respect to obligations of any direct or indirect wholly owned Subsidiaries of the Company;
(ig) mortgage or pledge any of its and its Subsidiaries’ assets, tangible or intangible, or create or incur any Lien thereupon (other than Permitted Liens), other than in in the ordinary course of business or in connection with financing transactions permitted by Section 5.2(f) or consented to by Parent;
(h) make any loans, advances or capital contributions to, or investments in, any other Person, except for (i) extensions of credit to customers in the ordinary course of business; (ii) advances to directors, officers and other than investments by employees for business-related travel and other business-related expenses, in each case, in the ordinary course of business and in compliance in all material respects with the Company Group’s policies related thereto; and (iii) loans, advances or a other extensions of credit or capital contributions to, or investments in, any direct or indirect wholly owned Subsidiary Subsidiaries of the Company;
(i) lease, sublease, license, sublicense, sell, transfer, assign, pledge, encumber, abandon, allow to lapse or otherwise dispose of any (i) Company Intellectual Property material to the business of the Company Group, or (ii) assets, other than (A) the sale, lease or licensing of Company Products in the ordinary course of business; (B) granting non-exclusive licenses of Company Intellectual Property in the ordinary course of business; (C) pursuant to a wholly owned Subsidiary financing transactions permitted by Section 5.2(f) or consented to by Parent; (D) any capital expenditures permitted by (or consented to by Parent under) Section 5.2(o); and (E) the lapse, abandonment or other disposition of Company Intellectual Property that, in the Company Group’s reasonable business judgment, is not used or useful in the business of the Company Group in any material respect;
(j) except as otherwise required under the terms of any Employee Plan or as may be required by applicable Law, (i) enter into, adopt, amend or terminate any Employee Plan or other plan, program, agreement or arrangement that would constitute an Employee Plan if in effect on the date of the Original Agreement; (ii) increase or promise to increase the compensation of any director, officer, employee, independent contractor or other individual service provider of the Company Group, grant or advances of expenses pay any special bonus to any director, officer, employee employee, independent contractor or agent other individual service provider of the Company in connection with advancement obligations in effect on the date of this Agreement, (ii) incur, assume or modify any material indebtedness Group; or (iii) assumegrant or promise to grant any change in control payments, guaranteeseverance payments or similar payments or any retention payments or similar payments to, endorseor take any action to accelerate any payment or benefit, xxxxx x xxxx or the funding of any payment or benefit, payable or to be provided to any officer, employee, director, independent contractor or other individual service provider of the Company Group;
(k) hire, promote, demote (other than a Permitted Lienfor cause) on or terminate (other than for cause) any employee of the Company Group whose annual base salary is $500,000 or greater;
(l) settle, release, waive or compromise any pending or threatened material Legal Proceeding or other claim, except for the settlement of any Legal Proceedings or other claim that is (i) reflected or reserved against in the Audited Company Balance Sheet; (ii) for solely monetary payments of, net of insurance recovery, no more than $1,000,000 in the aggregate and that does not involve any admission of wrongdoing; or (iii) settled in compliance with Section 6.15;
(m) except as required by applicable Law or GAAP, (i) revalue in any material respect any of its properties or assets, including writing-off notes or accounts receivable, other than in the Company’s assets ordinary course of business; or (ii) make any change in any of its accounting principles or practices;
(i) make, change or revoke any material Tax election except in the ordinary course of business; (ii) settle or compromise any material Tax audit, claim or assessment or surrender any right to claim a material Tax refund; (iii) adopt or change any annual Tax accounting period or material Tax accounting method (other than as security may be required by applicable Law); (iv) consent to any extension or waiver of the limitation period applicable to a material amount of Taxes (other than any automatic extensions); (v) enter into any “closing agreement” within the meaning of Section 7121 of the Code (or any similar provision of state, local or non-U.S. Law); or (vi) file any amended material Tax Return;
(o) incur or commit to incur any capital expenditure(s) other than consistent with the capital expenditure budget set forth in Section 5.2(o) of the Company Disclosure Letter;
(p) enter into, modify, amend, allow to lapse, assign, waive any right or claim under or terminate any (i) Contracts (other than any Material Contract) that if so entered into, modified, amended or terminated would, individually or in the aggregate, have a Company Material Adverse Effect; or (ii) Material Contract or any Contract that would have been a Material Contract if such Contract was in existence as of the date of the Original Agreement, except in the ordinary course of business; provided that any repayment or other modification of Indebtedness in accordance with, or any action necessary to satisfy the requirements of, Section 6.20, shall, in each case, be deemed not to violate Section 5.2;
(q) maintain insurance at less than current levels or otherwise become liable in a manner inconsistent with past practice in any material respect;
(r) engage in any transaction with, or enter into any agreement, arrangement or understanding with, any Affiliate of the Company or other Person covered by Item 404 of Regulation S-K promulgated by the SEC that would be required to be disclosed pursuant to Item 404, except as permitted under Section 5.2(j);
(s) effectuate any action that would trigger notice obligations under WARN;
(t) grant any material refunds, credits, rebates or other allowances to any end user, customer, reseller or distributor, in each case other than in the ordinary course of business;
(u) acquire (by merger, consolidation or acquisition of stock or assets) any other Person or any material portion thereof or material equity interest therein or enter into any Contract that involves a joint venture entity, limited liability company or legal partnership (excluding, reseller agreements and other commercial agreements that do not involve the formation of an entity with any third Person);
(v) acquire any real property;
(i) enter into, negotiate, materially modify or terminate any Collective Bargaining Agreement; or (ii) voluntarily recognize or certify any labor union, works council or other labor organization, or group of employees, as the bargaining representative for indebtedness any employees of another Person the Company Group;
(excluding x) knowingly waive the restrictive covenant obligations of any officer or employee of the Company or any of its Subsidiaries); or
(iy) agree, resolveenter into, authorize any of, or agree or commit to enter into a Contract to take any action of the actions prohibited by this Section 5.2.
Appears in 1 contract
Forbearance Covenants. Except (a) as expressly contemplated by this Agreement, (bA) as set forth in Section 5.1 or Section 5.2 of the Company Disclosure Letter, ; (c) as required by applicable Law, or (dB) as approved in advance in writing by the Purchaser Parent (which approval will not be unreasonably withheld, conditioned or delayed); or (C) as expressly contemplated by the terms of this Agreement, during the period from the execution and delivery of this Agreement until the earlier to occur of the termination of this Agreement pursuant to Article IX and the ClosingPre-Closing Period, the Company will not, and will not permit any of its Subsidiaries Subsidiaries, to, directly or indirectly:
(a) take amend or otherwise change (i) the Charter, (ii) the Bylaws or (iii) any action set forth in Section 4.1 of the Stockholders Agreementsimilar organizational document;
(b) acquire propose or agree to acquireadopt a plan of complete or partial liquidation, directly or indirectly, by purchasedissolution, merger, consolidation consolidation, restructuring, recapitalization or otherwise, equity or assets constituting all or substantially all of the business of (or any division of the business of) another Personother reorganization;
(c) issue, grant, sell, assign, transfer, license, sublicense, abandon, permit to lapse, grant a covenant not to xxx, or otherwise dispose of any material Intellectual Property (other than non-exclusive licenses or sublicenses granted in the ordinary course of business);
(d) (i) authorize for issuance, issue, deliver, sell or transfer or agree or commit to issue, delivergrant, sell or transfer deliver, any Company Securities (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), except for the issuance, delivery or sale of shares of Company Common Stock pursuant to Company Stock-Based Awards or Company Options outstanding as of the Capitalization Date or pursuant to the ESPP, in each case, in accordance with their terms in effect on the date of this Agreement;
(d) directly or indirectly acquire, repurchase or redeem any securities, except (i) with respect to Company Securities pursuant to the terms and conditions of Company Stock-Based Awards or Company Options outstanding as of the date of this Agreement in accordance with their terms as in effect on the date of this Agreement in order to satisfy Tax obligations with respect to awards granted pursuant to Company Stock Plans or pay the exercise price of Company Options; or (ii) in connection with transactions between the Company and any of its direct or indirect Subsidiaries;
(i) acquire (by merger, consolidation or acquisition of stock or assets) any other Person or any material equity interest therein or enter into any joint venture, partnership, limited liability corporation or similar arrangement with any third Person; or (ii) dispose of (by merger, consolidation, disposition of assets, lease or otherwise), directly or indirectly, any material assets, properties, interests or businesses, other than in the ordinary course of business and as otherwise permitted under this Section 5.2;
(f) acquire, or agree to acquire, fee ownership (or its jurisdictional equivalent) of any real property;
(g) (i) adjust, split, subdivide, combine or reclassify any shares of capital stock of stock, or other equity interest issue or convertible security in the Company authorize or any of its Subsidiaries or other rights of any kind to acquire, any shares of capital stock of or any other equity interest in the Company or any of its Subsidiaries, other than (x) propose the issuance of any other Company Securities in respect of, in lieu of or in substitution for, shares of its capital stock or other equity interests pursuant to any Employee Plan or (y) the issuance of capital stock or other equity interests from any wholly owned Subsidiary to the Company or any other wholly owned Subsidiary of the Company, voting interest; (ii) amend declare, set aside, establish a record date for, authorize or modify pay any term or provision of any of the Company’s outstanding equity securities or (iii) accelerate or waive any restrictions pertaining to the vesting of any Company equity-based awards or warrants dividend or other rights distribution (whether in cash, shares or property or any combination thereof) in respect of any kind to acquire any shares of capital stock or other equity interests or voting interest, or make any other actual, constructive or deemed distribution in respect of the Companyshares of capital stock or other equity or voting interest, except for cash dividends made by any direct or indirect wholly owned Subsidiary of the Company to the Company or one of its other wholly owned Subsidiaries; (iii) pledge or encumber any shares of its capital stock or other equity or voting interest; or (iv) modify the terms of any shares of its capital stock or other equity or voting interest;
(eh) propose (i) incur, assume, suffer or commit to reclassifymodify the terms of any Indebtedness or issue any debt securities, combine, split except (A) for loans or subdivide any capital stock advances between Subsidiaries of the Company or issue or authorize between the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of capital stock Company and Subsidiaries; and (B) revolving Indebtedness incurred pursuant to the Credit Agreement to fund operations of the Company or any of its Subsidiaries, except for, with respect to any Subsidiary of the Company, any intercompany restructuring, recapitalization or similar transaction that will not have a Company Material Adverse Effect;
(f) enter into, amend or terminate any Contract with Starboard Value LP or any of its Affiliates;
(g) except as required under applicable Law or the terms of any Employee Plan existing as of the date of this Agreement, (i) increase the compensation or benefits payable to any current or former director or executive officer of the Company or any employee of the Company whose annual base salary is at least $300,000 (in each case, other than annual merit increases business in the ordinary course of business) or business consistent with past practice; (ii) enter into any newassume, or amend any existing, employment, severance, change in control, retention, bonus guarantee, endorse or collective bargaining agreement otherwise voluntarily become liable or similar agreement responsible (whether directly, contingently or arrangement;
otherwise) for the obligations of any other Person, except with respect to obligations of wholly owned Subsidiaries of the Company; (iiii) make any loans, advances or capital contributions to, or investments in, any other Person, except for (A) extensions of credit to customers in the ordinary course of business; (B) advances to directors, officers and other than investments by employees for travel and other business-related expenses, in each case, in the Company ordinary course of business and in compliance in all material respects with the Company’s policies related thereto; and (C) for loans or a advances solely between wholly owned Subsidiary of the Company to a wholly owned Subsidiary Subsidiaries of the Company or between the Company or advances of expenses to any director, officer, employee or agent and its wholly owned Subsidiaries and capital contributions in wholly owned Subsidiaries of the Company; or (iv) mortgage, pledge or otherwise encumber any assets, tangible or intangible, or create or suffer to exist any lien thereon (other than Permitted Liens);
(i) except (i) in order to comply with applicable Law (including Section 251(h) DGCL), (ii) as required pursuant to the terms of any Company in connection with advancement obligations Benefit Plan in effect on the date of this AgreementAgreement and made available to Parent, (ii) incur, assume or modify any material indebtedness or (iii) assumeas required by this Agreement or (iv) pursuant to the proposed budget for 2020 annual base cash compensation increases, guarantee2019 bonus payouts and new hires set forth in Section 5.2(i) of the Company Disclosure Letter, endorse(A) establish, xxxxx x xxxx adopt, enter into, terminate or amend, or take any action to accelerate the vesting, payment or funding of any compensation, or benefits under, any Company Benefit Plan, including with respect to any Company Stock-Based Award or Company Option, except as permitted by clauses (B) through (D) below; (B) grant to any Service Provider whose annual base cash compensation exceeds $250,000 any increase in cash compensation, bonus or fringe or other benefits (or, in the case of any such person whose annual base cash compensation does not exceed $250,000, grant any such increase unless done in the ordinary course of business and consistent with past practice); (C) grant to any Service Provider or, increase the amount of any bonus, incentive, change in control, retention, severance, termination pay or similar payments; (D) enter into any employment, consulting, change in control, retention, severance, termination or similar agreement with any Service Provider (other than a Permitted Lienoffer letters or consulting agreements entered into with newly-hired non-officer employees or consultants in the ordinary course of business and consistent with past practice that do not include change in control, equity-based, retention, severance, notice or similar payments or obligations); (E) on hire, engage or terminate the employment or engagement of any Service Provider, other than any non-officer or employee of the Company’s assets as security or otherwise become liable for indebtedness of another Person (excluding the Company or any of its SubsidiariesSubsidiaries with an annual base cash compensation of less than $250,000 in the ordinary course of business and other than terminations for cause; or (F) communicate with the employees of the Company or any of its Subsidiaries with respect to the compensation, benefits or other treatment they will receive following the Effective Time, unless such communication is approved by Parent in advance of such communication;
(j) negotiate, enter into, amend or extend any Contract with a Union;
(k) settle, release, waive or compromise any pending or threatened material Legal Proceeding, except for the settlement of any Legal Proceedings that is (i) reflected or reserved against in the Audited Company Balance Sheet; or (ii) settled in compliance with Section 6.15;
(l) [RESERVED];
(i) make, change or revoke any material Tax election; (ii) settle or compromise any material Tax dispute, audit, investigation, proceeding, claim or assessment; (iii) consent to any extension or waiver of any limitation period with respect to any material Tax claim or assessment; (iv) surrender any material Tax refund or right thereto; (v) elect or change materially any method of accounting for Tax purposes or Tax accounting period; (vi) amend any material Tax Return; (vii) file any material Tax Return in a manner inconsistent with past practice; (viii) enter into any contractual obligation in respect of material Taxes with any Governmental Authority; or (ix) consent to any extension or waiver of the limitation period with applicable to any material Tax claim or assessment relating to the Company or any of its Subsidiaries (other than pursuant to an extension of time to file);
(n) (i) incur, authorize or commit to incur any capital expenditures in excess of $5,000,000 in the aggregate; (ii) maintain insurance at less than current levels or otherwise in a manner inconsistent with past practice; (iii) engage in any transaction with, or enter into any agreement, arrangement or understanding with, any Affiliate of the Company or other Person covered by Item 404 of Regulation S-K promulgated by the SEC that would be required to be disclosed pursuant to Item 404; or (iv) effectuate a “plant closing,” “mass layoff” (each as defined in the United States Worker Adjustment and Retraining Notification Act) or other employee layoff event affecting in whole or in part any site of employment, facility, operating unit or employee;
(o) enter into any collective bargaining agreement or agreement to form a work council or other agreement with any labor organization or works council (except to the extent required by applicable Law);
(p) adopt or implement any stockholder rights plan or similar arrangement, in each case, applicable to the Transactions or any other transaction to be consummated pursuant to Parent’s rights under Section 5.3(e)(i)(2) or Section 5.3(e)(ii)(3); or
(iq) agree, resolveenter into, authorize any of, or agree or commit to enter into a Contract to take any action of the actions prohibited by this Section 5.2.
Appears in 1 contract
Samples: Agreement and Plan of Merger (Forescout Technologies, Inc)
Forbearance Covenants. Except Without limiting Section 4.1, except (aw) as expressly contemplated or permitted by this Agreement, (bx) as set forth in Section 5.1 or Section 5.2 4.2 of the Company Disclosure LetterSchedule, (c) as required by applicable Law, or (dy) as approved in advance by Parent in writing by the Purchaser (which approval will not be unreasonably withheld, conditioned delayed or delayedconditioned), or (z) as required by law, at all times during the period from commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant to Article IX VII and the ClosingEffective Time, the Company will not, shall not do any of the following and will shall not permit any of its Subsidiaries toto do any of the following (it being understood and hereby agreed that if any action is expressly permitted by any of the following subsections, directly or indirectly:such action shall be expressly permitted under Section 4.1 also):
(a) take any action set forth in Section 4.1 amend its Certificate of the Stockholders AgreementIncorporation or bylaws or comparable organizational documents;
(b) acquire propose or agree to acquireadopt a plan of complete or partial liquidation, directly or indirectly, by purchasedissolution, merger, consolidation or otherwiseconsolidation, equity or assets constituting all or substantially all of the business of (or any division of the business of) another Person;
(c) sellrestructuring, assign, transfer, license, sublicense, abandon, permit to lapse, grant a covenant not to xxx, or otherwise dispose of any material Intellectual Property (other than non-exclusive licenses or sublicenses granted in the ordinary course of business);
(d) (i) authorize for issuance, issue, deliver, sell or transfer or agree or commit to issue, deliver, sell or transfer any shares of capital stock of recapitalization or other equity interest or convertible security in the Company or any reorganization of its Subsidiaries or other rights of any kind to acquire, any shares of capital stock of or any other equity interest in the Company or any of its Subsidiaries;
(c) issue, other than sell, deliver or agree or authorize, propose or commit to issue, sell or deliver (x) whether through the issuance or granting of capital stock options, warrants, commitments, subscriptions, rights to purchase or other equity interests otherwise) any Company Securities or any Subsidiary Securities, except for the sale of shares of Company Common Stock pursuant to any Employee Plan or (y) the issuance exercise of capital stock or other equity interests from any wholly owned Subsidiary Company Options outstanding prior to the Company date hereof;
(d) directly or any other wholly owned Subsidiary of the Companyindirectly acquire, (ii) amend repurchase or modify any term or provision of any of the Company’s outstanding equity securities or (iii) accelerate or waive any restrictions pertaining to the vesting of redeem any Company equity-based awards Securities or warrants or other rights of any kind to acquire any shares of capital stock or other equity interests in the CompanySubsidiary Securities;
(e) propose (i) adjust, split, combine or commit to reclassifyreclassify any shares of capital stock, combine, split or subdivide any capital stock of the Company or issue or authorize or propose the issuance of any other securities in respect of, in lieu of, of or in substitution for, shares of its capital stock, (ii) declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any shares of capital stock, or make any other actual, constructive or deemed distribution in respect of the shares of capital stock, except for cash dividends made by any direct or indirect wholly-owned Subsidiary of the Company to the Company or one of its Subsidiaries, (iii) pledge or encumber any shares of its capital stock or any of its other securities, or (iv) modify the terms of any shares of its capital stock or any of its other securities;
(f) (i) incur, create, assume or otherwise become liable for Indebtedness in excess of $25,000 in the aggregate, (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except with respect to obligations of direct or indirect wholly owned Subsidiaries of the Company, (iii) make any loans, advances or capital contributions to or investments in any other Person, except for expense and travel advances in the ordinary course of business consistent with past practice to employees of the Company or any of its Subsidiaries, except foror (iv) sell, with respect to any Subsidiary of the Companylicense, any intercompany restructuringmortgage, recapitalization lease, transfer, encumber or similar transaction that will not have a Company Material Adverse Effect;
(f) enter into, amend or terminate any Contract with Starboard Value LP or pledge any of its Affiliatesor its Subsidiaries' assets, tangible or intangible, or create or suffer to exist any Lien thereupon (other than Permitted Liens);
(g) except as required under applicable Law (i) enter into, adopt, create, amend (including acceleration of vesting), modify or terminate any bonus, profit sharing, compensation, severance, termination, option, appreciation right, performance unit, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, severance or other employee benefit agreement, trust, plan, fund or other arrangement for the terms compensation, benefit or welfare of any Employee Plan existing director, officer or employee in any manner, except in any such case (A) as may be required by applicable law and previously disclosed to Parent or (B) solely with respect to any employee that is not an executive officer of the Company, in the ordinary course of business consistent with past practice that, in the aggregate, do not result in a material increase in benefits or compensation expense to the Company, (ii) increase the compensation of any director, officer or employee, pay any special bonus or special remuneration to any director, officer or employee, or pay any benefit not required by any plan or arrangement as in effect as of the date of this Agreementhereof, except in any such case (iA) increase the compensation as may be required by applicable law and previously disclosed to Parent or benefits payable (B) solely with respect to any current or former director or employee that is not a senior executive officer of the Company, in the ordinary course of business consistent with past practice that, in the aggregate, do not result in a material increase in benefits or compensation expense to the Company or (iii) incur any employee Change of Control Obligation;
(h) (i) incur or commit to incur any capital expenditures, or any obligations or liabilities in connection therewith that individually or in the aggregate, are in excess of $50,000, except (A) as otherwise included in the Company's capital expenditure budget furnished to Parent prior to the date hereof, (B) incurred in the ordinary course of business consistent with past practice and (C) in respect of the repair or replacement of the current assets or properties of the Company whose annual base salary is at least $300,000 or its Subsidiaries (in each caseconsistent with past practices of the Company and its Subsidiaries), (ii) pay, discharge, settle or satisfy any liabilities, other than annual merit increases the payment, discharge or satisfaction of liabilities in the ordinary course of business) , consistent with past practice, as required by any applicable law, as accrued for in the Audited Company Balance Sheet or (ii) enter into any new, or amend any existing, employment, severance, change in control, retention, bonus guarantee, or collective bargaining agreement or similar agreement or arrangement;
(i) make any loans, advances or capital contributions to, or investments in, any other Person, other than investments as required by the Company or a wholly owned Subsidiary terms of the Company to a wholly owned Subsidiary any Contract of the Company or the Company its Subsidiaries or advances of expenses to any director, officer, employee or agent of the Company in connection with advancement obligations as in effect on the date of this Agreement, (iii) enter into, modify, amend or terminate (A) any Contract which if so entered into, modified, amended or terminated could be reasonably likely to have a Company Material Adverse Effect or (B) any Material Contract, or (iv) engage in any transaction with, or enter into any agreement, arrangement or understanding with any Affiliate of the Company or other Person covered by Item 404 of Regulation S-K promulgated under the Exchange Act that would be required to be disclosed under such Item 404 other than those in existence on the date of this Agreement;
(i) initiate any Legal Proceeding (other than to enforce the terms hereof against Parent or Merger Sub), compromise, release, waive or settle any pending or threatened material Legal Proceeding (i) having a value or in an amount not covered by insurance in excess of $50,000 or (ii) incurrelating to or affecting the Company's material Intellectual Property;
(j) except as may be required by applicable law or GAAP, assume revalue any of its material assets or modify make any change in any of the accounting methods, principles or practices used by it;
(i) adopt or change its material Tax accounting methods, principles or practices, or its annual accounting period, except as required by GAAP or applicable law, (ii) make or change any material indebtedness or Tax election, (iii) assumesettle or compromise any material U.S. federal, guaranteestate, endorselocal or non-U.S. income Tax liability or enter into any closing agreement or similar agreement or arrangement with respect to material Taxes, xxxxx x xxxx (iv) fail to file any material income or other material Tax Return when due or fail to cause such Tax Returns when filed to be complete and accurate in all material respects, (v) file any material amended Tax Return or take any affirmative action to surrender any right to claim a refund of credit of Taxes; (vi) enter into any "reportable transaction" as defined in Section 6707A of the Code or (vii) consent to any extension or waiver of any limitation period with respect to any claim or assessment for material Taxes;
(l) hire any new employees other than a Permitted Lienin the ordinary course of business consistent with past practice; provided that, whether or not in the ordinary course of business, the Company may not hire any executive officers;
(m) on waive, release, grant or transfer any right of material value, other than in the ordinary course of business, consistent with past practice;
(n) terminate any executive officer or key employee of the Company or any of its Subsidiaries other than for good reason or for reasonable cause and previously communicated to Parent;
(o) enter into any transaction that could give rise to a disclosure obligation as a "listed transaction" under Section 6011 of the Company’s assets Code and the regulations thereunder;
(p) effectuate a "plant closing" or "mass layoff," as security those terms are defined in WARN, affecting in whole or otherwise become liable for indebtedness in part any site of another Person (excluding employment, facility, operating unit or employee of the Company or any of its Subsidiaries);
(q) grant any material refunds, credits, rebates or other allowances by the Company to any end user, customer, reseller or distributor, in each case, other than in the ordinary course of business;
(r) sell, license or otherwise transfer any Intellectual Property other than granting end user licenses of Company Software in the ordinary course of business, disclose any Source Code of the Company Software to any Person, or abandon or permit to lapse any material Intellectual Property;
(s) communicate with employees of the Company or any of its Subsidiaries regarding the compensation, benefits or other treatment that they will receive in connection with the Merger in a manner inconsistent with prior directives or documentation provided to the Company by Parent;
(t) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any other Person or any material equity interest therein; or
(iu) agree, resolve, authorize or commit agree to take any action prohibited by of the actions described in this Section 5.24.2. The parties hereto acknowledge and hereby agree that the restrictions set forth in this Section 4.2 are not intended to give Parent or Merger Sub, directly or indirectly, the right to control or direct the business or operations of the Company or its Subsidiaries at any time prior to the Effective Time, and no consent of Parent or Merger Sub will be required with respect to any matter set forth in this Agreement to the extent the requirement of such consent would violate any applicable Law. Prior to the Effective Time, the Company and its Subsidiaries shall exercise (consistent with and subject to the terms, conditions and restrictions of this Agreement) control and supervision over their own business and operations.
Appears in 1 contract
Samples: Merger Agreement (Proginet Corp)
Forbearance Covenants. Except (a) as expressly contemplated by this Agreement, (bi) as set forth in Section 5.1 or Section 5.2 of the Company Disclosure Letter, ; (c) as required by applicable Law, or (dii) as approved in advance by Parent in writing by the Purchaser (with email being sufficient) (which approval will not be unreasonably withheld, conditioned or delayed); or (iii) as expressly contemplated by the terms of this Agreement or required by applicable law or the express terms of the Franchise Agreements (excluding any incurrence of capital expenditures, other than capital expenditures for necessary maintenance costs with respect to any restaurants operated by the Company Group in an aggregate amount not to exceed $17,000 per restaurant on an annual basis), at all times during the period from commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant to Article IX VIII and the ClosingEffective Time, the Company will not, and will not permit any of its Subsidiaries Subsidiaries, to, directly or indirectly:
(a) take amend the Charter, the Bylaws, or any action set forth in Section 4.1 of the Stockholders Agreementother similar organizational document;
(b) acquire propose or agree to acquireadopt a plan of complete or partial liquidation, directly or indirectly, by purchasedissolution, merger, consolidation consolidation, restructuring, recapitalization or otherwise, equity or assets constituting all or substantially all of the business of (or any division of the business of) another Personother reorganization;
(c) issue, sell, assign, transfer, license, sublicense, abandon, permit to lapse, grant a covenant not to xxx, or otherwise dispose of any material Intellectual Property (other than non-exclusive licenses or sublicenses granted in the ordinary course of business);
(d) (i) authorize for issuance, issue, deliver, sell or transfer deliver or agree or commit to issue, deliver, sell or transfer deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities, except (A) for the issuance or sale of shares of Company Common Stock in connection with the exercise or settlement (as applicable) of the Company Equity Awards outstanding on or prior to the date hereof, in accordance with their terms as in effect on the date hereof; or (B) in connection with agreements in effect on the date hereof and made available to Parent (or the form of such agreement has been made available to Parent and any such agreement is substantially identical to such form), including the maximum amount of Company Securities to be issued thereunder;
(d) directly or indirectly acquire, repurchase or redeem any securities, except for (A) repurchases, withholdings, or cancellations of Company Securities in connection with the exercise or settlement or other disposition or issuance of Company Equity Awards outstanding on or prior to the date hereof in accordance with their terms as in effect on the date hereof; or (B) transactions between the Company and any of its direct or indirect Subsidiaries;
(e) (A) adjust, split, combine or reclassify any shares of capital stock stock, or issue or authorize or propose the issuance of any other Company Securities in respect of, in lieu of or other equity interest or convertible security in the Company or any of its Subsidiaries or other rights of any kind to acquiresubstitution for, any shares of capital stock of or any other equity interest in the Company or any of its Subsidiaries, other than (x) the issuance of capital stock or other equity interests pursuant to or voting interest; (B) declare, set aside or pay any Employee Plan or (y) the issuance of capital stock dividend or other equity interests from any wholly owned Subsidiary to the Company distribution (whether in cash, shares or property or any other wholly owned Subsidiary combination thereof) in respect of the Company, (ii) amend or modify any term or provision of any of the Company’s outstanding equity securities or (iii) accelerate or waive any restrictions pertaining to the vesting of any Company equity-based awards or warrants or other rights of any kind to acquire any shares of capital stock or other equity interests or voting interest, or make any other actual, constructive or deemed distribution in the Company;
(e) propose or commit to reclassify, combine, split or subdivide any capital stock of the Company or issue or authorize the issuance respect of any other securities in respect of, in lieu of, or in substitution for, shares of capital stock or other equity or voting interest, except for (i) cash dividends made by any direct or indirect wholly-owned Subsidiary of the Company to the Company, or any of its Subsidiaries, except for, with respect to any Subsidiary one of the Company’s other wholly-owned Subsidiaries or (ii) cash dividends that are consistent with past practice, at a rate not to exceed the amount set forth in Section 5.2(e)(ii) of the Company Disclosure Letter and with record and payment dates consistent with past practice of the Company during the prior 12 months; (C) pledge or encumber any intercompany restructuring, recapitalization shares of its capital stock or similar transaction that will not have a Company Material Adverse Effectother equity or voting interest; or (D) modify the terms of any shares of its capital stock or other equity or voting interest;
(f) enter into(A) incur or assume any Indebtedness (including any long-term or short-term debt) or issue any debt securities, amend or terminate any Contract with Starboard Value LP or any of its Affiliates;
except (g1) except as required under applicable Law or the terms of any Employee Plan existing as of the date of this Agreement, (i) increase the compensation or benefits payable to any current or former director or executive officer of the Company or any employee of the Company whose annual base salary is at least $300,000 (in each case, other than annual merit increases for trade payables incurred in the ordinary course of business; (2) obligations incurred pursuant to business credit cards in the ordinary course of business; (3) intercompany loans or advances between or among the Company and its direct or indirect wholly-owned Subsidiaries; and (4) borrowings under the Credit Agreement in the ordinary course of business in an outstanding principal amount not in excess of $10,000,000 in the aggregate; or (iiB) enter into any newassume, or amend any existing, employment, severance, change in control, retention, bonus guarantee, endorse or collective bargaining agreement otherwise become liable or similar agreement responsible (whether directly, contingently or arrangementotherwise) for the obligations of any other Person, except with respect to obligations of any direct or indirect wholly-owned Subsidiaries of the Company;
(ig) mortgage or pledge any of its and its Subsidiaries’ assets, tangible or intangible, or create or incur any lien thereupon (other than Permitted Liens), other than in connection with financing transactions permitted by Section 5.2(f) or consented to by Parent;
(h) make any loans, advances or capital contributions to, or investments in, any other Person, except for (1) advances to directors, officers and other employees for travel and other business-related expenses, in each case, in the ordinary course of business and in compliance in all material respects with the Company Group’s policies related thereto; and (2) loans, advances or capital contributions to, or other extensions of credit or investments in, the Company or any direct or indirect wholly-owned Subsidiaries of the Company;
(i) acquire, lease, license, sell, sell and leaseback, abandon, transfer, assign, guarantee, or exchange any assets, tangible or intangible, in each case in excess of $150,000 individually, and other than investments (1) the sale of products or services of the Company Group in the ordinary course of business; (2) the acquisition, lease or license of products or services by the Company Group in the ordinary course of business; and (3) any capital expenditures permitted by (or consented to by Parent under) Section 5.2(p);
(j) encumber or dispose of any Owned Real Property or acquire a wholly owned Subsidiary fee interest in any real property;
(k) close any restaurants operated by the Company Group as of the date hereof, other than the restaurants set forth in Section 5.2(k) of the Company Disclosure Letter;
(A) enter into, adopt, or amend (including accelerating the vesting, payment or funding), modify or terminate any bonus, profit sharing, compensation, severance, termination, option, appreciation right, performance unit, phantom equity, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, severance or other Employee Plan in any manner (other than in connection with at-will offer letters entered into in the ordinary course of business with new hires permitted pursuant to a wholly owned Subsidiary clause (D) of this paragraph, provided that the Company terms thereof shall not include the granting of any equity or equity-based awards); (B) increase or decrease the Company or advances compensation of expenses to any director, officer, employee employee, individual consultant, former employee, individual independent contractor, or agent other individual service provider of the Company Group with an annual base salary of $150,000 or more, provided that any compensation increase to an individual with an annual base salary below $150,000 shall be made in connection with advancement obligations the Company’s annual performance review and shall not exceed fifteen percent (15%) for any individual or four percent (4%) in the aggregate, in each case, with respect to the annual base salary levels in effect on for calendar year 2023; (C) enter into any change in control, severance or similar agreement or any retention or similar agreement with any officer, employee, director, individual independent contractor, individual consultant, or other individual service provider of the Company Group, or (D) hire, terminate (other than for “cause”), furlough or temporarily lay off any officer, employee, director, individual independent contractor, individual consultant, or other individual service provider of the Company Group with an annual base salary or wages (or, in the case of non-employee service providers, equivalent compensation) of $150,000 or more;
(m) settle, release, waive or compromise any pending or threatened material Legal Proceeding or other claim, except for the settlement of any Legal Proceeding or other claim that is (A) reflected or reserved against in the consolidated financial statements of the Company Group with a reserve of at least $100,000 as of the end of the most recently completed fiscal quarter of the Company Group included in the Company SEC Reports filed prior to the date hereof and; (B) for solely monetary payments of, net of this Agreementinsurance recovery, no more than $100,000 individually and $500,000 in the aggregate; or (C) settled in compliance with Section 6.15;
(n) except as required by applicable law or GAAP, (A) revalue in any material respect any of its properties or assets, including writing-off notes or accounts receivable, other than in the ordinary course of business; or (B) make any change in any of its accounting principles or practices;
(A) make (other than in the ordinary course of business) or change any material Tax election; (B) settle, consent to or compromise any material Tax claim or assessment or surrender a right to a material Tax refund; (C) consent to any extension or waiver of any limitation period with respect to any material Tax claim or assessment (other than pursuant to extensions of time to file any Tax Return); (D) file an amended Tax Return that could materially increase the Taxes payable by any member of the Company Group; or (E) request any rulings from, or enter into a closing agreement with, any Governmental Authority regarding any material Tax;
(p) incur or commit to incur any capital expenditure(s);
(q) (A) modify, amend or terminate any Material Contract, (B) enter into any Contract that would have been a Material Contract if such Contract was in existence as of the date hereof, (C) enter into, modify, amend or extend any contract with any key technology vendor, (D) enter into, modify, amend or extend any Lease or any other Contract providing for the purchase of real property, (E) enter into any Contract containing any covenant or other provision (i) limiting the right of the Company Group to engage in any material line of business or to compete with any Person in any line of business that is material to the Company Group; (ii) incurprohibiting the Company Group from engaging in any business with any Person or levying a fine, assume charge or modify any material indebtedness other payment for doing so; or (iii) assumecontaining and limiting the right of the Company Group pursuant to any “most favored nation” or “exclusivity” provisions, guarantee, endorse, xxxxx x xxxx (in each case other than a Permitted Lienany such Contracts that (1) on any of the Company’s assets as security or otherwise become liable for indebtedness of another Person (excluding may be cancelled without material liability to the Company or its Subsidiaries upon notice of 90 days or less, or (2) are not material to the Company Group, taken as a whole, or (F) enter into any sale leaseback Contract or arrangement relating to any real property;
(r) maintain insurance at less than current levels or otherwise in a manner inconsistent with past practice;
(s) engage in any transaction with, or enter into any agreement, arrangement or understanding with, any Affiliate of the Company or other Person covered by Item 404 of Regulation S-K promulgated by the SEC that would be required to be disclosed pursuant to Item 404;
(t) effectuate or announce any closing, employee layoff, furlough, reduction to terms and conditions of employment or other event affecting in whole or in part any site of employment, facility, operating unit or employee that would result in liability of the Company Group under the WARN Act;
(u) acquire (by merger, consolidation or acquisition of stock or assets) any other Person or any material portion thereof or material equity interest therein or enter into any joint venture, limited liability company or legal partnership or similar arrangement (excluding, for avoidance of doubt, reseller agreements and other commercial agreements that do not involve the formation of an entity with any third Person);
(v) (A) enter into any Collective Bargaining Agreement or agreement or arrangement to form a works council or other Contract with any labor union or other labor organization or works council, except to the extent required by applicable law; provided that the Company or its Subsidiariesapplicable Subsidiaries must first, to the extent not prohibited by law, provide Parent and its counsel reasonable advance notice thereof and a reasonable opportunity to review and comment thereon, and the Company or such Subsidiaries will give due consideration to all reasonable additions, deletions, changes or other recommendations suggested thereto by Parent or its counsel; or (B) recognize or certify any labor union, works council or other labor organization, or group of employees, as the bargaining representative for any employees of the Company Group, except as required by applicable law;
(w) waive or release any noncompetition, nonsolicitation, nondisclosure, noninterference, nondisparagement, or other restrictive covenant obligation of any current or former employee or independent contractor;
(x) adopt or implement any stockholder rights plan or similar arrangement, in each case, applicable to the Merger or any other transaction consummated pursuant to Parent’s rights under Section 5.3(d)(i)(2) or Section 5.3(d)(ii)(3); or
(iy) agree, resolveenter into, authorize any of, or agree or commit to enter into a Contract to take any action of the actions prohibited by this Section 5.2.
Appears in 1 contract
Samples: Merger Agreement (Restaurant Brands International Limited Partnership)
Forbearance Covenants. Except (a) as expressly contemplated by this Agreement, (b) as set forth in Section 5.1 or Section 5.2 of the Company Disclosure Letter, (c) as required by applicable Law, Law or (d) as approved in advance by Parent in writing by the Purchaser (which approval will shall not be unreasonably withheld, conditioned or delayed), ) during the period from the execution and delivery of this Agreement until the earlier to occur of the termination of this Agreement pursuant to Article IX VIII and the ClosingEffective Time, the Company will shall not, and will shall not permit any of its Subsidiaries Subsidiaries, to, directly or indirectly:
(ai) take amend, repeal or otherwise modify any action set forth in Section 4.1 provision of the Stockholders Agreement;
(b) acquire or agree to acquire, directly or indirectly, by purchase, merger, consolidation or otherwise, equity or assets constituting all or substantially all of the business of (or any division of the business of) another Person;
(c) sell, assign, transfer, license, sublicense, abandon, permit to lapse, grant a covenant not to xxx, or otherwise dispose of any material Intellectual Property (other than non-exclusive licenses or sublicenses granted in the ordinary course of business);
(d) (i) authorize for issuance, issue, deliver, sell or transfer or agree or commit to issue, deliver, sell or transfer any shares of capital stock of or other equity interest or convertible security in the Company or any of its Subsidiaries or other rights of any kind to acquire, any shares of capital stock of or any other equity interest in the Company or any of its Subsidiaries, other than (x) the issuance of capital stock or other equity interests pursuant to any Employee Plan or (y) the issuance of capital stock or other equity interests from any wholly owned Subsidiary to the Company or any other wholly owned Subsidiary of the Company, (ii) amend or modify any term or provision of any of the Company’s outstanding equity securities or (iii) accelerate or waive any restrictions pertaining to the vesting of any Company equity-based awards or warrants or other rights of any kind to acquire any shares of capital stock or other equity interests in the Company;
(e) propose or commit to reclassify, combine, split or subdivide 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, shares of capital stock Organizational Documents of the Company or any of its Subsidiaries, except for, with respect for immaterial amendments to any Subsidiary such Organizational Documents of the Company’s Subsidiaries;
(ii) propose or adopt a plan of complete or partial liquidation, any intercompany dissolution, merger, consolidation, restructuring, recapitalization or similar transaction that will not have a Company Material Adverse Effectother reorganization;
(fiii) enter intoissue, amend sell, deliver or terminate agree or commit to issue, sell or deliver any Contract Company Securities, except with Starboard Value LP respect to, and upon the vesting or any of its Affiliates;
(g) except as required under applicable Law or settlement of, in accordance with the terms of any Employee Plan existing as of the date of this Agreement, (i) increase the compensation or benefits payable to any current or former director or executive officer of applicable award agreements under the Company Stock Plans or any employee of the Employee Plan, as applicable, Company whose annual base salary is at least $300,000 (RSUs or Company PSUs, in each case, other than annual merit increases in the ordinary course of business) or (ii) enter into any new, or amend any existing, employment, severance, change in control, retention, bonus guarantee, or collective bargaining agreement or similar agreement or arrangement;
(i) make any loans, advances or capital contributions to, or investments in, any other Person, other than investments by the Company or a wholly owned Subsidiary of the Company to a wholly owned Subsidiary of the Company or the Company or advances of expenses to any director, officer, employee or agent of the Company in connection with advancement obligations in effect on the date of this Agreement;
(iv) except for transactions solely among the Company and its Subsidiaries or solely among the Subsidiaries of the Company, reclassify, split, reverse stock split, adjust, combine, merge, subdivide or redeem, repurchase, purchase or otherwise acquire or amend the terms of, directly or indirectly, any of its capital stock or other equity or voting interest, other than (iix) the withholding of shares of Company Common Stock to satisfy Tax obligations incurred in connection with the vesting and settlement of Company RSUs or Company PSUs, and (y) the acquisition by the Company of Company RSUs and Company PSUs in connection with the forfeiture of such awards, in each case in accordance with their terms;
(A) declare, authorize, set aside, make or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any shares of capital stock or other equity or voting interest, except for cash dividends or distributions paid by any wholly-owned Subsidiary of the Company to the Company or to any other wholly-owned Subsidiary of the Company solely to the extent in the ordinary course of business consistent with past practice or (B) pledge or encumber any shares of its capital stock or other equity or voting interest;
(vi) (A) incur, assume or assume, endorse, modify any material indebtedness or (iii) assumethe terms of, guarantee, endorse, xxxxx x xxxx (other than a Permitted Lien) on any of the Company’s assets as security or otherwise become liable for any Indebtedness, except (w) borrowings in the ordinary course of business under the Company Credit Agreement, (x) guarantees or credit support provided by the Company or any of its Subsidiaries of the obligations of the Company or any of its Subsidiaries to the extent such indebtedness is in existence on the date of another Person this Agreement or incurred in compliance with this Section 5.2(vi), (excluding y) the incurrence of any additional Indebtedness for borrowed money in an amount not to exceed $5 million in the aggregate and (z) any indebtedness among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries or (B) enter into any swap or other hedging arrangement;
(vii) except as required by applicable Law or required pursuant to any Employee Plan in effect on the date of this Agreement and set forth on Section 3.18(a) of the Company Disclosure Letter, (A) enter into, adopt, amend, modify in any material respect or terminate any material Employee Plan (or any plan, agreement, program, policy or other arrangement that would be a material Employee Plan if in existence on the date hereof); (B) increase the compensation of any employee, director, officer or other individual service provider of the Company or any of its Subsidiaries, except, in the case of each of clauses (A) and (B), (1) implementing merit- or market-based increases to base salaries or hourly wage rates (and corresponding target bonus opportunities) in the ordinary course of business consistent with past practice for any employee, director, officer or other individual service provider of the Company or any of its Subsidiaries with annual base compensation at or below $250,000 and as set forth on Section 5.2(vii) of the Company Disclosure Letter; (2) in conjunction with annual renewal or plan design changes for the Employee Plans that provide health or welfare benefits that are made in the ordinary course of business and do not materially increase the cost to the Company and its Subsidiaries; or (3) in conjunction with new hires, promotions and changes in job position or status of any current employee or other service provider, consistent with past practice for any employee, director, officer or other individual service provider of the Company or any of its Subsidiaries (or who would be an employee, director, officer or other individual service provider) with annual base compensation at or below $250,000 and in accordance with Section 5.2(vii) of the Company Disclosure Letter; (C) grant or provide any severance or termination payments or benefits to any employee, director, officer or other individual service provider of the Company or any of its Subsidiaries with annual base compensation in excess of $250,000; (D) hire or terminate (other than for cause) the employment or services of any employee, director, officer or other individual service provider who has (or upon hire would be expected to have) an annual base compensation in excess of $250,000; (E) take any action to accelerate the vesting or payment or lapsing of restrictions, or fund or in any other way secure the payment, of material compensation or benefits under any Employee Plan; (F) make any grants under the Company Stock Plans to any current or former employee, director, officer or individual service provider of the Company or any of its Subsidiaries; or (G) grant to any current or former employee, director, officer or individual service provider of the Company or any of its Subsidiaries any right to reimbursement, indemnification or payment for any Taxes incurred under Section 409A or Section 4999 of the Code;
(viii) settle any Legal Proceeding, claim or other action (i) granting any injunctive or other equitable relief or containing any admission of wrongdoing or violation of Law by the Company or any of its Subsidiaries or (ii) for an amount in excess of $250,000 individually or $1,000,000 in the aggregate other than (x) any settlement where the amount paid or to be paid by the Company or any of its Subsidiaries is fully covered by insurance coverage maintained by the Company or any of its Subsidiaries and such insurer has agreed to cover such settlement in full (other than any applicable deductible or retention) and (y) settlements of any Legal Proceedings for an amount not more than $250,000 greater than the amount, if any, reflected or reserved in the most recent balance sheet (or the notes thereto) of the Company, and to the extent applicable, included in the Company SEC Documents relating to such Legal Proceeding;
(ix) change the Company’s or its Subsidiaries’ methods, principles or practices of financial accounting, except as required by GAAP, Regulation S-X of the Exchange Act (or any interpretation thereof), or by any Governmental Authority or applicable Law;
(x) make (other than Tax elections consistent with past practice that are made in connection with filing Tax Returns in the ordinary course of business), change or revoke any income or any other material Tax election, change any material Tax accounting period or material method of Tax accounting, file any material amended Tax Return, enter into any “closing agreement” as described in Section 7121 of the Code, settle or compromise any audit or other proceeding with respect to any material Tax claim or assessment, surrender any right to claim a refund of material Taxes, request any ruling with respect to Taxes with an applicable Governmental Authority, consent to any extension or waiver of the limitation period applicable to any material Taxes (other than an automatic extension to file Tax Returns obtained in the ordinary course of business), or enter into a voluntary disclosure or similar agreement or otherwise voluntarily disclosing information to a Governmental Authority with respect to material Taxes;
(xi) incur or commit to incur any capital expenditures other than (x) during fiscal year 2024, amounts not in excess of 110% of the capital expenditure budget for fiscal year 2024, in accordance with the capital expenditure budget for fiscal years 2024 and 2025 set forth in Section 5.2(xi) of the Company Disclosure Letter (the “Capex Budget”) and (y) during fiscal year 2025, amounts not in excess of 120% of the Capex Budget for fiscal year 2025;
(xii) (A) enter into any Contract that would be a Material Contract if in effect as of the date of this Agreement or (B) modify in any material respect, amend in any material respect, fail to renew or terminate (other than any Material Contract that has expired in accordance with its terms) or waive any material right, remedy or default under any Material Contract except, in each case of clause (A) and (B), in the ordinary course of business;
(A) acquire any division, assets, properties, businesses or equity securities in any Person (including by merger, consolidation or acquisition of stock or assets), other than (x) in or from any wholly-owned Subsidiary of the Company, (y) supplies in the ordinary course of business or (z) acquisitions that do not exceed $1,000,000 in the aggregate; (B) make any material loans, advances or capital contributions to or investments in, any other Person (other than to (i) the Company or any of its wholly-owned Subsidiaries or (ii) advance business-related expenses to any directors, officers or employees of the Company or any of its wholly-owned Subsidiaries in the ordinary course of business and on terms materially consistent with those advances granted prior to the date hereof);
(xiv) sell, assign, transfer, lease, license, subject to a lien (other than a Permitted Lien), allow to lapse, or otherwise dispose of, any of the Company’s or its Subsidiaries’ material assets, rights or properties (including material Company Intellectual Property) other than (x) such sales, assignments, transfers or other dispositions (A) of inventory that are in the ordinary course of business and (B) that do not have a purchase price that exceeds $1,000,000 individually or $4,000,000 in the aggregate, and (y) non-exclusive licenses to Intellectual Property granted in the ordinary course of business;
(xv) engage in any transaction with, or enter into any agreement, arrangement or understanding with, any Affiliate of the Company or other Person covered by Item 404 of Regulation S-K promulgated by the SEC that would be required to be disclosed pursuant to Item 404;
(xvi) except where required by applicable Law or to renew existing agreements, enter into or materially modify any collective bargaining agreement or similar labor-related agreement or voluntarily recognize a labor union, works council or labor organization as the representative of any Company employee;
(xvii) effectuate or announce any “plant closing”, “mass layoff” or other workforce action which triggers the notice requirements of the WARN Act;
(xviii) make any materially adverse changes to (A) the operation or security of any material Company IT Systems, or (B) any posted privacy policy of the Company or its Subsidiaries, except in each case, as required by applicable Law;
(xix) adopt a rights plan, “poison pill” or similar agreement that is, or at the Effective Time will be, applicable to this Agreement or the Transactions; or
(ixx) agree, resolve, authorize resolve or commit to take any action of the actions prohibited by this Section 5.2.
Appears in 1 contract
Forbearance Covenants. Except (a) as expressly contemplated by this Agreement, (b) as set forth in Section 5.1 or Section 5.2 of During the Company Disclosure Letter, (c) as required by applicable Law, or (d) as approved in advance in writing by the Purchaser (which approval will not be unreasonably withheld, conditioned or delayed), during the period from the execution and delivery of this Agreement until the earlier to occur of the termination of this Agreement pursuant to Article IX and the ClosingPre-Closing Period, the Company will not, and will not permit any of its Subsidiaries to, directly or indirectly:to (in each case subject to the Covenant Exceptions):
(a) take amend or otherwise change the Charter, the Bylaws or any action set forth in Section 4.1 other similar organizational document (other than immaterial amendments to such organizational documents of the Stockholders AgreementCompany’s Subsidiaries);
(b) acquire propose or agree to acquireadopt a plan of complete or partial liquidation, directly or indirectly, by purchasedissolution, merger, consolidation consolidation, restructuring, recapitalization or otherwise, equity or assets constituting all or substantially all of the business of (or any division of the business of) another Personother reorganization;
(c) sell, assign, transfer, license, sublicense, abandon, permit to lapse, grant a covenant not to xxx, or otherwise dispose of any material Intellectual Property (other than non-exclusive licenses or sublicenses granted in the ordinary course of business);
(d) (i) authorize for issuance, issue, deliver, sell or transfer deliver, or agree or commit to issue, sell or deliver, any of its equity securities (whether through the issuance or granting of options, warrants, commitments, restricted stock units, subscriptions, rights to purchase or otherwise), except, in each case, (i) for the issuance, delivery or sale of (or agreement or commitment to issue, sell or transfer any deliver) shares of capital stock of or other equity interest or convertible security in the Company or any of its Subsidiaries or other rights of any kind to acquire, any shares of capital stock of or any other equity interest in the Company or any of its Subsidiaries, other than (x) the issuance of capital stock or other equity interests Common Stock pursuant to any Employee Plan or (y) the issuance of capital stock or other equity interests from any wholly owned Subsidiary to the Company or any other wholly owned Subsidiary of the Company, (ii) amend or modify any term or provision of any of the Company’s Equity-Based Awards outstanding equity securities or (iii) accelerate or waive any restrictions pertaining to the vesting of any Company equity-based awards or warrants or other rights of any kind to acquire any shares of capital stock or other equity interests in the Company;
(e) propose or commit to reclassify, combine, split or subdivide 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, shares of capital stock of the Company or any of its Subsidiaries, except for, with respect to any Subsidiary of the Company, any intercompany restructuring, recapitalization or similar transaction that will not have a Company Material Adverse Effect;
(f) enter into, amend or terminate any Contract with Starboard Value LP or any of its Affiliates;
(g) except as required under applicable Law or the terms of any Employee Plan existing as of the date of this Agreement, in each case in accordance with their terms; (ii) for the issuance, delivery or sale of (or agreement or commitment to issue, sell or deliver) shares of Company Common Stock pursuant to Company Warrants outstanding as of the date of this Agreement; (iii) in connection with agreements in effect on the date of this Agreement (including any offer letters or similar agreements entered into or extended through the date of this Agreement, provided that any such compensatory equity securities not yet granted as of the date of this Agreement and contemplated under offer letters or similar agreements newly engaging any service providers are set forth in Section 5.2(c) of the Company Disclosure Letter); or (v) for the issuance, delivery or sale of (or agreement to issue, sell or deliver) equity securities by any Subsidiary to the Company or another Subsidiary;
(d) acquire, repurchase or redeem any of its equity securities, except, in each case (i) increase pursuant to the compensation terms and conditions of Company Equity-Based Awards outstanding as of the date of this Agreement in accordance with their terms or benefits payable to otherwise satisfy Tax obligations with respect to awards granted pursuant to Company Equity Plans or to pay the exercise price of Company Options; or (ii) for transactions between the Company and any current of its Subsidiaries or former director among any Subsidiaries of the Company;
(e) (i) adjust, split, subdivide, combine or executive officer reclassify any of its capital stock or other equity or voting interests; (ii) declare, set aside, establish a record date for, authorize or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any shares of its capital stock or other equity or voting interests, or make any other actual, constructive or deemed distribution in respect of its capital stock or other equity or voting interests, except for dividends or other distributions made by any Subsidiary of the Company to the Company or one of its other Subsidiaries; (iii) pledge or encumber any of its capital stock or other equity or voting interests (other than Permitted Liens); or (iv) modify the terms of any of its capital stock or other equity or voting interests;
(f) acquire or agree to acquire (by merger, consolidation or acquisition of stock or assets) any third Person or any equity interest in such Person, or enter into any contractual joint venture, partnership or similar arrangement with any third Person;
(g) acquire, or agree to acquire, fee ownership (or its jurisdictional equivalent) of any real property;
(h) (i) incur or assume any indebtedness for borrowed money or issue any debt securities, except, in each case, (A) for loans or advances between Subsidiaries of the Company or any employee of between the Company whose annual base salary is at least $300,000 and its Subsidiaries; (in each case, other than annual merit increases B) obligations incurred pursuant to business credit cards in the ordinary course of business; or (C) or the incurrence of indebtedness pursuant to credit facilities of the Acquired Companies in effect as of the date of this Agreement; (ii) enter into any newassume, or amend any existing, employment, severance, change in control, retention, bonus guarantee, endorse or collective bargaining agreement otherwise become liable or similar agreement responsible (whether directly, contingently or arrangement;
otherwise) for the obligations of any third Person, except with respect to obligations of the Company or its Subsidiaries; (iiii) make any loans, advances or capital contributions to, or investments in, any other third Person, except, in each case, for (1) extensions of credit to customers in the ordinary course; (2) advances of reimbursable expenses to directors, officers and other than investments by employees, in each case in the Company ordinary course of business; and (3) for loans or a wholly advances between wholly-owned Subsidiary of the Company to a wholly owned Subsidiary Subsidiaries of the Company or between the Company and its wholly-owned Subsidiaries and capital contributions in or advances to Subsidiaries of expenses the Company; or (iv) mortgage, pledge or otherwise encumber any assets, tangible or intangible, or create any lien thereon (other than Permitted Liens);
(i) except (i) in order to comply with applicable Law, (ii) as required pursuant to the terms of any director, officer, employee or agent Company Benefit Plan set forth on Section 3.19(a) of the Company in connection with advancement obligations Disclosure Letter and in effect on on, and made available to Parent prior to, the date of this Agreement, (ii) incur, assume or modify any material indebtedness or (iii) assumeas provided in this Agreement (including as permitted pursuant to this Section 5.2(i)), guarantee(A) establish, endorseadopt, xxxxx x xxxx enter into, terminate or amend, or take any action to accelerate the vesting, payment or funding of any compensation, or benefits under, any material Company Benefit Plan; (B) grant to any Service Provider whose annual base cash compensation exceeds $175,000 any increase in cash compensation, bonus or material fringe or other material benefits, or, in the case of any such Service Provider whose annual base cash compensation does not exceed $175,000, grant any such increase that would result in such Service Provider’s annual base compensation exceeding $175,000; (C) grant to any Service Provider any increase in change in control, retention, severance or termination pay; (D) enter into any employment, consulting, change in control, retention, severance or termination agreement with any Service Provider (other than a Permitted Lienwith newly-hired non-officer employees or consultants in the ordinary course of business, or to replace personnel terminated for cause, death or disability or who resign voluntarily); or (E) on terminate any employee of the Company’s assets as security or otherwise become liable for indebtedness of another Person (excluding the Company or any of its SubsidiariesSubsidiaries with an annual base cash compensation in excess of $175,000, other than terminations for cause or in the ordinary course of business;
(j) implement any reduction in force, mass layoff, collective redundancy, early retirement program, or other voluntary or involuntary termination program (other than individual employee terminations in the ordinary course of business consistent with past practice); or;
(k) xxxxxx, release, waive or compromise any pending or threatened material Legal Proceeding, except for the settlement of any Legal Proceedings (i) agreesolely for monetary damages in an amount (A) not in excess of $250,000 individually or $500,000 in the aggregate or (B) that does not exceed the amount reflected or reserved against in the Audited Company Balance Sheet; or (ii) settled in compliance with Section 6.14;
(l) except as required by applicable Law or GAAP, resolve(i) other than in the ordinary course of business, revalue in any material respect any of its properties or assets, including writing-off notes or accounts receivable; or (ii) make any change in any of its accounting principles or practices;
(m) (i) make or change any material Tax election (other than elections that are consistent with past practice); (ii) settle or compromise any material Tax claim or assessment; (iii) consent to any extension or waiver of any limitation period with respect to any material Tax claim or assessment; (iv) change any annual Tax accounting period, (v) adopt or change any income or other material method of Tax accounting, (vi) file any amended material Tax Return, (vii) file any Tax Return inconsistent with past practice; or (viii) surrender any right to claim a Tax refund (other than by reason of passage of time);
(n) (i) incur, authorize or commit to incur any material capital expenditures other than (A) consistent in all material respects with the capital expenditure budget set forth in Section 5.2(n) of the Company Disclosure Letter; (B) pursuant to obligations imposed by Material Contracts or Leases; or (C) pursuant to agreements in effect prior to the date of this Agreement; (ii) (x) enter into any Contract which, if entered into prior to the date of this Agreement, would be a Material Contract, or (y) modify, amend or terminate any Material Contract in a manner that is adverse in any material respect to the Company and its Subsidiaries, taken as a whole; (iii) maintain insurance at less than current levels or otherwise in a manner inconsistent with past practice; or (iv) engage in any transaction with, or enter into any agreement, arrangement or understanding with, any Affiliate of the Company or other Person covered by Item 404 of Regulation S-K promulgated by the SEC that would be required to be disclosed pursuant to Item 404;
(o) enter into a new line of business or cease, abandon, discontinue, dispose of, or materially modify operations with respect to, any material existing line of business; or
(p) enter into, or agree or commit to enter into, a Contract to take any action of the actions prohibited by this Section 5.2.
Appears in 1 contract
Samples: Merger Agreement (Transphorm, Inc.)
Forbearance Covenants. Except (a) as expressly contemplated by this Agreement, (b) as set forth in Section 5.1 or Section 5.2 of the Company Disclosure Letter, (c) as required by applicable Law, or (d) as approved in advance in writing by the Purchaser (which approval will not be unreasonably withheld, conditioned or delayed), during During the period from the execution and delivery of this Agreement until the earlier to occur of the termination of this Agreement pursuant to Article IX VIII and the ClosingEffective Time, the Company will shall not, and will shall not permit any of its Subsidiaries toSubsidiaries, directly or indirectly:to (in each case, subject to the Covenant Exceptions):
(a) take any action set forth in Section 4.1 amend the Organizational Documents of the Stockholders AgreementCompany or any of its Subsidiaries;
(b) acquire propose or agree to acquireadopt a plan of complete or partial liquidation, directly or indirectly, by purchasedissolution, merger, consolidation consolidation, restructuring, recapitalization or otherwise, equity or assets constituting all or substantially all of the business of (or any division of the business of) another Personother reorganization;
(c) issue, sell, assign, transfer, license, sublicense, abandon, permit to lapse, grant a covenant not to xxx, or otherwise dispose of any material Intellectual Property (other than non-exclusive licenses or sublicenses granted in the ordinary course of business);
(d) (i) authorize for issuance, issue, deliver, sell or transfer deliver or agree or commit to issue, deliver, sell or transfer deliver any shares of capital stock of Company Securities, except (upon the vesting, exercise or other equity interest settlement of, Company Options, Company RSUs, Company PSUs or convertible security in purchase rights granted pursuant to the Company ESPP, in each case, in effect on the date of this Agreement;
(d) except for transactions solely among the Company and its Subsidiaries or solely among the Subsidiaries of the Company, reclassify, split, combine, subdivide or redeem, repurchase, purchase or otherwise acquire or amend the terms of, directly or indirectly, any of its Subsidiaries or other rights of any kind to acquire, any shares of capital stock of or any other equity interest in the Company or any of its Subsidiaries, other than (x) the issuance of capital stock or other equity interests pursuant or voting interest, other than (i) the acquisitions of shares of Company Common Stock in connection with the surrender of shares of Company Common Stock by holders of Company Options in order to pay the exercise price of such Company Options, (ii) the withholding of shares of Company Common Stock to satisfy Tax obligations incurred in connection with the exercise of Company Options and the vesting and settlement of Company RSUs or Company PSUs, and (iii) the acquisition by the Company of Company Options, Company RSUs and Company PSUs in connection with the forfeiture of such awards, in each case in accordance with their terms;
(e) (i) adjust, split, combine or reclassify any Employee Plan shares of capital stock, or (y) issue or authorize or propose the issuance of any other Company Securities in respect of, in lieu of or in substitution for, shares of its capital stock or other equity interests from any wholly owned Subsidiary to the Company or any other wholly owned Subsidiary of the Company, voting interest; (ii) amend declare, set aside or modify pay any term or provision of any of the Company’s outstanding equity securities or (iii) accelerate or waive any restrictions pertaining to the vesting of any Company equity-based awards or warrants dividend or other rights distribution (whether in cash, shares or property or any combination thereof) in respect of any kind to acquire any shares of capital stock or other equity interests or voting interest, or make any other actual, constructive or deemed distribution in the Company;
(e) propose or commit to reclassify, combine, split or subdivide any capital stock respect of the Company or issue or authorize the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of capital stock or other equity or voting interest, except for cash dividends made by any direct or indirect wholly-owned Subsidiary of the Company to the Company or one of its other wholly-owned Subsidiaries; (iii) or modify the terms of any shares of its capital stock or other equity or voting interest or (iv) pledge or encumber any shares of its capital stock or other equity or voting interest;
(f) (i) incur, assume, endorse, guarantee, or otherwise become liable for any indebtedness for borrowed money, except (A) borrowings in the ordinary course of business under the Company’s credit facilities as in effect on the date hereof, (B) guarantees or credit support provided by the Company or any of its Subsidiaries of the obligations of the Company or any of its SubsidiariesSubsidiaries to the extent such indebtedness is in existence on the date of this Agreement or incurred in compliance with this Section 5.2(f), except for(C) performance bonds and surety bonds entered into in the ordinary course of business, with respect to (D) any Subsidiary of indebtedness among the Company and its Subsidiaries or among the Company, ’s Subsidiaries and (E) any intercompany restructuring, recapitalization or similar transaction that will additional indebtedness for borrowed money in an amount not have a to exceed $1 million in the aggregate at any time incurred by the Company Material Adverse Effect;
(f) enter into, amend or terminate any Contract with Starboard Value LP or any of its AffiliatesSubsidiaries other than in accordance with clauses (A) through (C), or (ii) incur, assume or otherwise permit any lien to exist on any asset of the Company or any of its Subsidiaries (other than any Permitted Lien);
(g) (i) enter into, adopt, amend or modify (including to accelerate the vesting or funding of any benefits under), or terminate any Employee Plan; (ii) increase the compensation of any director, officer, employee or other individual service provider of the Company or any of its Subsidiaries with an annual base salary or wages (or in the case of non-employee service providers, equivalent compensation) in excess of $150,000; or (iii) hire, terminate (other than for cause), or layoff (or give notice of any such action to) any director, officer, employee or other individual service provider of the Company or any of its Subsidiaries with an annual base salary or wages (or in the case of non-employee service providers, equivalent compensation) in excess of $150,000, except, in the case of (i), in conjunction with the annual renewal or plan design changes for Employee Plans that are health and welfare plans subject to ERISA; provided, that such actions do not materially increase the cost to the Company and its Subsidiaries;
(h) settle, release, waive or compromise any pending or threatened Legal Proceeding other than (i) for an amount not in excess of $5 million individually or $10 million in the aggregate, (ii) any settlement where the amount paid or to be paid by the Company or any of its Subsidiaries is covered by insurance coverage maintained by the Company or any of its Subsidiaries and (iii) settlements of any Legal Proceedings for an amount not in excess of the amount, if any, reflected or reserved in the balance sheet (or the notes thereto) of the Company; provided, in each case, no equitable relief has been given;
(i) (A) change the Company’s or its Subsidiaries’ principles of financial accounting or annual accounting period, or (B) revalue in any material respect any of its properties or assets, including writing off notes or accounts receivable, other than in the ordinary course of business, in each case, except as required under by GAAP, Regulation S-X of the Exchange Act (or any interpretation thereof), or by any Governmental Authority or applicable Law Law;
(j) make or the terms change any material Tax election, or settle any material Tax claim or assessment with any Governmental Authority; consent to any extension or waiver of any Employee Plan existing limitation period with respect to any material Tax claim or assessment (other than as the result of extending the due date of a Tax Return); amend, refile, modify or otherwise change any material Tax Return; enter into a closing agreement with any Governmental Authority relating to any Tax; or surrender any right to claim a material Tax refund;
(k) incur or commit to incur any capital expenditures other than (i) during fiscal year 2023, amounts not in excess of 100% of the capital expenditure budget for the fiscal year 2023, set forth in Section 5.2(k) of the Company Disclosure Letter (the “Capex Budget”); or (ii) pursuant to obligations imposed by any Contract in effect as of the date of this Agreement;
(l) enter into, modify in any material respect, amend in any material respect or terminate (iother than any Material Contract that has expired or will be expiring in accordance with its terms) increase the compensation or benefits payable to any current or former director or executive officer of the Company or any employee of the Company whose annual base salary is at least $300,000 (Material Contract except, in each case, other than annual merit increases in the ordinary course of business; provided, that any Material Contract described by the definition set forth in Section 1.1(ddd)(vii) shall be exclusively governed by Section 5.2(f);
(m) acquire any interest in any Person or any division, assets, properties, businesses or equity securities thereof (iiincluding by merger, consolidation or acquisition of stock or assets), other than (i) in or from any wholly owned Subsidiary of the Company;
(n) sell, assign, transfer, or otherwise dispose of, any of the Company’s or its Subsidiaries’ material assets, other than such sales, assignments, transfers, or other dispositions that are in the ordinary course of business and do not have a purchase price that exceeds $200,000 individually or $1 million in the aggregate;
(o) engage in any transaction with, or enter into any newagreement, arrangement or amend understanding with, any existing, employment, severance, change in control, retention, bonus guarantee, Affiliate of the Company or collective bargaining agreement or similar agreement or arrangementother Person covered by Item 404 of Regulation S-K promulgated by the SEC that would be required to be disclosed pursuant to Item 404;
(ip) effectuate or announce any closing, employee layoff, furlough, reduction to terms and conditions of employment or other event affecting in whole or in part any site of employment, facility, operating unit or employee that would result in liability of the Company Group under the WARN Act;
(q) make any loans, advances or capital contributions to, or investments in, any other Person, except for (i) extensions of credit to customers in the ordinary course of business; (ii) advances to directors, officers and other than investments by employees for travel and other business-related expenses, in each case in the ordinary course of business and in compliance in all material respects with the Company Group’s policies related thereto; (iii) loans, advances or a wholly capital contributions to, or investments in, any direct or indirect wholly-owned Subsidiary Subsidiaries of the Company to a wholly owned Subsidiary of the Company or the Company or Company; and (iv) advances of expenses to any director, officer, employee or agent of the Company in connection with advancement indemnification obligations pursuant to the Company’s bylaws or indemnification agreements entered into between the Company and current and former directors, officers and employees that are in effect as of the date of this Agreement;
(r) sell, assign, transfer, license, abandon, cancel, permit to lapse or enter the public domain, pledge, encumber, or otherwise dispose of any material Company Intellectual Property, other than (i) the grant of non-exclusive licenses in the ordinary course of business and (ii) pledges or encumbrances under the Company Credit Agreement as in effect on the date hereof;
(s) enter into, amend or terminate any collective bargaining agreement or other agreement with a labor union, works council or similar organization;
(t) waive or release any noncompetition, nonsolicitation, nondisclosure, noninterference, nondisparagement, or other restrictive covenant obligation of this Agreement, (ii) incur, assume any current or modify any material indebtedness former employee or (iii) assume, guarantee, endorse, xxxxx x xxxx (other than a Permitted Lien) on any of the Company’s assets as security or otherwise become liable for indebtedness of another Person (excluding the Company or any of its Subsidiaries)independent contractor; or
(iu) agree, resolve, authorize resolve or commit to take any action of the actions prohibited by this Section 5.2.
Appears in 1 contract
Forbearance Covenants. Except (aw) as expressly contemplated by this Agreement, ; (bx) as set forth in Section 5.1 of the Company Disclosure Letter or Section 5.2 of the Company Disclosure Letter, ; (cy) as required by applicable Law, or (dz) as approved in advance in writing by the Purchaser Parent (which approval will not be unreasonably withheld, conditioned or delayed), during the period from the execution and delivery of this Agreement until the earlier to occur of the termination of this Agreement pursuant to Article IX VIII and the ClosingEffective Time, the Company will shall not, and will not permit any shall cause each of its Subsidiaries as applicable not to, directly or indirectly:
(a) take amend any action set forth in Section 4.1 Organizational Documents of the Stockholders AgreementCompany or any of its Subsidiaries;
(b) acquire propose or agree to acquireadopt a plan of complete or partial liquidation, directly or indirectly, by purchasedissolution, merger, consolidation consolidation, restructuring, recapitalization or otherwise, equity or assets constituting all or substantially all of the business of (or any division of the business of) another Personother reorganization;
(c) issue, sell, assign, transfer, license, sublicense, abandon, permit to lapse, grant a covenant not to xxx, or otherwise dispose of any material Intellectual Property (other than non-exclusive licenses or sublicenses granted in the ordinary course of business);
(d) (i) authorize for issuance, issue, deliver, sell or transfer deliver or agree or commit to issue, deliver, sell or transfer deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities or securities of any Subsidiary of the Company, except issuances of shares of Company Common Stock in respect of any exercise of Company Options or the vesting or settlement of other equity awards outstanding on the date hereof and in accordance with their respective present terms;
(d) directly or indirectly acquire, repurchase or redeem any Company Securities or securities of any Subsidiary of the Company, except for (i) repurchases of Company Securities pursuant to the terms and conditions of Company Equity Awards in effect as of the date hereof, or (ii) transactions between the Company and any of its direct or indirect wholly-owned Subsidiaries;
(e) (i) adjust, split, combine or reclassify any shares of capital stock of stock, or other equity interest issue or convertible security in the Company authorize or any of its Subsidiaries or other rights of any kind to acquire, any shares of capital stock of or any other equity interest in the Company or any of its Subsidiaries, other than (x) propose the issuance of any other Company Securities or securities of any Subsidiary of the Company in respect of, in lieu of or in substitution for, shares of its capital stock or other equity interests pursuant to any Employee Plan or (y) the issuance of capital stock or other equity interests from any wholly owned Subsidiary to the Company or any other wholly owned Subsidiary of the Company, voting interest; (ii) amend declare, set aside or modify pay any term or provision of any of the Company’s outstanding equity securities or (iii) accelerate or waive any restrictions pertaining to the vesting of any Company equity-based awards or warrants dividend or other rights distribution (whether in cash, shares or property or any combination thereof) in respect of any kind to acquire any shares of capital stock or other equity interests or voting interest, or make any other actual, constructive or deemed distribution in the Company;
(e) propose or commit to reclassify, combine, split or subdivide any capital stock respect of the Company or issue or authorize the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of capital stock or other equity or voting interest, except for cash dividends made by any direct or indirect wholly-owned Subsidiary of the Company to the Company or one of its other wholly-owned Subsidiaries; (iii) pledge or encumber any shares of its capital stock or other equity or voting interest; or (iv) enter into any agreement with respect to the voting of any capital stock or other equity or voting interest of the Company or any of its Subsidiaries, except for, with respect to any Subsidiary of the Company, any intercompany restructuring, recapitalization or similar transaction that will not have a Company Material Adverse Effect;
(f) enter into, amend or terminate any Contract with Starboard Value LP or any of its Affiliates;
(g) except as required under applicable Law or the terms of any Employee Plan existing as of the date of this Agreement, (i) increase incur, assume or suffer any Indebtedness or issue any debt securities, except (a) for trade payables; and (b) short-term borrowings pursuant to the compensation or benefits payable to any current or former director or executive officer of the Company or any employee of the Company whose annual base salary is at least $300,000 (in each case, other than annual merit increases Credit Agreement in the ordinary course of business) business in an amount not to exceed $20,000,000 outstanding at any point in time after the date hereof for working capital or other permitted purposes under this Section 5.2 (it being understood that such amounts shall be repaid in the ordinary course upon receipt of payments with respect to accounts receivable); (ii) enter into any newassume, or amend any existing, employment, severance, change in control, retention, bonus guarantee, endorse or collective bargaining agreement otherwise become liable or similar agreement responsible (whether directly, contingently or arrangement;
otherwise) for the obligations of any other Person, except with respect to obligations of direct or indirect wholly-owned Subsidiaries of the Company; (iiii) make any loans, advances or capital contributions to, or investments in, any other Person, except for (a) extensions of credit to customers; and (b) advances to directors, officers and other employees, in each case of (a) and (b) in the ordinary course of business consistent with past practice; (iv) mortgage or pledge any assets, tangible or intangible, or create or suffer to exist any lien thereupon (other than investments by Permitted Liens); or (v) incur, assume or otherwise become liable or responsible (whether directly, contingently or otherwise) for any obligations under interest rate, derivative or hedging transactions other than in the Company ordinary course of business consistent with past practice;
(g) (i) enter into, adopt, terminate, amend or a wholly owned Subsidiary modify any Employee Plan or accelerate compensation or benefits provided under any Employee Plan; (ii) increase the compensation or benefits of the Company to a wholly owned Subsidiary of the Company any director or the Company officer, pay any special bonus or advances of expenses special remuneration to any director, officerofficer or employee, employee or agent pay any benefit not permitted in accordance with the terms of the Company in connection with advancement obligations any Employee Plan as in effect on as of the date of this Agreement, (ii) incur, assume or modify any material indebtedness or ; (iii) assumehire any vice-president level employee or above; or (iv) terminate (unless for cause) any executive officer or operating group president, guaranteeexcept in the case of each of (i) and (ii), endorse(a) as may be required by applicable Law; (b) in connection with any non-management employee hires in the ordinary course of business and consistent with past practice with annualized cash compensation and benefits consistent with past practice for the applicable position; or (c) for increases in compensation and/or benefits for non-management employees (based on promotion or merit) made in the ordinary course of business consistent with past practice and not to exceed an increase of 3% in value in the aggregate for all employees;
(h) pay, xxxxx x xxxx discharge, settle, compromise or satisfy any Legal Proceeding, except for (i) with respect to Legal Proceedings unrelated to the Merger or any other than a Permitted Lien) on transactions contemplated by this Agreement, compromises, settlements or agreements that involve only the payment of monetary damages not in excess of $3,000,000 individually or $10,000,000 in the aggregate, in any case without the imposition of equitable relief on, or the Company’s assets as security or otherwise become liable for indebtedness admission of another Person (excluding wrongdoing by, the Company or any of its Subsidiaries; or (ii) Legal Proceedings settled in compliance with Section 6.14;
(i) except as required by applicable Law or GAAP, (i) revalue in any material respect any of its properties or assets, including writing-off notes or accounts receivable, other than in the ordinary course of business or (ii) make any material change in any of its accounting principles, methods or practices;
(j) except as reasonably necessary to comply with changes to applicable Tax Laws, (i) make or change any material Tax election; (ii) settle or compromise any material Tax claim or assessment; (iii) consent to any extension or waiver of any limitation period with respect to any material Tax claim or assessment; (iv) surrender any right to claim a refund of a material amount of Taxes; (v) enter into any Tax sharing or similar agreement or arrangement (other than commercial agreements not primarily related to Taxes); or (vi) amend any material Tax Return;
(k) make any new capital expenditures not otherwise provided in accordance with the Company’s budget plan set forth in Section 5.2(k) of the Company Disclosure Letter, other than such new capital expenditures that do not result in an aggregate increase from such budget plan greater than $2,500,000 in the aggregate;
(i) enter into any Contract that would be a Material Contract pursuant to clause (i), (iii), (vi), (viii), (ix), (x), (xii), (xiii) or (xiv) of the definition thereof, (ii) modify, amend or terminate any Material Contract, or (iii) waive any material breach or default, or release, settle or compromise any material claim, under any Material Contract;
(m) maintain insurance at less than current levels or otherwise in a manner inconsistent with past practice;
(n) (i) other than with respect to the matters set forth in Section 5.2(g), engage in any transaction with, or enter into any agreement, arrangement or understanding with, any Affiliate of the Company or other Person covered by Item 404 of Regulation S-K promulgated by the SEC that would be required to be disclosed pursuant to Item 404; (ii) effectuate a “plant closing” or “mass layoff” (as defined in WARN) affecting in whole or in part any site of employment, facility, operating unit or employee without complying with WARN; or (iii) enter into, modify or terminate any Collective Bargaining Agreement or, through negotiation or otherwise, make any commitment or incur any liability to any labor organization or group;
(o) make any acquisition or disposition of a material asset or business (including by merger, consolidation or acquisition of stock or assets), except for (i) any acquisitions in the ordinary course of business for consideration that is not in excess of $10,000,000 in the aggregate; (ii) any disposition of obsolete or worn out equipment or Intellectual Property that is not (or no longer) material to the business of the Company and its Subsidiaries, or (iii) licenses or other dispositions (including abandonment, let lapse and transfer) of Intellectual Property, in the ordinary course of business consistent with past practice;
(p) enter into any new line of business outside of the businesses being conducted by the Company and its Subsidiaries as of the date of this Agreement; or
(iq) agreeauthorize, resolvecommit, authorize resolve or commit enter into a Contract to take any action of the actions prohibited by this Section 5.2.
Appears in 1 contract
Forbearance Covenants. Except (a) as expressly contemplated by this Agreement, (b) as set forth in Section 5.1 or Section 5.2 of the Company Disclosure Letter, (c) as required by applicable Law, Law or by COVID-19 Measures or (d) as approved in advance in writing by the Purchaser (which approval will shall not be unreasonably withheld, conditioned or delayed), during the period from the execution and delivery of this Agreement until the earlier to occur of the termination of this Agreement pursuant to Article IX VIII and the Closing, the Company will shall not, and will shall not permit any of its Subsidiaries to, directly or indirectly:
(a) take any action set forth in Section 4.1 13(b) or 13(c) of the Stockholders AgreementCertificate of Designations;
(b) acquire or agree to acquire, directly or indirectly, by purchase, merger, consolidation or otherwise, any equity or assets constituting all or substantially all a material portion of the business of (or any division of the business of) another Person;
(c) sell, assign, transfer, licenselicense (other than non-exclusive licenses in the ordinary course of business consistent with past practice), sublicense, abandon, permit to lapse, grant a covenant not to xxx, or otherwise dispose of any material Intellectual Property Company Owned IP (other than non-exclusive licenses or sublicenses granted in the ordinary course of business);
(d) disclose, release or otherwise fail to maintain the confidential nature of any source code to Company Software or other Trade Secrets;
(e) (i) authorize for issuance, issue, deliver, sell or transfer or agree or commit to issue, deliver, sell or transfer any shares of capital stock of or other equity interest or convertible security in the Company or any of its Subsidiaries or other rights of any kind to acquire, any shares of capital stock of or any other equity interest in the Company or any of its Subsidiaries, other than (xA) the issuance of capital stock or other equity interests pursuant to any Employee Plan or Plan, (yB) the issuance of capital stock or other equity interests from any wholly owned Subsidiary to the Company or any other wholly owned Subsidiary of the Company, Company or (C) the issuance of Company Common Stock pursuant to the Company Notes; (ii) amend or modify any term or provision of any of the Company’s outstanding equity securities securities; or (iii) accelerate or waive any restrictions pertaining to the vesting of any Company equity-based awards or warrants or other rights of any kind to acquire any shares of capital stock or other equity interests in the Company;
(ef) propose or commit to reclassify, combine, split or subdivide any capital stock of the Company or any of its Subsidiaries 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 any of its Subsidiaries, except for, with respect to any Subsidiary of the Company, any intercompany restructuring, recapitalization or similar transaction that will not have a Company Material Adverse Effect;
(f) enter into, amend prevent or terminate delay the consummation of the Casdin Transaction or the other transactions contemplated by this Agreement or result in any Contract with Starboard Value LP or any of its Affiliatesadverse impact on Purchaser;
(g) except as required under applicable Law or the terms of any Employee Plan existing or as set forth in Section 5.2(g) of the date of this AgreementCompany Disclosure Letter, (i) increase the compensation or benefits payable to any current or former director (A) director, (B) executive officer, or executive officer (C) employee or independent contractor, other than increases with respect to employees at the Director level or below in the ordinary course of business consistent with past practice, by no more than ten percent of such individual’s compensation or benefits payable immediately prior to such increase, and as otherwise not prohibited by Section 5.2(h), (ii) accelerate the vesting or payment of any Employee Plan or other compensation or benefit plan, program, agreement or arrangement for, any director, employee or independent contractor, (iii) enter into, adopt, amend, terminate or increase the coverage or benefits available under any Employee Plan (or other compensation or benefit plan, program, agreement or arrangement that would be an Employee Plan if in effect on the date of this Agreement), other than ordinary course changes in relation to annual renewals, or (iv) grant any equity or equity-based awards of the Company or any of its Subsidiaries to any director, employee or independent contractor of the Company whose or any of its Subsidiaries;
(h) (i) hire, offer to hire or promote any new Person with an annual base salary is at least or annualized fee in excess of $300,000 (in each case250,000, other than annual merit increases in the ordinary course of business) or (ii) terminate the employment or service of any employee with an annual salary or annualized fee in excess of $250,000 or any employee with a title of Director or above of the Company or any of its Subsidiaries other than for “cause” or (iii) institute any general layoff of employees or implement any plant closings, reductions in force, furloughs, temporary layoffs, early retirement plan or announce the planning of any such action;
(i) enter into into, amend or extend any new, Collective Bargaining Agreement or amend other Contract with any existing, employment, severance, change in control, retention, bonus guarantee, or collective bargaining agreement union or similar agreement or arrangementlabor organization;
(j) waive or release any material noncompetition, nonsolicitation, nondisclosure, noninterference, nondisparagement or other restrictive covenant obligation of any current or former employee or independent contractor;
(k) (i) make any loans, advances or capital contributions to, or investments in, any other Person, other than investments by the Company or a wholly owned Subsidiary of the Company to a wholly owned Subsidiary of the Company or the Company or advances of expenses to any director, officer, employee or agent of the Company in connection with advancement obligations in effect on the date of this Agreement, (ii) incur, assume or modify any material indebtedness or (iii) assume, guarantee, endorse, xxxxx x xxxx (other than a Permitted LienLien or any lien on Intellectual Property) on any of the Company’s assets as security or otherwise become liable for indebtedness of another Person (excluding the Company or any of its Subsidiaries); or
(il) agree, resolve, authorize or commit to take any action prohibited by this Section 5.2.
Appears in 1 contract
Samples: Series B 1 Convertible Preferred Stock Purchase Agreement (Fluidigm Corp)
Forbearance Covenants. Except (a) as expressly contemplated by this Agreement, (b) as set forth in Section 5.1 or Section 5.2 of During the Company Disclosure Letter, (c) as required by applicable Law, or (d) as approved in advance in writing by the Purchaser (which approval will not be unreasonably withheld, conditioned or delayed), during the period from the execution and delivery of this Agreement until the earlier to occur of the termination of this Agreement pursuant to Article IX and the ClosingPre-Closing Period, the Company will not, and will not permit any of its Subsidiaries to, directly to (in each case subject to the Covenant Exceptions (other than clause (i) thereto) or indirectly:as expressly contemplated by another provision of this Agreement):
(a) take amend or otherwise change the Charter, the Bylaws or any action set forth in Section 4.1 of the Stockholders Agreementother similar organizational document;
(b) acquire propose or agree to acquireadopt a plan of complete or partial liquidation, directly or indirectly, by purchasedissolution, merger, consolidation consolidation, restructuring, recapitalization or otherwise, equity or assets constituting all or substantially all of the business of (or any division of the business of) another Personother reorganization;
(c) sell, assign, transfer, license, sublicense, abandon, permit to lapse, grant a covenant not to xxx, or otherwise dispose of any material Intellectual Property (other than non-exclusive licenses or sublicenses granted in the ordinary course of business);
(d) (i) authorize for issuance, issue, deliver, sell or transfer deliver, or agree or commit to issue, sell or deliver, any Company Securities (including any Company Equity-Based Awards) (whether through the issuance or granting of options, restricted stock units, warrants, commitments, subscriptions, rights to purchase or otherwise), except, in each case, (i) for the issuance, delivery or sale of (or agreement or commitment to issue, sell or transfer any deliver) shares of capital stock Company Common Stock pursuant to Company Equity-Based Awards outstanding as of the date of this Agreement or other equity interest or convertible security pursuant to the ESPP, in each case, in accordance with their terms and the terms of this Agreement (including as limited by Section 2.8(e)); (ii) in connection with agreements in effect on the date of this Agreement that are set forth on Section 5.2(c) of the Company Disclosure Letter; or (iii) in connection with a conversion of shares of Company Class B Common Stock into Company Class A Common Stock pursuant to the terms of the Charter;
(d) acquire, repurchase or redeem any of its Subsidiaries equity securities, except, in each case, (i) pursuant to the terms and conditions of Company Equity-Based Awards outstanding as of the date of this Agreement in accordance with their terms as in effect as of the date of this Agreement; or other rights to otherwise satisfy Tax obligations with respect to awards granted pursuant to Company Equity Plans or to pay the exercise price of any kind to acquireCompany Options, any in each case in accordance with the existing terms of the applicable Company Equity Plan as in effect on the date of this Agreement; (ii) in connection with a conversion of shares of capital stock Company Class B Common Stock into Company Class A Common Stock pursuant to the terms of the Charter; or any other equity interest in (iii) for transactions between the Company or and any of its Subsidiaries;
(e) (i) adjust, other than (x) the issuance of capital stock split, subdivide, combine or other equity interests pursuant to any Employee Plan or (y) the issuance of capital stock or other equity interests from any wholly owned Subsidiary to the Company or any other wholly owned Subsidiary of the Company, (ii) amend or modify any term or provision of any of the Company’s outstanding equity securities or (iii) accelerate or waive any restrictions pertaining to the vesting of any Company equity-based awards or warrants or other rights of any kind to acquire reclassify any shares of capital stock or other equity interests or voting interests; (ii) declare, set aside, establish a record date for, authorize or pay any dividend or other distribution (whether in the Company;
(ecash, shares or property or any combination thereof) propose or commit to reclassify, combine, split or subdivide in respect of any shares of its capital stock or other equity or voting interests, or make any other actual, constructive or deemed distribution in respect of its capital stock or other equity or voting interests, except for cash dividends made by any wholly-owned Subsidiary of the Company 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 to the Company or one of its other wholly-owned Subsidiaries; (iii) pledge or encumber any of its Subsidiaries, except for, with respect to capital stock or other equity or voting interests; or (iv) modify the terms of any Subsidiary of the Company, any intercompany restructuring, recapitalization its capital stock or similar transaction that will not have a Company Material Adverse Effectother equity or voting interests;
(f) enter intoacquire or agree to acquire (by merger, amend consolidation or terminate acquisition of stock or assets) any Contract with Starboard Value LP third Person or any of its Affiliatesmaterial equity interest in such Person, or enter into any contractual joint venture or similar arrangement or partnership with any third Person;
(g) except as required under applicable Law acquire, or the terms agree to acquire, fee ownership (or its jurisdictional equivalent) of any Employee Plan existing as of the date of this Agreement, real property;
(i) increase the compensation incur or benefits payable to assume any current Indebtedness or former director or executive officer of the Company or issue any employee of the Company whose annual base salary is at least $300,000 (debt securities, except, in each case, other than annual merit increases (A) short-term debt incurred to fund operations of the business pursuant to the Loan Agreement in the ordinary course of business; (B) for loans or advances between Subsidiaries of the Company or between the Company and its Subsidiaries; (C) obligations incurred pursuant to business credit cards in the ordinary course of business; or (D) pursuant to the Loan Agreement as in effect on the date hereof; (ii) enter into any newassume, or amend any existing, employment, severance, change in control, retention, bonus guarantee, endorse or collective bargaining agreement otherwise become liable or similar agreement responsible (whether directly, contingently or arrangement;
otherwise) for the obligations of any third Person, except with respect to obligations of Subsidiaries of the Company; (iiii) make any loans, advances or capital contributions to, or investments in, any other third Person, except, in each case, for (A) extensions of credit to customers in the ordinary course of business; (B) advances of reimbursable expenses to directors, officers and other than investments by employees, in each case, in the Company ordinary course of business; and (C) for loans or a wholly advances between wholly-owned Subsidiary of the Company to a wholly owned Subsidiary Subsidiaries of the Company or between the Company and its wholly-owned Subsidiaries and capital contributions in or advances of expenses to any director, officer, employee or agent Subsidiaries of the Company; or (iv) mortgage, pledge or otherwise encumber any assets, tangible or intangible, or create any lien thereon (other than Permitted Liens);
(i) except (i) in order to comply with applicable Law, (ii) as required pursuant to the existing terms of any Company in connection with advancement obligations Benefit Plan in effect on the date of this Agreement, (iilisted on Section 3.19(a) incurof the Company Disclosure Letter and made available to Parent, assume or modify any material indebtedness or (iii) assumeas provided in this Agreement, guarantee(A) establish, endorseadopt, xxxxx x xxxx enter into, terminate or amend any material Company Benefit Plan (or any plan, policy, agreement, Contract or arrangement that would be a Company Benefit Plan if in effect on the date of this Agreement), or take any action to accelerate the vesting, payment or funding of any compensation or benefits under, any Company Benefit Plan (or any plan, policy, agreement, Contract or arrangement that would be a Company Benefit Plan if in effect on the date of this Agreement); (B) grant to any Service Provider whose annual cash on target compensation exceeds $400,000 any increase or decrease in cash on target compensation, bonus, incentive or fringe or other benefits; (C) grant to any Service Provider any new or increased change in control, retention, transaction or stay bonus, tax gross-up, special remuneration, equity or equity-based award, bonus or incentive, deal or stay bonus severance or termination pay, or materially amend or modify any such arrangement; (D) enter into, terminate, amend or modify any employment agreement, offer letter, consulting agreement or arrangement, or change in control, retention, transaction or stay bonus, tax gross-up, special remuneration, severance or termination agreement or arrangement with any Service Provider (other than entering into at-will offer letters with newly-hired non-officer employees with total annual cash compensation equal to or less than $250,000 in the ordinary course of business consistent with past practice); or (E) terminate, engage or hire any employee or individual service provider of the Company or any of its Subsidiaries with total annual cash on target compensation in excess of $400,000, other than terminations for cause;
(j) xxxxxx, release, waive or compromise any pending or threatened material Legal Proceeding, except for the settlement of any Legal Proceedings (i) solely for monetary damages in an amount (A) not in excess of $1,000,000 or (B) that does not exceed the amount reflected or reserved against in the Audited Company Balance Sheet; or (ii) settled in compliance with Section 6.15;
(k) except as required by applicable Law or GAAP, (i) other than in the ordinary course of business, revalue in any material respect any of its properties or assets, including writing-off notes or accounts receivable; or (ii) make any change in any of its accounting principles or practices;
(l) (i) make or change any material Tax election; (ii) settle or compromise any material Tax claim or assessment; (iii) consent to any extension or waiver of any limitation period with respect to any material Tax claim or assessment; (iv) file an amended Tax Return that could materially increase the Taxes payable by Parent or its Affiliates (including, after the Closing, the Company and its Subsidiaries); (v) surrender any right to claim a refund of material Taxes; (vi) fail to pay any material Tax that becomes due and payable except to the extent such Tax is contested in good faith; or (vii) enter into a closing agreement with any Governmental Authority regarding any material Tax.
(m) (i) incur, authorize or commit to incur any material capital expenditures other than (A) consistent in all material respects with the capital expenditure budget set forth in Section 5.2(m) of the Company Disclosure Letter; (B) pursuant to obligations imposed by Material Contracts or Leases; or (C) pursuant to agreements in effect prior to the date of this Agreement; (ii) except in the ordinary course of business (x) enter into any Contract which if entered into prior to the date hereof would be a Material Contract or (y) modify or amend any material rights under any Material Contract in a manner that is adverse in any material respect to the Company and its Subsidiaries, taken as a whole, or terminate any Material Contract (other than any Material Contract that has expired in accordance with its terms); (iii) maintain insurance at less than current levels or otherwise in a manner inconsistent with past practice; (iv) engage in any transaction with, or enter into any agreement, arrangement or understanding with, any Affiliate of the Company or other Person covered by Item 404 of Regulation S-K promulgated by the SEC that would be required to be disclosed pursuant to Item 404; (v) effectuate a “plant closing,” “mass layoff” (each as defined in the WARN Act) or other employee layoff event affecting in whole or in part any site of employment, facility, operating unit or employee (vi) grant any material refunds, credits, rebates or other allowances to any end user, customer, reseller or distributor, in each case other than in the ordinary course of business; or (vii) waive, release, grant, encumber or transfer any right of material value to the Company and its Subsidiaries, taken as a whole, other than in the ordinary course of business;
(n) negotiate, modify, extend, terminate or enter into any Labor Agreement, or recognize or certify any labor union, works council or other labor organization as the bargaining representative for any employees of the Company or its Subsidiaries;
(o) waive or release any noncompetition, nonsolicitation, nondisclosure, noninterference, nondisparagement, or other restrictive covenant obligation of any Service Provider;
(p) sell, assign, transfer, lease, license (other than a Permitted Lien), abandon, let lapse, cancel, dispose of, or otherwise subject to any lien or other encumbrance (in each case, other than Permitted Liens) on any material Company Intellectual Property, except for non-exclusive licenses of Intellectual Property entered in the ordinary course of business;
(q) disclose or abandon any material Trade Secrets, except in the ordinary course of business, and to the extent not economically desirable to maintain for the conduct of the Company’s assets as security business of the Company and its Subsidiaries, or otherwise become liable disclose, license, make available, or deliver any source code for indebtedness any Company Software to any Person except to a third-party service provider or other agent obligated in writing to (i) maintain the confidentiality of, and not disclose, such source code; and (ii) use such source code only in the provision of another Person (excluding services to the Company or any of its Subsidiaries;
(r) make any material change to the Company’s or any of its Subsidiaries’ policies or procedures with respect to their Processing of Personal Information, except to remediate any privacy or security issue that the Company or any of its Subsidiaries reasonably believes is material, to comply with applicable Privacy and Data Security Requirements (but with respect to Privacy and Data Security Requirements that consist of contractual obligations, solely those that are in effect during the Pre-Closing Period (provided that any such contractual obligations entered into after the date hereof must be entered into in accordance with the terms of this Agreement and in the ordinary course of business)), or as otherwise directed or required by a Governmental Authority; or
(is) agreeenter into, resolve, authorize or agree or commit to enter into, a Contract to take any action of the actions prohibited by this Section 5.2.
Appears in 1 contract
Samples: Merger Agreement (ForgeRock, Inc.)
Forbearance Covenants. Except (a) as expressly contemplated by this Agreement, (bi) as set forth in Section 5.1 or Section 5.2 of the Company Disclosure Letter, ; (c) as required by applicable Law, or (dii) as approved in advance in writing by the Purchaser Parent I (which approval will not be unreasonably withheld, conditioned or delayed); or (iii) as expressly contemplated by the terms of this Agreement, at all times during the period from commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant to Article IX VIII and the ClosingCompany Merger Effective Time, the Company Parties will not, and will not permit any of its Subsidiaries Subsidiaries, to, directly or indirectly:
(a) take amend the Charter, the Bylaws, the Holdings LLCA, or any action set forth in Section 4.1 of the Stockholders Agreementother similar organizational document;
(b) acquire propose or agree to acquireadopt a plan of complete or partial liquidation, directly or indirectly, by purchasedissolution, merger, consolidation consolidation, restructuring, recapitalization or otherwise, equity or assets constituting all or substantially all of the business of (or any division of the business of) another Personother reorganization;
(c) issue, sell, assign, transfer, license, sublicense, abandon, permit to lapse, grant a covenant not to xxx, or otherwise dispose of any material Intellectual Property (other than non-exclusive licenses or sublicenses granted in the ordinary course of business);
(d) (i) authorize for issuance, issue, deliver, sell or transfer deliver or agree or commit to issue, deliver, sell or transfer deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities, except (A) for the issuance or sale of shares of Company Common Stock or Holdings Units in connection with the exercise or settlement (as applicable) of Convertible Notes, Company Options, Company PSUs, Company RSUs, Holdings RSUs or Holdings Incentive Units outstanding as of the Capitalization Date in accordance with their terms and pursuant to the ESPP in accordance with its terms (as modified by Section 2.8(g) and Section 2.8(h)); (B) in connection with agreements in effect on the date hereof and made available to the Parent Entities (or the form of such agreement has been made available to the Parent Entities and any such agreement is substantially identical to such form), including the maximum amount of Company Securities to be issued thereunder; or (C) in connection with any Holdings Unit Redemption;
(d) directly or indirectly acquire, repurchase or redeem any securities, except for (A) repurchases, withholdings, or cancellations of Company Securities pursuant to the terms and conditions of the Capped Call Documentation, Company Options, Company RSUs, Company PSUs, Holdings RSUs or Holdings Incentive Units outstanding as of the date hereof in accordance with their terms as of the date hereof; (B) transactions between the Company and any of its direct or indirect Subsidiaries; or (C) in connection with any Holdings Unit Redemption;
(e) (A) adjust, split, combine or reclassify any shares of capital stock of stock, or other equity interest issue or convertible security in the Company authorize or any of its Subsidiaries or other rights of any kind to acquire, any shares of capital stock of or any other equity interest in the Company or any of its Subsidiaries, other than (x) propose the issuance of any other Company Securities in respect of, in lieu of or in substitution for, shares of its capital stock or other equity interests pursuant to or voting interest; (B) declare, set aside or pay any Employee Plan or (y) the issuance of capital stock dividend or other equity interests from any wholly owned Subsidiary to the Company distribution (whether in cash, shares or property or any other wholly owned Subsidiary combination thereof) in respect of the Company, (ii) amend or modify any term or provision of any of the Company’s outstanding equity securities or (iii) accelerate or waive any restrictions pertaining to the vesting of any Company equity-based awards or warrants or other rights of any kind to acquire any shares of capital stock or other equity interests or voting interest, or make any other actual, constructive or deemed distribution in the Company;
(e) propose or commit to reclassify, combine, split or subdivide any capital stock respect of the Company 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 any of its Subsidiariesother equity or voting interest, except for, with respect to for cash dividends made by any direct or indirect wholly owned Subsidiary of Holdings to the Company, Holdings, or one of Holdings’ other wholly owned Subsidiaries; (C) pledge or encumber any intercompany restructuring, recapitalization shares of its capital stock or similar transaction that will not have a Company Material Adverse Effectother equity or voting interest; or (D) modify the terms of any shares of its capital stock or other equity or voting interest;
(f) enter into(A) incur or assume any Indebtedness (including any long-term or short-term debt) or issue any debt securities, amend or terminate any Contract with Starboard Value LP or any of its Affiliates;
except (g1) except as required under applicable Law or the terms of any Employee Plan existing as of the date of this Agreement, (i) increase the compensation or benefits payable to any current or former director or executive officer of the Company or any employee of the Company whose annual base salary is at least $300,000 (in each case, other than annual merit increases for trade payables incurred in the ordinary course of business; (2) obligations incurred pursuant to business credit cards in the ordinary course of business; and (3) intercompany loans or advances between or among Holdings, the Company and/or Holdings’ direct or indirect wholly-owned Subsidiaries; or (iiB) enter into any newassume, or amend any existing, employment, severance, change in control, retention, bonus guarantee, endorse or collective bargaining agreement otherwise become liable or similar agreement responsible (whether directly, contingently or arrangementotherwise) for the obligations of any other Person, except with respect to obligations of Holdings or any direct or indirect wholly owned Subsidiaries of Holdings;
(ig) mortgage or pledge any of its and its Subsidiaries’ assets, tangible or intangible, or create or incur any lien thereupon (other than Permitted Liens), other than in connection with financing transactions permitted by Section 5.2(f) or consented to by Parent I;
(h) make any loans, advances or capital contributions to, or investments in, any other Person, except for (1) extensions of credit to customers in the ordinary course of business; (2) advances to directors, officers and other employees for travel and other business-related expenses, in each case in the ordinary course of business and in compliance in all material respects with the Company Group’s policies related thereto; and (3) loans, advances or capital contributions to, or investments in, Holdings or any direct or indirect wholly-owned Subsidiaries of Holdings;
(i) acquire, lease, license, sell, abandon, transfer, assign, guarantee, or exchange any assets, tangible or intangible (including any Company Intellectual Property), in each case in excess of $250,000 individually, and other than investments by (1) the Company sale, lease or a wholly owned Subsidiary licensing of products or services of the Company to a wholly owned Subsidiary Group or other materials embodying Company Intellectual Property in the ordinary course of business; (2) the acquisition, assignment or abandonment of immaterial Company Intellectual Property in connection with the exercise of the reasonable business judgment of the Company or Group in the ordinary course of business; (3) the abandonment of trade secrets in the ordinary course of business and to the extent not economically desirable to maintain for the conduct of the business of the Company Group; and (4) any capital expenditures permitted by (or advances consented to by Parent I under) Section 5.2(n);
(j) (A) enter into, adopt, amend (including accelerating the vesting, payment or funding), modify or terminate any bonus, profit sharing, compensation, severance, termination, option, appreciation right, performance unit, phantom equity, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, severance or other Employee Plan or employee benefit agreement, trust, plan, fund or other arrangement for the compensation, benefit or welfare of expenses any director, officer or employee of the Company Group in any manner (other than at-will offer letters (or, for jurisdictions outside of the United States, employment agreements that provide for employment periods or rights no greater than required by applicable law) entered into with new hires of employees of the Company Group in the ordinary course of business and consistent with past practice and whose annual salary is less than $200,000); (B) increase or decrease the compensation of any director, officer, employee, individual consultant, former employee, individual independent contractor, or other individual service provider of the Company Group, pay any special bonus or special remuneration to any director, officer, employee employee, individual consultant, former employee, individual independent contractor, or agent other individual service provider of the Company in connection with advancement obligations Group, or pay any benefit not required by (or accelerate the time of payment or vesting of any payment becoming due under) any Employee Plan as in effect on as of the date hereof, except in the case of this Agreementeach of (A) and (B), (ii1) incur, assume as may be required by applicable law or modify any material indebtedness the terms of the applicable Employee Plan in effect as of the date hereof; or (iii2) assumefor increases in base salary for employees of the Company Group below the level of vice president and whose annual salary is less than $200,000 in the ordinary course of business and consistent with past practice (it being understood that these exceptions in the foregoing clauses (1) and (2) will not apply to any actions otherwise prohibited by Section 5.2(c) or the following sub-clause (C)); (C) enter into any change in control, guaranteeseverance or similar agreement or any retention or similar agreement with any officer, endorseemployee, xxxxx x xxxx director, individual independent contractor, individual consultant, or other individual service provider of the Company Group, or (D) hire, terminate (other than for “cause”), furlough or temporarily lay off any officer, employee, director, individual independent contractor, individual consultant, or other individual service provider of the Company Group with an annual base salary or wages (or, in the case of non-employee service providers, equivalent compensation) of $200,000 or more.
(k) settle, release, waive or compromise any pending or threatened material Legal Proceeding or other claim, except for the settlement of any Legal Proceedings or other claim that is (A) reflected or reserved against in the Audited Company Balance Sheet; (B) for solely monetary payments of no more than $200,000 individually and $500,000 in the aggregate; or (C) settled in compliance with Section 6.15;
(l) except as required by applicable law or GAAP, (A) revalue in any material respect any of its properties or assets, including writing-off notes or accounts receivable, other than in the ordinary course of business; or (B) make any change in any of its accounting principles or practices;
(m) except in the ordinary course of business, (A) make or change any material Tax election; (B) settle, consent to or compromise any material Tax claim or assessment or surrender a Permitted Lienright to a material Tax refund; (C) on consent to any extension or waiver of any limitation period with respect to any material Tax claim or assessment; (D) file an amended Tax Return that could materially increase the Taxes payable by the Company or its Subsidiaries; or (E) enter into a closing agreement with any Governmental Authority regarding any material Tax;
(n) incur or commit to incur any capital expenditure(s) other than (1) consistent with the capital expenditure budget set forth in Section 5.2(n) of the Company Disclosure Letter or (2) to the extent that such capital expenditures do not exceed $1,000,000 individually or $5,000,000 in the aggregate;
(o) enter into, modify, amend or terminate any (a) Contracts (other than any Material Contract) that if so entered into, modified, amended or terminated would, individually or in the aggregate, have a Company Material Adverse Effect; or (b) Material Contract or any Contract that would have been a Material Contract if such Contract was in existence as of the date hereof, except in the ordinary course of business or as permitted under Section 5.2(c) and Section 5.2(j);
(p) maintain insurance at less than current levels or otherwise in a manner inconsistent with past practice;
(q) engage in any transaction with, or enter into any agreement, arrangement or understanding with, any Affiliate of the Company or other Person covered by Item 404 of Regulation S-K promulgated by the SEC that would be required to be disclosed pursuant to Item 404;
(r) effectuate or announce any closing, employee layoff, furlough, reduction to terms and conditions of employment or other event affecting in whole or in part any site of employment, facility, operating unit or employee that would result in liability of the Company Group under WARN;
(s) grant any material refunds, credits, rebates or other allowances to any end user, customer, reseller or distributor, in each case other than in the ordinary course of business;
(t) acquire (by merger, consolidation or acquisition of stock or assets) any other Person or any material portion thereof or material equity interest therein or enter into any Contract that involves a joint venture entity, limited liability company or legal partnership (excluding, for avoidance of doubt, reseller agreements and other commercial agreements that do not involve the formation of an entity with any third Person);
(u) (A) enter into any Collective Bargaining Agreement or agreement or arrangement to form a works council or other Contract with any labor union or other labor organization or works council, except to the extent required by applicable law; provided that the Company Parties or their applicable Subsidiaries must first provide Parent I and its counsel reasonable advance notice thereof and a reasonable opportunity to review and comment thereon, and the Company Parties and such Subsidiaries will give due consideration to all reasonable additions, deletions, changes or other recommendations suggested thereto by Parent I or its counsel; or (B) recognize or certify any labor union, works council or other labor organization, or group of employees, as the bargaining representative for any employees of the Company Group, except as required by applicable law;
(v) waive or release any noncompetition, nonsolicitation, nondisclosure, noninterference, nondisparagement, or other restrictive covenant obligation of any current or former employee or independent contractor;
(w) adopt or implement any stockholder rights plan or similar arrangement, in each case, applicable to the Mergers or any other transaction consummated pursuant to the Parent Entities’ rights under Section 5.3(d)(i)(2) or Section 5.3(d)(ii)(3);
(x) enter into, authorize any of, or agree or commit to enter into a Contract to take any of the Company’s assets as security or otherwise become liable for indebtedness of another Person (excluding the Company or any of its Subsidiaries); or
(i) agree, resolve, authorize or commit to take any action actions prohibited by this Section 5.2.
Appears in 1 contract
Samples: Merger Agreement (Pluralsight, Inc.)
Forbearance Covenants. Except (a) as expressly contemplated by this Agreement, (bA) as set forth in Section 5.1 or Section 5.2 of the Company Disclosure Letter, ; (c) as required by applicable Law, or (dB) as approved in advance in writing (including by email) by Parent (it being understood that Parent will not unreasonably withhold, condition or delay its consent to take (or refrain from taking) any action contemplated by Section 5.2(h), Section 5.2(j), Section 5.2(q), Section 5.2(t), Section 5.2(y) and, solely with respect to the foregoing clauses, Section 5.2(z)); or (C) as expressly required by the Purchaser (which approval will not be unreasonably withheldterms of this Agreement, conditioned or delayed), at all times during the period from commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of the (1) termination of this Agreement pursuant to Article IX VIII and the Closing(2) Effective Time, the Company will not, and will not permit any of its Subsidiaries the Company Subsidiaries, to, directly or indirectly:
(a) take declare, accrue, set aside or pay any action set forth dividend or make any other distribution (whether in Section 4.1 of the Stockholders Agreement;
(b) acquire or agree to acquirecash, directly or indirectly, by purchase, merger, consolidation stock or otherwise, equity or assets constituting all or substantially all of the business of (or any division of the business of) another Person;
(c) sell, assign, transfer, license, sublicense, abandon, permit to lapse, grant a covenant not to xxx, or otherwise dispose in respect of any material Intellectual Property shares of its capital stock (other than non-exclusive licenses consolidated cash management transfers among the Acquired Entities, the net effect of which does not change the consolidated cash balance of the Acquired Entities), or sublicenses granted in the ordinary course of business);
(d) (i) authorize for issuancerepurchase, issue, deliver, sell redeem or transfer or agree or commit to issue, deliver, sell or transfer any shares of capital stock of or other equity interest or convertible security in the Company or otherwise reacquire any of its Subsidiaries or other rights of any kind to acquire, any shares of capital stock of or any other equity interest in the Company or any of its Subsidiaries, other than (x) the issuance of capital stock or other equity interests pursuant to any Employee Plan or (y) the issuance of capital stock or other equity interests from any wholly owned Subsidiary to the Company or any other wholly owned Subsidiary of the Company, (ii) amend or modify any term or provision of any of the Company’s outstanding equity securities or (iii) accelerate or waive any restrictions pertaining to the vesting of any Company equity-based awards or warrants or other rights of any kind to acquire any shares of capital stock or other equity interests in securities or rights, warrants or options to acquire any such shares or securities of the Company, other than: (i) the acquisition by the Company of shares of Company Common Stock in connection with the surrender of shares of Company Common Stock by holders of Company Options in order to pay the exercise price of the Company Options, (ii) the withholding of shares of Company Common Stock to satisfy Tax obligations with respect to awards granted pursuant to the Company Equity Plans; and (iii) the acquisition by the Company of Company Options or Company Restricted Stock in accordance with their terms in effect as of the Agreement Date in connection with the forfeiture of such awards;
(eb) propose sell, issue, grant, authorize the issuance or commit grant of, or materially amend the terms of any: (i) capital stock or other security; (ii) option, restricted stock unit, restricted stock award or other equity-based compensation award (whether payable in cash, stock or otherwise), call, warrant or right to reclassifyacquire any capital stock or other security; or (iii) instrument convertible into or exchangeable for any capital stock or other security, in each case whether issued pursuant to an Company Equity Plan or not (except that the Company may issue shares of Company Common Stock upon the valid exercise of Company Options outstanding as of the Agreement Date or the vesting or settlement of Company RSUs);
(c) split, divide, subdivide, combine, split consolidate or subdivide reclassify any shares of its capital stock of the or other securities (including all Company Securities), or issue or authorize the issuance of any other securities in respect of, in lieu of, of or in substitution for, for shares of its capital stock or other securities (including all Company Securities);
(d) except as otherwise stated in Section 2.8, amend or waive any of its rights under, or accelerate the vesting under, any provision of any of the Company’s stock option or equity compensation plans (including the Company Equity Plans), any provision of any agreement evidencing any outstanding Company Options, any outstanding Company RSUs, or otherwise modify any of the terms of any outstanding equity-based compensation award or other security or any related Contract;
(e) adopt, approve or implement any stockholder rights plan (or similar plan commonly referred to as a “poison pill”), tax benefits preservation plan (or similar plan), or related agreement, other than to expressly permit the transactions contemplated hereby under the NOL Plan;
(f) amend or permit the adoption of any amendment to its organizational documents, or acquire or enter into an agreement to acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances, or capital contributions to or investments in any Person (other than (A) to or in an Acquired Entity or (B) for employee loans or advances of travel and reasonable business expenses and extended payment terms for Customers, in each case subject to applicable Laws and only in the ordinary course of business consistent with past practices);
(g) acquire (including by merger, consolidation or acquisition of stock or assets) any interest in any other Entity;
(h) make any capital expenditure, except that the Acquired Entities may make capital expenditures that, when added to all other capital expenditures made on behalf of the Acquired Entities during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of the (1) termination of this Agreement pursuant to Article VIII and (2) Effective Time, do not exceed $150,000 in the aggregate in any given three month period, commencing from the Agreement Date;
(i) other than in the ordinary course of business consistent with past practices, terminate, enter into or amend or modify in any material respect, or consent to the termination of (other than at its stated expiry date), any Material Contract or any other Contract that, if in effect as of the Agreement Date, would constitute a Material Contract, it being understood that the restrictions set forth in this clause (i) shall not prohibit the Company and the Company Subsidiaries from renewing or entering into Contracts with Customers that would by their terms generate revenue for the benefit of the Company or any of its Subsidiariesthe Company Subsidiaries to the extent that the renewal or entering into of such Contract is done in the ordinary course of business consistent with past practices and in a manner and on terms that are consistent in all material respects with the past practices of the Company;
(j) (i) acquire, lease or license any material right or asset (including any Intellectual Property Rights) from any other Person; (ii) sell or otherwise dispose of, or lease or license, any material right or asset to any other Person; or (iii) waive or relinquish any right, except forin case of each of (i), (ii) and (iii) above, for (A) non-exclusive licenses of commercially available, “off-the-shelf” software in the ordinary course of business consistent with past practices; (B) non-exclusive licenses of Company Intellectual Property Rights to Customers in the ordinary course of business consistent with past practices; and (C) leases, which are addressed in subsection (k) below;
(k) enter into any Contract to purchase or sell any interest in real property, enter into any lease, sublease, license or other occupancy agreement with respect to any Subsidiary of the Companyreal property, any intercompany restructuringor alter, recapitalization or similar transaction that will not have a Company Material Adverse Effect;
(f) enter intoamend, amend modify, violate or terminate any Contract with Starboard Value LP or any of its Affiliates;
(g) except as required under applicable Law or the terms of any Employee Plan Company Lease, in each case including renewals of existing as Company Leases;
(l) repurchase, prepay or incur any Indebtedness for borrowed money or guaranteed any such Indebtedness of the date of this Agreementanother Person, (i) increase the compensation issue or benefits payable sell any debt securities or options, warrants, calls, or other rights to acquire any current debt securities or former director or executive officer other Indebtedness of the Company or any employee of the Company whose Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other Contract to maintain any financial statement condition of any other Person (other than a wholly owned Subsidiary of such Acquired Entity); or enter into any arrangement having the economic effect of any of the foregoing;
(m) except as required by applicable Law or GAAP, write off as uncollectible, or establish any extraordinary reserve with respect to, any account receivable or other Indebtedness;
(n) make any pledge of any of its assets or otherwise permit any of its assets to become subject to any liens (other than Permitted Liens), except as such pledges and liens relate to immaterial assets made in the ordinary course of business and consistent with past practices;
(o) (i) adopt, establish or enter into any Company Benefit Plan; (ii) except as otherwise stated in Section 2.8 or as required by applicable Laws, cause or permit any Company Benefit Plan to be amended in any material respect or terminated, or waive any rights under, or permit the acceleration of vesting under any provision of any Company Benefit Plan; (iii) make any contribution to any Company Benefit Plan, other than contributions required by applicable Laws, the terms of such Company Benefit Plans as in effect on the date hereof, or that are made in the ordinary course of business consistent with past practices; or (iv) grant or pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, or grant any rights to receive severance, termination, retention or tax gross up compensation or benefits to, any of its current or former directors, officers or employees;
(i) hire any employee at the level of director or above; (ii) hire any employee with an annual base salary in excess of $150,000; (iii) promote any employee to a level of director or above; or (iv) terminate any employee (except for “cause”);
(q) change any of its pricing policies, product return policies, product maintenance policies, service policies, product modification or upgrade policies, personnel policies or other business policies in a manner that is at least $300,000 material to the business of the Acquired Entities or otherwise engage in any of the following activities in any manner that is outside the ordinary course of business consistent with past practices: (i) any promotional sales or discount activity with any Customers with the intent of accelerating to prior fiscal quarters (including the current fiscal quarter) sales that would otherwise be expected (based on past practice) to occur in subsequent fiscal quarters; (ii) any practice that would have the effect of accelerating to prior fiscal quarters (including the current fiscal quarter) collections of receivables that would otherwise be expected (based on past practice) to be made in subsequent fiscal quarters; (iii) any practice that would have the effect of postponing to subsequent fiscal quarters any payments by the Company or any of the Company Subsidiaries that would otherwise be expected (based on past practice) to be made in prior fiscal quarters (including the current fiscal quarter); or (iv) any other promotional sales or discount activity in a manner outside the ordinary course of business consistent with past practices;
(r) change any of its methods of accounting or accounting practices or internal controls (including internal controls over financial reporting) in any material respect, in each case except for any such change required by a change in GAAP or applicable Law;
(s) except as otherwise required by applicable Laws, (i) prepare or file any income or other material Tax Return or make any Tax election, in each case, that is inconsistent with past practices; (ii) settle or otherwise compromise any claim, notice, audit report or assessment relating to any Tax, enter into any closing agreement or similar agreement relating to any Tax, or otherwise settle any dispute relating to any Tax; (iii) request any ruling or similar guidance with respect to Taxes; or (iv) consent to an extension or waiver of the statutory limitation period applicable to a claim or assessment in respect of any material Tax;
(t) commence or settle any Legal Proceeding;
(u) enter into any material transaction with any of its Affiliates (other than annual merit increases the Company and any Company Subsidiary), other than pursuant to written arrangements in effect on the Agreement Date and set forth in the Company Disclosure Letter;
(v) other than in the ordinary course of business consistent with past practices, enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding, or similar Contract with respect to any joint venture, strategic partnership or alliance;
(w) except in connection with actions permitted by Section 5.3, take any action to exempt any Person from, or make any acquisition of securities of the Company by any Person not subject to, any state takeover statute or similar statute or regulation that applies to Company with respect to an Acquisition Proposal or otherwise, including the restrictions on “business combinations” set forth in Section 203 of the DGCL, except, in each case, for Parent, Merger Sub or any of their respective Subsidiaries or Affiliates, or the Merger;
(x) incur or pay (i) any Transaction Expenses to Persons not specified on Section 3.25 of the Company Disclosure Letter without the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed with respect to the addition of advisors not specified on Section 3.25 of the Company Disclosure Letter); or (ii) any Transaction Expenses in excess of (A) in the case of the Company Financial Advisor, the amount required to be paid by the Company under the engagement letter with the Company Financial Advisor in the form provided to Parent, as set forth in Section 3.25 of the Company Disclosure Letter; and (B) in the case of other advisors identified in Section 3.25 of the Company Disclosure Letter, such advisors’ regular hourly rates as in effect from time to time;
(y) pay any liability in advance of the date on which it is due and payable in accordance with its terms other than in the ordinary course of business) or (ii) enter into any new, or amend any existing, employment, severance, change in control, retention, bonus guarantee, or collective bargaining agreement or similar agreement or arrangement;
(i) make any loans, advances or capital contributions to, or investments in, any other Person, other than investments by the Company or a wholly owned Subsidiary of the Company to a wholly owned Subsidiary of the Company or the Company or advances of expenses to any director, officer, employee or agent of the Company in connection with advancement obligations in effect on the date of this Agreement, (ii) incur, assume or modify any material indebtedness or (iii) assume, guarantee, endorse, xxxxx x xxxx (other than a Permitted Lien) on any of the Company’s assets as security or otherwise become liable for indebtedness of another Person (excluding the Company or any of its Subsidiaries); or
(iz) agree, resolve, authorize agree or commit to take take, or authorize, any action of the actions prohibited by this Section 5.2.
Appears in 1 contract
Samples: Merger Agreement (Echelon Corp)
Forbearance Covenants. Except (av) as expressly contemplated by the terms of this Agreement, (bw) as set forth in Section 5.1 5.1 or Section 5.2 5.2 of the Company Disclosure Letter, ; (cx) as required by applicable Law, Law (y) for any actions or refraining from any actions taken reasonably and in good faith in response to COVID-19 or COVID-19 Measures or (dz) as approved in advance in writing by the Purchaser Parent (which approval will not be unreasonably withheld, conditioned or delayed), at all times during the period from commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant to Article IX Article VIII and the ClosingEffective Time, the Company will not, and will not permit any of its Subsidiaries Subsidiaries, to, directly or indirectly:
(a) take any action set forth in Section 4.1 of the Stockholders Agreement;
(b) acquire or agree intentionally fail to acquiremaintain, directly or indirectly, by purchase, merger, consolidation or otherwise, equity or assets constituting all or substantially all of the business of (or any division of the business of) another Person;
(c) selllet lapse, assign, transfer, license, sublicensedispose of, abandon, permit to lapse, grant a covenant not to xxxor exclusively license any material Company Intellectual Property, or otherwise dispose of grant permission to enter into the public domain any material trade secrets included in the Company Intellectual Property (Property, in each case, other than non-exclusive licenses or sublicenses granted in the ordinary course of business);
(b) amend the Charter, the Bylaws or any other similar organizational document of the Company or any significant Subsidiary;
(c) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization with respect to the Company or any significant Subsidiary;
(d) (i) authorize for issuance, issue, deliversell, sell or transfer deliver or agree or commit to issue, deliver, sell or transfer deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities, except (i) for the issuance and sale of shares of capital stock of or other equity interest or convertible security in the Company or any of its Subsidiaries or other rights of any kind to acquire, any shares of capital stock of or any other equity interest in the Company or any of its Subsidiaries, other than (x) the issuance of capital stock or other equity interests Common Stock pursuant to any Employee Plan the exercise of Company Options or (y) the issuance settlement of capital stock or other equity interests from any wholly owned Subsidiary to the Company or any other wholly owned Subsidiary Restricted Stock Units outstanding as of the Company, Capitalization Date (or issued thereafter without violating this Section 5.2) in accordance with their terms or (ii) amend in connection with agreements in effect on the date of this Agreement (or modify any term or provision of any of the Company’s outstanding equity securities or (iii) accelerate or waive any restrictions pertaining to the vesting of any Company equity-based awards or warrants or other rights of any kind to acquire any shares of capital stock or other equity interests in the Companyentered into thereafter without violating this Section 5.2);
(e) propose directly or commit to reclassifyindirectly acquire, combine, split repurchase or subdivide redeem 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, shares of capital stock of the Company or any of its Subsidiaries, except for(i) for the acquisition or repurchase of Company Common Stock in connection with any net exercise or net settlement of Company Options or Company Restricted Stock Units, with respect to any Subsidiary or vesting of Company Restricted Stock, in each case, outstanding as of the Company, Capitalization Date in accordance with their terms or (ii) as required by the terms of any intercompany restructuring, recapitalization or similar transaction that will not have a Company Material Adverse EffectEmployee Plan;
(f) enter into(i) split, amend combine or terminate reclassify any Contract with Starboard Value LP shares of capital stock, or issue or authorize or propose the issuance of any other Company Securities in respect of, in lieu of or in substitution for, shares of its capital stock or other equity or voting interest; (ii) declare, set aside or pay any dividend (whether in cash, shares or property or any combination thereof) in respect of any shares of capital stock or other equity or voting interest, or make any other actual, constructive or deemed distribution in respect of the shares of capital stock or other equity or voting interest, except for dividends made by any direct or indirect wholly owned Subsidiary of the Company to the Company or one of its Affiliatesother wholly owned Subsidiaries; or (iii) modify the terms of any shares of the capital stock or other equity or voting interest of the Company or any significant Subsidiary;
(g) except as required under applicable Law or the terms of any Employee Plan existing as of the date of this Agreement, (i) increase incur or assume any indebtedness in respect of borrowed money (including any long-term or short-term debt), or issue any debt securities in excess of $1,000,000, individually or in the compensation or benefits payable to any current or former director or executive officer of aggregate, except (1) borrowings under the Company or any employee of the Company whose annual base salary is at least $300,000 (in each case, other than annual merit increases Company’s existing credit agreement in the ordinary course of business, (2) for trade payables incurred in the ordinary course of business and (3) for loans or advances to direct or indirect wholly owned U.S. Subsidiaries of the Company; or (ii) enter into assume, guarantee, endorse or otherwise become liable (whether directly, contingently or otherwise) for the obligations of any newother Person with respect to indebtedness for borrowed money, except in the ordinary course of business with respect to obligations of direct or indirect wholly owned U.S. Subsidiaries of the Company;
(h) mortgage or pledge any of its and its Subsidiaries’ material assets or property, tangible or intangible, or amend create or suffer to exist any existing, employment, severance, change in control, retention, bonus guarantee, material lien thereupon (other than Permitted Liens or collective bargaining agreement or similar agreement or arrangementany lien consented to by Parent);
(i) make any loans, advances or capital contributions to, or investments in, any other Person, other than except for (i) trade credit and similar loans and advances made to customers and suppliers in the ordinary course of business, (ii) loans, advances or capital contributions to, or investments by the Company in, direct or a indirect wholly owned Subsidiary of the Company to a wholly owned Subsidiary U.S. Subsidiaries of the Company or (iii) advances to directors, officers and employees (A) for travel and other business-related expenses or (B) pursuant to any advancement obligations under the Company’s or its Subsidiaries’ organizational documents, in each case of (ii) or (iii)(A), in the ordinary course of business;
(j) acquire, lease, license, sell, abandon, transfer, assign or exchange any assets, tangible or intangible, in each case in excess of $300,000 individually and $1,200,000 in the aggregate, other than (x) the acquisition of inventory, raw materials and other assets used in connection with the design, manufacture, marketing and sale of Products and services by the Company and its Subsidiaries and/or (y) any capital expenditures permitted by (or advances consented to by Parent) under Section 5.2(o);
(k) except as required by applicable Law or the terms of expenses an existing Employee Plan or as otherwise permitted pursuant to this Agreement (i) enter into, adopt, amend (including accelerating the vesting or time of payment of funding of or waiving any performance or vesting criteria of), modify, trigger an increase in or terminate any bonus, profit sharing, compensation, severance, change in control, retention, termination, option, appreciation right, performance unit, stock equivalent, unit-based, share purchase agreement, pension, retirement, deferred compensation, employment, severance or other Employee Plan or employee benefit agreement, trust, plan, fund or other arrangement for the compensation, benefit or welfare of any former or current director, officer, employee or individual independent contractor in any manner; (ii) increase the compensation or benefits of any former or current director, officer, employee or individual independent contractor, pay any special bonus or special remuneration to any former or current director, officer, employee or individual independent contractor, except in the case of clause (ii) increases in the ordinary course of business for employees below the level of Vice President or individual independent contractors, in either case, with annual cash base compensation of less than $200,000; (iii) enter into any change in control, severance or similar agreement or any retention or similar agreement with any former or current officer, employee, director or individual independent contractor; or (iv) hire or terminate (other than for cause) any director, officer, employee or agent individual independent contractor (other than the hiring or termination in the ordinary course of business of employees or individual independent contractors, in either case, with annual cash base compensation of not more than $200,000), or otherwise make any change in the key management structure (including each individual with a title of Vice President or above) of the Company or its Subsidiaries, including the hiring of additional officers or the termination of existing officers (other than for cause);
(l) settle or release any pending or threatened material Legal Proceeding, except for the settlement of any Legal Proceedings that is (i) reflected or reserved against in connection the Audited Company Balance Sheet; (ii) that does not exceed that which is reflected or reserved against in the Audited Company Balance Sheet or any insurance proceeds or for solely out-of-pocket monetary payments of no more than $250,000 individually and $1,000,000 in the aggregate without an admission of fault; or (iii) settled in compliance with advancement obligations Section 6.15;
(m) except as required by applicable Law or GAAP or Regulation S-X of the Exchange Act, (i) revalue in any material respect any of its properties or assets, including writing-off notes or accounts receivable, other than in the ordinary course of business; or (ii) make any change in any of its accounting principles or practices;
(i) make or change any material Tax election; (ii) settle, consent to or compromise any material Tax claim or assessment or surrender a right to any material Tax refund, offset, or other reduction in liability; (iii) consent to any extension or waiver of any limitation period with respect to any material Tax claim or assessment; (iv) file an amended income or other material Tax Return; (v) enter into any material “closing agreement” as described in Section 7121 of the Code (or any corresponding or similar provision of state, local or non-U.S. law) with any Governmental Authority regarding any Tax; (vi) change any annual accounting period or adopt or change any method of accounting principles or practices (except as may be required under applicable Law); (vii) fail to pay any material Taxes as they become due and payable; or (viii) seek (or permit any Affiliate to seek) a covered loan under paragraph (36) of Section 7(a) of the Small Business Act (15 U.S.C. 636(a)), as added by Section 1102 of the CARES Act, or defer any amounts pursuant to Section 2302 of the CARES Act;
(o) incur or commit to incur any capital expenditure(s) other than (i) consistent with the capital expenditure budget set forth in Section 5.2(o) of the Company Disclosure Letter; or (ii) to the extent that such capital expenditures do not exceed $500,000 individually or $2,000,000 in the aggregate;
(i) enter into, modify or amend any Contract (other than any Material Contract) that if so entered into, modified or amended as of the date hereof would have been a Material Contract; (ii) enter into, modify, amend or voluntarily terminate any Material Contract, except, in each of case (i) or (ii), in the ordinary course of business, as a result of a material breach or a material default by the counterparty thereto or as a result of the expiration of such Contract in accordance with its terms as in effect on the date of this Agreement, (ii) incur, assume or modify any material indebtedness ; or (iii) assumewaive any material term of, guaranteeor waive any material default under, endorseor release, xxxxx x xxxx (other than a Permitted Lien) on settle or compromise any material claim against the Company or any of its Subsidiaries under, or any material liability or obligation owing to the Company’s assets Company or any of its Subsidiaries under, any Material Contract, except in each case in the ordinary course of business (provided, for the avoidance of doubt, that this subsection (p) shall not prohibit any action that is otherwise permitted under any other subsection of Section 5.2);
(q) effectuate a “plant closing,” “mass layoff” (each as security defined in WARN) affecting in whole or otherwise become liable in part any site of employment, facility, operating unit or employee;
(r) acquire (by merger, consolidation or acquisition of stock or assets) any other Person or any material equity interest therein or enter into any material joint venture, partnership, limited liability corporation or similar arrangement with any third Person;
(s) enter into any Collective Bargaining Agreement or recognize or certify any labor union, labor organization, works council or group of employees of the Company or any of its Subsidiaries as the bargaining representative for indebtedness any employees of another Person (excluding the Company or any of its Subsidiaries);
(t) adopt or implement any stockholder rights plan or similar arrangement that would prohibit or prevent the Merger; or
(iu) agree, resolveenter into, authorize any of, or agree or commit to enter into a Contract to take any action of the actions prohibited by this Section 5.25.2.
Appears in 1 contract
Samples: Merger Agreement (Natus Medical Inc)
Forbearance Covenants. Except (a) as expressly contemplated by this Agreement, (bi) as set forth in Section 5.1 or Section 5.2 of the Company Disclosure Letter, ; (c) as required by applicable Law, or (dii) as approved in advance in writing by the Purchaser Parent (which approval will not be unreasonably withheld, conditioned or delayed); or (iii) as expressly contemplated by the terms of this Agreement, at all times during the period from commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant to Article IX VIII and the ClosingEffective Time, the Company will not, and will not permit any of its Subsidiaries Subsidiaries, to, directly or indirectly:
(a) take amend or otherwise change the Charter, the Bylaws or any action set forth in Section 4.1 of the Stockholders Agreementother similar organizational document;
(b) acquire propose or agree to acquireadopt a plan of complete or partial liquidation, directly or indirectly, by purchasedissolution, merger, consolidation consolidation, restructuring, recapitalization or otherwise, equity or assets constituting all or substantially all of the business of (or any division of the business of) another Personother reorganization;
(c) issue, sell, assign, transfer, license, sublicense, abandon, permit to lapse, grant a covenant not to xxx, or otherwise dispose of any material Intellectual Property (other than non-exclusive licenses or sublicenses granted in the ordinary course of business);
(d) (i) authorize for issuance, issue, deliver, sell or transfer deliver or agree or commit to issue, deliver, sell or transfer deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities, except (A) for the issuance and sale of shares of Company Common Stock pursuant to Company Options or Company Stock-Based Awards outstanding as of the Capitalization Date in accordance with their terms and (B) for the granting of Company Stock-Based Awards and Company Options (or, in the case of Company Options, the equivalent value in Company Stock-Based Awards) in the ordinary course of business and consistent with past practice, except as set forth in Section 5.2(c) of the Company Disclosure Letter;
(d) directly or indirectly acquire, repurchase or redeem any securities, except for (A) forfeitures, repurchases or withholding of Company Securities pursuant to the terms and conditions of Company Stock-Based Awards outstanding as of the date of this Agreement in accordance with their terms as of the date of this Agreement, or (B) transactions between the Company and any of its direct or indirect wholly-owned Subsidiaries;
(e) (A) adjust, split, subdivide, combine or reclassify any shares of capital stock of stock, or other equity interest issue or convertible security in the Company authorize or any of its Subsidiaries or other rights of any kind to acquire, any shares of capital stock of or any other equity interest in the Company or any of its Subsidiaries, other than (x) propose the issuance of any other Company Securities in respect of, in lieu of or in substitution for, shares of its capital stock or other equity interests pursuant to or voting interest; (B) declare, set aside or pay any Employee Plan or (y) the issuance of capital stock dividend or other equity interests from any wholly owned Subsidiary to the Company distribution (whether in cash, shares or property or any other wholly owned Subsidiary combination thereof) in respect of the Company, (ii) amend or modify any term or provision of any of the Company’s outstanding equity securities or (iii) accelerate or waive any restrictions pertaining to the vesting of any Company equity-based awards or warrants or other rights of any kind to acquire any shares of capital stock or other equity interests or voting interest, or make any other actual, constructive or deemed distribution in the Company;
(e) propose or commit to reclassify, combine, split or subdivide any capital stock respect of the Company or issue or authorize the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of capital stock or other equity or voting interest, except for cash dividends made by any direct or indirect wholly owned Subsidiary of the Company to the Company or any one of its other wholly owned Subsidiaries, except for, with respect to ; (C) pledge or encumber any Subsidiary shares of its capital stock or other equity or voting interest; or (D) modify the Company, terms of any intercompany restructuring, recapitalization shares of its capital stock or similar transaction that will not have a Company Material Adverse Effectother equity or voting interest;
(f) enter into(A) incur, amend assume, suffer or terminate any Contract with Starboard Value LP or any of its Affiliates;
(g) except as required under applicable Law or modify the terms of any Employee Plan existing as of the date of this AgreementIndebtedness (including any long-term or short-term debt) or issue any debt securities, except (i1) increase the compensation or benefits payable to any current or former director or executive officer of the Company or any employee of the Company whose annual base salary is at least $300,000 (in each case, other than annual merit increases for trade payables incurred in the ordinary course of business; and (2) for loans or advances to direct or indirect wholly owned Subsidiaries of the Company; (iiB) enter into any newassume, or amend any existing, employment, severance, change in control, retention, bonus guarantee, endorse or collective bargaining agreement otherwise become liable or similar agreement responsible (whether directly, contingently or arrangement;
otherwise) for the obligations of any other Person, except with respect to obligations of direct or indirect wholly owned Subsidiaries of the Company; (iC) make any loans, advances or capital contributions to, or investments in, any other Person, except for advances to directors, officers and other than investments by employees for travel and other business-related expenses incurred in connection with such person’s role at the Company or a wholly owned Subsidiary of the Company to a wholly owned Subsidiary of the Company or the Company or advances of expenses to any director, officer, employee or agent of the Company in connection with advancement obligations in effect on the date of this Agreement, (ii) incur, assume or modify any material indebtedness or (iii) assume, guarantee, endorse, xxxxx x xxxx (other than a Permitted Lien) on any of the Company’s assets as security or otherwise become liable for indebtedness of another Person (excluding the Company or any one of its Subsidiaries)Subsidiaries in the ordinary course of business; or
(i) agree, resolve, authorize or commit to take any action prohibited by this Section 5.2.
Appears in 1 contract
Samples: Merger Agreement
Forbearance Covenants. Except (a) as expressly contemplated by this Agreement, (bi) as set forth in Section 5.1 or Section 5.2 of the Company Disclosure Letter, ; (c) as required by applicable Law, or (dii) as approved in advance in writing by the Purchaser Parent (which approval will not be unreasonably withheld, conditioned or delayed); or (iii) as expressly contemplated by the terms of this Agreement, at all times during the period from commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant to Article IX VIII and the ClosingEffective Time, the Company will not, and will not permit any of its Subsidiaries Subsidiaries, to, directly or indirectly:
(a) take amend the Charter, the Bylaws or any action set forth in Section 4.1 of the Stockholders Agreementother similar organizational document;
(b) acquire propose or agree to acquireadopt a plan of complete or partial liquidation, directly or indirectly, by purchasedissolution, merger, consolidation consolidation, restructuring, recapitalization or otherwise, equity or assets constituting all or substantially all of the business of (or any division of the business of) another Personother reorganization;
(c) issue, sell, assign, transfer, license, sublicense, abandon, permit to lapse, grant a covenant not to xxx, or otherwise dispose of any material Intellectual Property (other than non-exclusive licenses or sublicenses granted in the ordinary course of business);
(d) (i) authorize for issuance, issue, deliver, sell or transfer deliver or agree or commit to issue, deliver, sell or transfer deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities, except (A) for the issuance and sale of shares of Company Common Stock pursuant to Company Options or Company RSUs outstanding as of the Capitalization Date in accordance with their terms and pursuant to the ESPP in accordance with its terms (as modified by Section 2.8(e)); (B) in connection with agreements in effect on the date hereof; or (C) as contemplated by Section 5.2(j);
(d) directly or indirectly acquire, repurchase or redeem any securities, except for (A) repurchases of Company Securities pursuant to the terms and conditions of Company RSUs outstanding as of the date hereof in accordance with their terms as of the date hereof, or (B) transactions between the Company and any of its direct or indirect Subsidiaries;
(e) (A) adjust, split, combine or reclassify any shares of capital stock of stock, or other equity interest issue or convertible security in the Company authorize or any of its Subsidiaries or other rights of any kind to acquire, any shares of capital stock of or any other equity interest in the Company or any of its Subsidiaries, other than (x) propose the issuance of any other Company Securities in respect of, in lieu of or in substitution for, shares of its capital stock or other equity interests pursuant to or voting interest; (B) declare, set aside or pay any Employee Plan or (y) the issuance of capital stock dividend or other equity interests from any wholly owned Subsidiary to the Company distribution (whether in cash, shares or property or any other wholly owned Subsidiary combination thereof) in respect of the Company, (ii) amend or modify any term or provision of any of the Company’s outstanding equity securities or (iii) accelerate or waive any restrictions pertaining to the vesting of any Company equity-based awards or warrants or other rights of any kind to acquire any shares of capital stock or other equity interests or voting interest, or make any other actual, constructive or deemed distribution in the Company;
(e) propose or commit to reclassify, combine, split or subdivide any capital stock respect of the Company or issue or authorize the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of capital stock or other equity or voting interest, except for cash dividends made by any direct or indirect wholly owned Subsidiary of the Company to the Company or any one of its other wholly owned Subsidiaries, except for, with respect to ; (C) pledge or encumber any Subsidiary shares of its capital stock or other equity or voting interest; or (D) modify the Company, terms of any intercompany restructuring, recapitalization shares of its capital stock or similar transaction that will not have a Company Material Adverse Effectother equity or voting interest;
(f) enter into(A) incur, amend assume or terminate suffer any Contract with Starboard Value LP Indebtedness (including any long-term or short-term debt) or issue any of its Affiliates;
debt securities, except (g1) except as required under applicable Law or the terms of any Employee Plan existing as of the date of this Agreement, (i) increase the compensation or benefits payable to any current or former director or executive officer of the Company or any employee of the Company whose annual base salary is at least $300,000 (in each case, other than annual merit increases for trade payables incurred in the ordinary course of business; and (2) for loans or advances to direct or indirect wholly owned Subsidiaries of the Company; (iiB) enter into any newassume, or amend any existing, employment, severance, change in control, retention, bonus guarantee, endorse or collective bargaining agreement otherwise become liable or similar agreement responsible (whether directly, contingently or arrangementotherwise) for the obligations of any other Person, except with respect to obligations of direct or indirect wholly owned Subsidiaries of the Company;
(ig) mortgage or pledge any of its and its Subsidiaries’ assets, tangible or intangible, or create or suffer to exist any lien thereupon (other than Permitted Liens), other than in connection with financing transactions permitted by Section 5.2(f) or consented to by Parent;
(h) make any loans, advances or capital contributions to, or investments in, any other Person, except for (1) extensions of credit to customers in the ordinary course of business; (2) advances to directors, officers and other employees for travel and other business-related expenses, in each case in the ordinary course of business and in compliance in all material respects with the Company’s policies related thereto; and (3) loans, advances or capital contributions to, or investments in, direct or indirect wholly-owned Subsidiaries of the Company;
(i) acquire, lease, license, sell, abandon, transfer, assign, guarantee, or exchange any assets, tangible or intangible (including any Company Intellectual Property), in each case in excess of $250,000 individually, and other than investments by (1) the Company sale, lease or a wholly owned Subsidiary licensing of products or services of the Company to a wholly owned Subsidiary Group or other materials embodying Company Intellectual Property in the ordinary course of business; (2) the acquisition, assignment or abandonment of immaterial Company Intellectual Property in connection with the exercise of the reasonable business judgment of the Company or Group in the ordinary course of business; (3) the abandonment of trade secrets in the ordinary course of business and to the extent not economically desirable to maintain for the conduct of the business of the Company Group; and (4) any capital expenditures permitted by (or advances consented to by Parent) under Section 5.2(n);
(j) (A) enter into, adopt, amend (including accelerating the vesting, payment or funding), modify or terminate any bonus, profit sharing, compensation, severance, termination, option, appreciation right, performance unit, phantom equity, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, severance or other Employee Plan or employee benefit agreement, trust, plan, fund or other arrangement for the compensation, benefit or welfare of expenses any director, officer or employee in any manner; (B) increase the compensation of any director, officer, employee, consultant, former employee, independent contractor, or other service provider, pay any special bonus or special remuneration to any director, officer, employee, consultant, former employee, independent contractor, or other service provider, or pay any benefit not required by (or accelerate the time of payment or vesting of any payment becoming due under) any Employee Plan as in effect as of the date hereof, except in the case of each of (A) and (B), (1) as may be required by applicable law; (2) in connection with any new employee hires in the ordinary course of business and consistent with past practice and whose annual salary is less than $250,000; or agent (3) for increases in compensation for employees below the level of vice president and whose annual salary is less than $250,000 in the ordinary course of business and consistent with past practice (it being understood that these exceptions in the foregoing clauses (1), (2) and (3) will not apply to any actions otherwise prohibited by Section 5.2(c) or the following sub-clause (C); or (C) enter into any change in control, severance or similar agreement or any retention or similar agreement with any officer, employee, director, independent contractor, consultant, or other service provider;
(k) settle, release, waive or compromise any pending or threatened material Legal Proceeding or other claim, except for the settlement of any Legal Proceedings or other claim that is (A) reflected or reserved against in the Audited Company Balance Sheet; (B) for solely monetary payments of no more than $100,000 individually and $250,000 in the aggregate; or (C) settled in compliance with Section 6.15;
(l) except as required by applicable law or GAAP, (A) revalue in any material respect any of its properties or assets, including writing-off notes or accounts receivable, other than in the ordinary course of business; or (B) make any change in any of its accounting principles or practices;
(A) make or change any material Tax election; (B) settle, consent to or compromise any material Tax claim or assessment or surrender a right to a material Tax refund; (C) consent to any extension or waiver of any limitation period with respect to any material Tax claim or assessment; (D) file an amended Tax Return that could materially increase the Taxes payable by the Company or its Subsidiaries; or (E) enter into a closing agreement with any Governmental Authority regarding any material Tax;
(n) incur or commit to incur any capital expenditure(s) other than (1) consistent with the capital expenditure budget set forth in Section 5.2(n) of the Company in connection with advancement obligations in effect on the date of this Agreement, (ii) incur, assume or modify any material indebtedness Disclosure Letter or (iii2) assumeto the extent that such capital expenditures do not exceed $500,000 individually or $2,500,000 in the aggregate;
(o) enter into, guaranteemodify, endorse, xxxxx x xxxx amend or terminate any (a) Contract (other than any Material Contract) that if so entered into, modified, amended or terminated would have a Permitted Lien) on any of the Company’s assets as security Company Material Adverse Effect; or otherwise become liable for indebtedness of another Person (excluding the Company or any of its Subsidiaries); or
(i) agree, resolve, authorize or commit to take any action prohibited by this Section 5.2.
Appears in 1 contract
Samples: Merger Agreement (Xactly Corp)
Forbearance Covenants. Except (ai) as expressly contemplated or permitted by this Agreement, (bii) as set forth in Section 5.1 or Section 5.2 of the Company Disclosure Letter, Letter (c) as required by applicable Law, or (diii) as approved in advance in writing by the Purchaser Parent (which approval will not be unreasonably withheld, conditioned or delayed), or (iv) as may be required by applicable Law, the rules or regulations of any applicable securities exchange, at all times during the period from commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant to Article IX VIII and the ClosingEffective Time, the Company will not, and will shall not permit do any of its Subsidiaries tothe following (it being understood and agreed that if any action is expressly permitted by any of the following subsections, directly or indirectly:such action shall be expressly permitted under Section 5.1(a)):
(ai) take any action set forth in Section 4.1 amend its certificate of the Stockholders Agreementincorporation or bylaws or comparable organizational documents;
(bii) acquire issue, sell, deliver (whether through the issuance or agree granting of options, warrants, commitments, subscriptions, rights to acquire, directly or indirectly, by purchase, merger, consolidation purchase or otherwise, equity or assets constituting all or substantially all of the business of (or any division of the business of) another Person;
(c) sell, assign), transfer, licenseconvey, sublicense, abandon, permit to lapse, grant a covenant not to xxxdispose of, or otherwise dispose make any proposal with respect to the issuance, sale, delivery, transfer, conveyance or disposition of any material Intellectual Property Company Securities, except for (other than non-exclusive licenses or sublicenses granted in A) the ordinary course issuance and sale of business);
(d) (i) authorize for issuance, issue, deliver, sell or transfer or agree or commit to issue, deliver, sell or transfer any shares of capital stock Company Common Stock upon the exercise of Company Options outstanding as of the date of this Agreement or other equity interest or convertible security issued after the date of this Agreement in compliance with the Company or any terms of its Subsidiaries or other rights of any kind to acquirethis Section 5.1(b), any shares of capital stock of or any other equity interest in the Company or any of its Subsidiarieseach case, other than in accordance with their existing terms, and (xB) the issuance of capital stock or other equity interests shares of Company Common Stock pursuant to any Employee Plan or (y) the issuance of capital stock or other equity interests from any wholly owned Subsidiary to the Company or any other wholly owned Subsidiary of the Company, (ii) amend or modify any term or provision of any of the Company’s outstanding equity securities or (iii) accelerate or waive any restrictions pertaining to the vesting of any Company equity-based awards or warrants or other rights of any kind to acquire any shares of capital stock or other equity interests ESPP in the Company;
(e) propose or commit to reclassify, combine, split or subdivide any capital stock of the Company or issue or authorize the issuance of any other securities accordance with its terms in respect of, in lieu of, or in substitution for, shares of capital stock of the Company or any of its Subsidiaries, except for, with respect to any Subsidiary of the Company, any intercompany restructuring, recapitalization or similar transaction that will not have a Company Material Adverse Effect;
(f) enter into, amend or terminate any Contract with Starboard Value LP or any of its Affiliates;
(g) except as required under applicable Law or the terms of any Employee Plan existing effect as of the date of this Agreement, and subject to Section 2.7(e);
(iiii) increase directly or indirectly acquire, repurchase or redeem any Company Securities, except (A) upon forfeiture or repurchases of Company Securities pursuant to the compensation or benefits payable to any current or former director or executive officer terms and conditions of Company Options outstanding as of the date of this Agreement or issued after the date of this Agreement in compliance with the terms of this Section 5.1(b) and (B) in connection with the satisfaction of applicable Tax withholdings and exercise price, as applicable, due in connection with the exercise of Company Options in accordance with their terms in effect as of the date of this Agreement and consistent with past practice;
(iv) (A) split, combine, subdivide, reclassify, exchange, recapitalize or enter into any similar transaction in respect of any shares of its capital stock or (B) declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any employee combination thereof) in respect of any shares of its capital stock, or make any other actual, constructive or deemed distribution in respect of the shares of its capital stock;
(v) merge or consolidate the Company whose annual base salary is at least with any Person or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company;
(vi) (A) incur or assume any long-term or short-term debt for borrowed monies or issue any debt securities in excess of $300,000 250,000 in the aggregate, provided that any debt so incurred must be voluntarily repayable without material premium, penalties or any other material costs, except for debt incurred in the ordinary course of business under letters of credit, lines of credit or other credit facilities or arrangements in effect on the date of this Agreement; (B) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person in each caseexcess of $250,000 in the aggregate; (C) mortgage or pledge any of its assets, tangible or intangible, or create any Lien thereupon in excess of $250,000 in the aggregate (other than annual merit increases Permitted Liens); (D) repay, redeem or repurchase any long-term or short-term debt unless in the ordinary course of business) ; or (iiE) cancel any material debt or claim owed to the Company;
(vii) except as may be required by applicable Law, prescribed under the terms of this Agreement, or required by the terms of any Employee Plan as in effect on the date of this Agreement and set forth in Section 3.16(a) of the Company Disclosure Letter, (A) enter into, adopt, amend (including acceleration of vesting or increase in payments or benefits), modify or terminate any Employee Plan or other bonus, profit sharing, incentive, compensation, severance, retention, termination, option, appreciation right, performance unit, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, severance or other employee benefit agreement, trust, plan, fund or other arrangement for the compensation, benefit or welfare of any member of the Company Board or officer, or any consultant or employee in any manner, or grant any award thereunder, (B) increase the compensation payable or to become payable of any member of the Company Board, officer, consultant or employee, pay or agree to pay any bonus or special remuneration to any member of the Company Board, any officer, consultant or employee, or pay or agree to pay any material benefit to any member of the Company Board, any officer, consultant or employee, or (C) hire or promote any employee, or (D) terminate any employee other than for cause;
(viii) waive, release, assign or settle any pending or threatened Legal Proceeding, except for the settlement of for any Legal Proceeding that (A) is reflected or reserved against in the Company Balance Sheet or (B) does not include any obligation to be performed by, without any admission of liability or other adverse consequences or restrictions on (other than the payment of money not in excess of $500,000 individually or $1,500,000 in the aggregate) the Company, Parent, Acquisition Sub or the Surviving Corporation following the Effective Time;
(ix) except as may be required as a result of a change in applicable Law or in GAAP, make any material change in any of the accounting principles or practices used by it;
(A) make or change any material Tax election (which shall include, for the avoidance of doubt, any entity classification election with respect to the Company in accordance with the Treasury Regulations under Section 7701 of the Code and any election with respect to the Company pursuant to Section 965 of the Code), change any annual Tax accounting period or adopt or change any material Tax accounting method, (B) settle or compromise any claim, notice, audit or assessment in respect of Taxes or otherwise correspond with any Taxing Authority, (C) consent to any extension or waiver of any limitation period with respect to any claim or assessment for Taxes, (D) file any material Tax Return other than in accordance with Section 6.18, amend any income or other material Tax Return or file any material claim for Tax refunds, (E) enter into any new, or amend any existing, employment, severance, change in control, retention, bonus guarantee, or collective bargaining closing agreement or similar advance pricing agreement, (F) enter into any Tax allocation agreement, Tax sharing agreement or arrangementTax indemnity agreement excluding Tax indemnification provisions in commercial Contracts, the principal purpose of which is not to address Tax matters or (G) consent to any extension or waiver of the statute of limitations period applicable to any Tax claim or assessment or surrender any right to claim a material Tax refund or credit;
(ixi) (A) acquire (by merger, consolidation or acquisition of stock or assets, recapitalization, joint venture or otherwise) any business, assets or securities of any other Person (except for purchase or sales of inventory or clinical trial drug supplies made in the ordinary course of business consistent with past practice), (B) directly or indirectly sell, lease, license, abandon, or otherwise dispose (collectively, “Disposals”) in whole or in part any properties or assets of the Company, (other than any Disposal of obsolete assets or properties in the ordinary course of business), or (C) make any loans, advances or capital contributions to, or investments in, any other Person;
(xii) make any Disposal of Company Intellectual Property, other than investments the sale, licensing or abandonment of Company Intellectual Property in the ordinary course of business;
(xiii) incur any capital expenditure in respect thereof in excess of $150,000 individually or $500,000 in the aggregate, except for those contemplated by the Company or a wholly owned Subsidiary of the Company that certain capital expenditure budget which has been made available to a wholly owned Subsidiary of the Company or the Company or advances of expenses Parent prior to any director, officer, employee or agent of the Company in connection with advancement obligations in effect on the date of this Agreement;
(xiv) form or commence the operations of any business or any corporation, (ii) incurpartnership, assume limited liability company, business association or modify any material indebtedness or (iii) assume, guarantee, endorse, xxxxx x xxxx (other than a Permitted Lien) on any of the Company’s assets as security or otherwise become liable for indebtedness of another Person (excluding business organization that is not wholly owned by the Company or enter into any new line of its Subsidiaries)business;
(xv) (A) enter into any Contract that contains a change of control or similar provision that would require a payment to the other party or parties thereto in connection with the Merger or the other transactions contemplated by this Agreement, (B) enter into a Contract that would have been a Material Contract, if it were in effect as of the date hereof, amend any Material Contract in any material respect, terminate any such Material Contract or grant any release or relinquishment of any material rights under any such Material Contract, or (C) enter into, modify, supplement or amend any Lease;
(xvi) enter into any Contract or transaction between the Company, on the one hand, and any Affiliate of the Company on the other hand, other than in the ordinary course of business on terms no less favorable to the Company than the terms governing such transactions with third parties;
(xvii) fail to duly and timely file all material reports and other material documents required to be filed with the NYSE American, the SEC or any other Governmental Authority, subject to extensions permitted by Law or applicable rules and regulations;
(xviii) amend or modify the compensation terms or any other obligations of the Company contained in the engagement letter with the Company Financial Advisor in a manner adverse to the Company or Parent or engage other financial advisers in connection with the transactions contemplated by this Agreement; or
(ixix) agreeenter into a Contract, or otherwise resolve, authorize commit or commit agree to take any action of the actions prohibited by this Section 5.25.1(b).
Appears in 1 contract
Forbearance Covenants. Except (a) as expressly contemplated by this Agreement, (bx) as set forth in Section 5.1 or Section 5.2 of the Company Disclosure Letter, ; (c) as required by applicable Law, or (dy) as approved in advance in writing by the Purchaser Parent (which approval will not be unreasonably withheld, conditioned or delayed); or (z) as expressly contemplated by the terms of this Agreement, at all times during the period from commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant to Article IX VIII and the ClosingEffective Time, the Company will not, and will not permit any of its Subsidiaries Subsidiaries, to, directly or indirectly:
(a) take amend the Charter, the Bylaws or any action set forth in Section 4.1 of the Stockholders Agreementother similar organizational document;
(b) acquire propose or agree to acquireadopt a plan of complete or partial liquidation, directly or indirectly, by purchasedissolution, merger, consolidation consolidation, restructuring, recapitalization or otherwise, equity or assets constituting all or substantially all of the business of (or any division of the business of) another Personother reorganization;
(c) issue, sell, assign, transfer, license, sublicense, abandon, permit to lapse, grant a covenant not to xxx, or otherwise dispose of any material Intellectual Property (other than non-exclusive licenses or sublicenses granted in the ordinary course of business);
(d) (i) authorize for issuance, issue, deliver, sell or transfer deliver or agree or commit to issue, deliver, sell or transfer deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities, except (i) for the issuance and sale of shares of capital stock Company Common Stock pursuant to Company Options or Company Restricted Stock Units outstanding as of the Capitalization Date in accordance with their terms; or other equity interest (ii) in connection with agreements in effect on the date of this Agreement, in each case, which have been made available to Parent prior to the date hereof;
(d) directly or convertible security in the Company or any of its Subsidiaries or other rights of any kind to indirectly acquire, repurchase or redeem any shares securities of capital stock of or any other equity interest in the Company or any of its Subsidiaries;
(e) (i) adjust, other than (x) split, combine or reclassify any shares of capital stock, or issue or authorize or propose the issuance of any other Company Securities in respect of, in lieu of or in substitution for, shares of its capital stock or other equity interests pursuant to any Employee Plan or (y) the issuance of capital stock or other equity interests from any wholly owned Subsidiary to the Company or any other wholly owned Subsidiary of the Company, voting interest; (ii) amend declare, set aside or modify pay any term or provision of any of the Company’s outstanding equity securities or (iii) accelerate or waive any restrictions pertaining to the vesting of any Company equity-based awards or warrants dividend or other rights distribution (whether in cash, shares or property or any combination thereof) in respect of any kind to acquire any shares of capital stock or other equity interests or voting interest, or make any other actual, constructive or deemed distribution in respect of the shares of capital stock or other equity or voting interest, except for cash dividends made by any direct or indirect wholly owned Subsidiary of the Company to the Company or one of its other wholly owned Subsidiaries; (iii) pledge or encumber any shares of its capital stock or other equity or voting interest; or (iv) modify the terms of any shares of its capital stock or other equity or voting interest;
(f) (i) incur or assume any Indebtedness (including any long-term or short-term debt) or issue any debt securities, except (1) for trade payables incurred in the ordinary course of business and (2) for loans or advances to direct or indirect wholly owned U.S. Subsidiaries of the Company; or (ii) assume, guarantee, endorse or otherwise become liable (whether directly, contingently or otherwise) for the obligations of any other Person, except with respect to obligations of direct or indirect wholly owned U.S. Subsidiaries of the Company;
(eg) propose mortgage or commit to reclassify, combine, split or subdivide 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, shares of capital stock of the Company or pledge any of its and its Subsidiaries’ assets or property, except fortangible or intangible, with respect or create or suffer to exist any Subsidiary of the Company, lien thereupon (other than Permitted Liens or any intercompany restructuring, recapitalization or similar transaction that will not have a Company Material Adverse Effectlien consented to by Parent);
(f) enter into, amend or terminate any Contract with Starboard Value LP or any of its Affiliates;
(g) except as required under applicable Law or the terms of any Employee Plan existing as of the date of this Agreement, (i) increase the compensation or benefits payable to any current or former director or executive officer of the Company or any employee of the Company whose annual base salary is at least $300,000 (in each case, other than annual merit increases in the ordinary course of business) or (ii) enter into any new, or amend any existing, employment, severance, change in control, retention, bonus guarantee, or collective bargaining agreement or similar agreement or arrangement;
(ih) make any loans, advances or capital contributions to, or investments in, any other Person, except for (i) loans, advances or capital contributions to, or investments in, direct or indirect wholly-owned U.S. Subsidiaries of the Company, and (ii) advances to directors, officers and employees for travel and other business-related expenses, in each case, in the ordinary course of business and in an amount not to exceed $100,000 in the aggregate;
(i) acquire, lease, license, sell, abandon, transfer, assign or exchange any assets, tangible or intangible, in each case in excess of $100,000 individually and $400,000 in the aggregate, other than investments in the ordinary course of business and any capital expenditures permitted by (or consented to by Parent) under Section 5.2(n);
(j) except as required by applicable Law, take any action to (i) enter into, adopt, amend (including accelerating the Company vesting or a wholly owned Subsidiary time of payment of funding of), modify, trigger an increase in or terminate any bonus, profit sharing, compensation, severance, change in control, retention, termination, option, appreciation right, performance unit, stock equivalent, unit-based, share purchase agreement, pension, retirement, deferred compensation, employment, severance or other Employee Plan or employee benefit agreement, trust, plan, fund or other arrangement for the Company to a wholly owned Subsidiary compensation, benefit or welfare of the Company any former or the Company or advances of expenses to any current director, officer, employee or agent independent contractor in any manner; (ii) increase the compensation, benefits or other rights of any former or current director, officer, employee or independent contractor, pay any special bonus or special remuneration to any former or current director, officer, employee or independent contractor, or pay or provide any benefit or other right not required by (or accelerate the Company in connection with advancement obligations time of payment, funding or vesting of any payment, benefit or other right becoming due under) any Employee Plan (including any arrangement that would be an Employee Plan if in effect on as of the date of this Agreement), except in the case of clause (ii) incurannual review increases in the ordinary course of business for individuals with annual cash and bonus compensation of less than $100,000; (iii) enter into any change in control, assume severance or modify similar agreement or any retention or similar agreement with any former or current officer, employee, director or independent contractor; or (iv) make any change in the key management structure (including each individual with a title of vice president or above) of the Company or its Subsidiaries, including the hiring of additional officers or the termination of existing officers, or the hiring or termination of any employee or independent contractor with target annual cash compensation in excess of $100,000 (excluding terminations for cause);
(k) settle, release, waive or compromise any pending or threatened material indebtedness Legal Proceeding or other material claim, except for the settlement of any Legal Proceedings or other claim that is (i) reflected or reserved against in the Audited Company Balance Sheet; (ii) that does not exceed that which is reflected or reserved against in the Audited Company Balance Sheet or any insurance proceeds or for solely out-of-pocket monetary payments of no more than $150,000 individually and $500,000 in the aggregate without an admission of fault; or (iii) assumesettled in compliance with Section 6.15;
(l) except as required by applicable Law or GAAP, guarantee, endorse, xxxxx x xxxx (other than a Permitted Lieni) on revalue in any of the Company’s assets as security or otherwise become liable for indebtedness of another Person (excluding the Company or material respect any of its Subsidiaries)properties or assets, including writing-off notes or accounts receivable, other than in the ordinary course of business; oror (ii) make any change in any of its accounting principles or practices;
(i) agreemake or change any material Tax election; (ii) settle, resolveconsent to or compromise any material Tax claim or assessment or surrender a right to any material Tax refund, authorize offset, or other reduction in liability; (iii) consent to any extension or waiver of any limitation period with respect to any material Tax claim or assessment; (iv) file an amended income or other material Tax Return; (v) enter into a closing agreement with any Governmental Authority regarding any Tax; (vi) change any annual accounting period or adopt or change any method of accounting principles or practices (except as may be required under applicable law); (vii) incur any material Tax liability (other than in the ordinary course of business); (viii) fail to pay any material Taxes as they become due and payable; or (ix) take or omit to take any other similar action related to Taxes;
(n) incur or commit to take incur any action prohibited by this capital expenditure(s) other than (i) consistent with the capital expenditure budget set forth in Section 5.2.5.2(n) of the Company Disclosure Letter; or (ii) to the extent that such capital expenditures do not exceed $500,000 individually or $1,000,000 in the aggregate;
(o) enter into, modify, amend or terminate any (i) Contract (other than any Material Contract) that if so entered into, modified, amended or terminated would have a Company Material Adverse Effect; or (
Appears in 1 contract
Samples: Merger Agreement (Blue Nile Inc)
Forbearance Covenants. Except (ai) as expressly contemplated or permitted by this Agreement, ; (bii) as set forth in Section 5.1 or Section 5.2 of the Company Disclosure Letter, ; (ciii) as required by applicable Law, law or any binding order issued by a Governmental Authority of competent jurisdiction; or (div) as approved in advance in writing by the Purchaser Parent (which approval will not be unreasonably withheld, conditioned or delayed), at all times during the period from commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant to Article IX VIII and the ClosingEffective Time, the Company will not, and will not permit any of its Subsidiaries Subsidiaries, to, directly or indirectly:
(a) take amend the Charter, the Bylaws or any action set forth in Section 4.1 of the Stockholders Agreementother similar organizational document;
(b) acquire propose or agree to acquireadopt a plan of complete or partial liquidation, directly or indirectly, by purchasedissolution, merger, consolidation consolidation, restructuring, recapitalization or otherwise, equity or assets constituting all or substantially all of the business of (or any division of the business of) another Personother reorganization;
(c) sell, assign, transfer, license, sublicense, abandon, permit other than pursuant to lapse, grant a covenant not to xxxthe vesting, or otherwise dispose exercise of any material Intellectual Property vested, Company Stock-Based Awards that are outstanding as of the date hereof (other than non-exclusive licenses or sublicenses granted and only in accordance with their terms as of the ordinary course of businessdate hereof);
(d) (i) authorize for issuance, issue, deliversell, sell or transfer deliver or agree or commit to issue, deliver, sell or transfer deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities;
(d) directly or indirectly acquire, repurchase or redeem any securities, except for (A) repurchases of Company Securities pursuant to the terms and conditions of Company Stock-Based Awards outstanding as of the date of this Agreement in accordance with their terms as of the date of this Agreement, or (B) transactions between the Company and any of its direct or indirect Subsidiaries;
(e) (A) adjust, split, combine or reclassify any shares of capital stock of stock, or other equity interest issue or convertible security in the Company authorize or any of its Subsidiaries or other rights of any kind to acquire, any shares of capital stock of or any other equity interest in the Company or any of its Subsidiaries, other than (x) propose the issuance of any other Company Securities in respect of, in lieu of or in substitution for, shares of its capital stock or other equity interests pursuant to or voting interest; (B) declare, set aside or pay any Employee Plan or (y) the issuance of capital stock dividend or other equity interests from any wholly owned Subsidiary to the Company distribution (whether in cash, shares or property or any other wholly owned Subsidiary combination thereof) in respect of the Company, (ii) amend or modify any term or provision of any of the Company’s outstanding equity securities or (iii) accelerate or waive any restrictions pertaining to the vesting of any Company equity-based awards or warrants or other rights of any kind to acquire any shares of capital stock or other equity interests or voting interest, or make any other actual, constructive or deemed distribution in the Company;
(e) propose or commit to reclassify, combine, split or subdivide any capital stock respect of the Company or issue or authorize the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of capital stock or other equity or voting interest, except for cash dividends made by any direct or indirect wholly owned Subsidiary of the Company to the Company or any one of its other wholly owned Subsidiaries, except for, with respect to ; (C) pledge or encumber any Subsidiary shares of its capital stock or other equity or voting interest; or (D) modify the Company, terms of any intercompany restructuring, recapitalization shares of its capital stock or similar transaction that will not have a Company Material Adverse Effectother equity or voting interest;
(f) enter into(A) incur, amend assume or terminate suffer any Contract with Starboard Value LP Indebtedness for borrowed money (including any long-term or short-term debt) or issue any of its Affiliates;
debt securities, except (g1) except as required under applicable Law or the terms of any Employee Plan existing as of the date of this Agreement, (i) increase the compensation or benefits payable to any current or former director or executive officer of the Company or any employee of the Company whose annual base salary is at least $300,000 (in each case, other than annual merit increases for trade payables incurred in the ordinary course of businessbusiness by the Company Group; (2) for loans or advances to direct or indirect wholly owned Subsidiaries of the Company; (ii3) enter letters of credit, bank guarantees, security or performance bonds or similar credit support instruments, overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business by the Company Group and for less than $500,000 in the aggregate for the benefit of the Company Group; (4) Indebtedness incurred under the Credit Facility or other existing arrangements (including in respect of letters of credit) in the ordinary course of business to support ordinary course working capital needs of the Company Group or capital expenditures to the extent permitted by Section 5.2(m); provided that in no event shall any newsuch Indebtedness or arrangement, or amend any existingtogether with all amounts outstanding under the Credit Facility, employmentexceed the aggregate amount specified on Section 5.2(f) of the Company Disclosure Letter; and (5) other Indebtedness for borrowed money in an aggregate principal amount not to exceed $1,000,000; (B) assume, severance, change in control, retention, bonus guarantee, endorse or collective bargaining agreement otherwise become liable or similar agreement responsible (whether directly, contingently or arrangementotherwise) for the obligations of any other Person, except with respect to obligations of direct or indirect wholly owned Subsidiaries of the Company and except for any indemnification and advancement obligations under the Charter, Bylaws, comparable organizational document of any Subsidiary of the Company or indemnification agreements with the Company Group;
(ig) make any loans, advances or capital contributions to, or investments in, any other Person, except for (1) extensions of credit to customers in the ordinary course of business; (2) advances to directors, officers and other than investments by employees for travel and other business-related expenses, in each case in the Company or a wholly owned Subsidiary ordinary course of business and in compliance in all material respects with the Company to a wholly owned Company’s policies related thereto; (3) advancement obligations under the Charter, Bylaws, comparable organizational document of any Subsidiary of the Company or indemnification agreements with the Company Group; and (4) loans, advances or advances capital contributions to, or investments in, direct or indirect wholly owned Subsidiaries of expenses to the Company;
(h) acquire, lease, license (other than non-exclusive licenses in the ordinary course of business), sell, abandon (except in the ordinary course of business), transfer, assign, guarantee, exchange, mortgage, pledge or otherwise encumber any directorassets, officertangible or intangible, employee or agent create any lien thereupon, in each case in excess of $500,000 individually, or $1,000,000 in the aggregate in the case of acquisitions and $500,000 individually, or $1,000,000 in the aggregate in the case of dispositions, other than: (1) the sale, lease or licensing of products or services of the Company Group in the ordinary course of business; (2) the acquisition of inventory, in the ordinary course of business; (3) any capital expenditures permitted (or consented to by Parent) under Section 5.2(m); (4) in connection with advancement obligations financing transactions permitted (or consented to by Parent) under Section 5.2(f); (5) dispositions of obsolete or worthless personal property in the ordinary course of business which have no fair market value in the good faith determination of the Company; or (6) Permitted Liens;
(i) (A) enter into, adopt, amend (including accelerating the vesting, payment or funding), modify or terminate any Employee Plan or any arrangement that would be an Employee Plan if in effect on the date of this Agreement; (B) increase the compensation of any director, officer, employee, consultant, former employee, independent contractor, or other service provider, pay any special bonus or special remuneration to any director, officer, employee, consultant, former employee, independent contractor, or other service provider, or pay any material benefit not required by (or accelerate the time of payment or vesting of any payment becoming due under) any Employee Plan as in effect as of the date of this Agreement; (C) without limiting the foregoing, modify or amend (including by increasing the number of covered participants beyond the Covered Severance Plan Employees or the levels of severance payments and benefits provided under) or the CIC Severance Policy; or (D) enter into any change in control, severance or similar agreement or any retention or similar agreement with any officer, employee, director, independent contractor, consultant, or other service provider, except in the case of each of (A) and (B), (ii1) incuras may be required by applicable law or the terms of any Employee Plan in effect on the date hereof and set forth on Section 3.18(a) of the Company Disclosure Letter or this Agreement; (2) in connection with any new employee hires whose annual salary is less than $150,000 in the ordinary course of business; or (3) for increases in compensation, assume annual bonus targets and other benefits for employees below the level of vice president and whose annual salary is less than $150,000, in the ordinary course of business (it being understood that these exceptions to the foregoing clauses (1), (2) and (3) will not apply to any actions otherwise prohibited by Section 5.2(c) or modify by Section 5.2(i)(C), or Section 5.2(i)(D));
(j) settle, release, waive or compromise any pending or threatened material Legal Proceeding or other claim, except for the settlement of any Legal Proceedings or other claim that is (A) reflected or reserved against in the Audited Company Balance Sheet; (B) for solely monetary payments of no more than $200,000 individually and $500,000 in the aggregate; (C) settled in compliance with Section 5.2(l) or Section 6.15; (D) in favor of the Company Group in the ordinary course of business; or (E) for solely monetary payments for any Legal Proceeding that is covered by insurance (exclusive of any amounts payable in respect of any insurance deductible);
(k) except as required by applicable law, any Governmental Authority (including the Financial Accounting Standards Board or any similar organization) or GAAP (or any interpretation thereof), (A) revalue in any material indebtedness respect any of its properties or assets, including writing-off notes or accounts receivable, other than in the ordinary course of business; or (iiiB) assumemake any material change in any of its accounting principles or practices;
(A) make or change any material Tax election; (B) settle, guaranteeconsent to or compromise any material Tax claim or assessment or surrender a right to a material Tax refund other than settlements, endorsecompromises or surrenders not to exceed $100,000 individually and $250,000 in the aggregate; (C) file an amended Tax Return that could materially increase the Taxes payable by the Company Group; or (D) enter into a closing agreement with any Governmental Authority regarding any material Tax;
(m) incur or commit to incur any capital expenditure(s), xxxxx x xxxx other than (1) consistent with the capital expenditure budget set forth in Section 5.2(m) of the Company Disclosure Letter, (2) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged after the date hereof due to casualty or accident that are covered by insurance (exclusive of any amounts payable in respect of any insurance deductible) or (3) otherwise in an aggregate amount for all such capital expenditures made pursuant to this clause (3) not to exceed $150,000 in the aggregate in each three-month period following the date hereof;
(n) enter into, modify, amend or terminate any (a) Contract (other than any Material Contract) that if so entered into, modified, amended or terminated would have a Permitted Lien) on any of the Company’s assets as security Company Material Adverse Effect; or otherwise become liable for indebtedness of another Person (excluding the Company or any of its Subsidiaries); or
(i) agree, resolve, authorize or commit to take any action prohibited by this Section 5.2.
Appears in 1 contract
Forbearance Covenants. Except (av) as expressly contemplated by this Agreement, ; (bw) as set forth in Section 5.1 or Section 5.2 of the Company Disclosure Letter, ; (cx) as required by applicable Law, ; (y) for any actions requested by Parent taken in connection with a Carveout Transaction; or (dz) as approved in advance in writing by the Purchaser Parent (which approval will not be unreasonably withheld, conditioned or delayed, other than for the actions set forth in Section 5.2(l)(ii), which approval may be given by Parent at its sole discretion), during the period from the execution and delivery of this Agreement until the earlier to occur of the termination of this Agreement pursuant to Article IX VIII and the ClosingEffective Time, the Company will shall not, and will not permit any shall cause each of its Subsidiaries as applicable not to, directly or indirectly:
(a) take amend any action set forth in Section 4.1 Organizational Documents of the Stockholders AgreementCompany or its Subsidiaries;
(b) acquire propose or agree to acquireadopt a plan of complete or partial liquidation, directly or indirectly, by purchasedissolution, merger, consolidation consolidation, restructuring, recapitalization or otherwise, equity or assets constituting all or substantially all of the business of (or any division of the business of) another Personother reorganization;
(c) issue, sell, assign, transfer, license, sublicense, abandon, permit to lapse, grant a covenant not to xxx, or otherwise dispose of any material Intellectual Property (other than non-exclusive licenses or sublicenses granted in the ordinary course of business);
(d) (i) authorize for issuance, issue, deliver, sell or transfer deliver or agree or commit to issue, deliver, sell or transfer any shares of capital stock of or other equity interest or convertible security in the Company or any of its Subsidiaries or other rights of any kind to acquire, any shares of capital stock of or any other equity interest in the Company or any of its Subsidiaries, other than deliver (x) whether through the issuance or granting of capital stock options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities or securities or other equity interests pursuant to any Employee Plan or (y) the issuance of capital stock or other equity interests from any wholly owned Subsidiary to the Company or any other wholly owned Subsidiary of the Company, (ii) amend or modify any term or provision of any of the Company’s Subsidiaries, except (i) in connection with agreements in effect on the date of this Agreement and set forth on Section 5.2(c) of the Company Disclosure Letter or (ii) issuances of shares of Company Common Stock or other Company Securities pursuant to Company Equity Awards outstanding equity as of the date hereof;
(d) directly or indirectly acquire, repurchase or redeem any Company Securities, except for (i) repurchases of Company Securities pursuant to the terms and conditions of Company Equity Awards, or (ii) transactions between the Company and any of its direct or indirect Subsidiaries;
(e) (i) adjust, split, combine or reclassify any shares of capital stock, or issue or authorize or propose the issuance of any other Company Securities or any securities or (iii) accelerate equity interests of the Company’s Subsidiaries in respect of, in lieu of or waive any restrictions pertaining to the vesting in substitution for, shares of any Company equity-based awards or warrants its capital stock or other rights equity or voting interest; (ii) declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any kind to acquire any shares of capital stock or other equity interests or voting interest, or make any other actual, constructive or deemed distribution in the Company;
(e) propose or commit to reclassify, combine, split or subdivide any capital stock respect of the Company or issue or authorize the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of capital stock or other equity or voting interest, except for cash dividends made by any direct or indirect wholly-owned Subsidiary of the Company to the Company or any one of its other wholly-owned Subsidiaries, except for, with respect to ; or (iii) pledge or encumber any Subsidiary shares of the Company, any intercompany restructuring, recapitalization its capital stock or similar transaction that will not have a Company Material Adverse Effectother equity or voting interest;
(f) enter into, amend or terminate any Contract with Starboard Value LP or any of its Affiliates;
(g) except as required under applicable Law or the terms of any Employee Plan existing as of the date of this Agreement, (i) increase the compensation incur, assume or benefits payable to suffer any current Indebtedness or former director or executive officer of the Company or issue any employee of the Company whose annual base salary is at least $300,000 debt securities, except (in each case, other than annual merit increases a) for trade payables incurred in the ordinary course of business; (b) for loans or advances to Subsidiaries of the Company; and (c) pursuant to the Credit Agreement (including the Revolver thereunder); (ii) enter into any newassume, or amend any existing, employment, severance, change in control, retention, bonus guarantee, endorse or collective bargaining agreement otherwise become liable or similar agreement responsible (whether directly, contingently or arrangement;
otherwise) for the obligations of any other Person, except with respect to obligations of direct or indirect wholly-owned Subsidiaries of the Company; (iiii) make any loans, advances or capital contributions to, or investments in, any other Person, except for advances to directors, officers and other employees, or extensions of credit to, or receivables payable from, customers, in each case, in the ordinary course of business and transactions permitted by clause (k) below; or (iv) mortgage or pledge any assets, tangible or intangible, or create or suffer to exist any lien thereupon (other than investments by Permitted Liens);
(g) (i) enter into, adopt, amend, terminate or modify in any material respect any Employee Plan or accelerate compensation benefits provided under any Employee Plan (in each case, except for in connection with annual renewals in the Company ordinary course of business); or a wholly owned Subsidiary (ii) increase the compensation of the Company to a wholly owned Subsidiary of the Company any director or the Company officer, pay any special bonus or advances of expenses special remuneration to any director, officerofficer or employee, employee or agent pay any benefit not permitted in accordance with the terms of the Company in connection with advancement obligations any Employee Plan as in effect on as of the date of this Agreement, except in the case of each of (i) and (ii), (a) as may be required by applicable Law; (b) in connection with any employee hires in the ordinary course of business and consistent with past practice; or (c) for increases in compensation and/or benefits for non-officer employees (based on promotion or merit) made in the ordinary course of business and consistent with past practice;
(h) settle any pending or threatened Legal Proceeding, except for the settlement of any Legal Proceeding: (i) that is reflected or reserved against in the Audited Company Balance Sheet for solely monetary payments up to the amounts reserved against; (ii) incurfor solely monetary payments of no more than $250,000 individually and $500,000 in the aggregate (in excess of amounts funded by an indemnity obligation to, assume or modify an insurance policy of, the Company or any material indebtedness or of its Subsidiaries and excluding ordinary course administrative expenses that may be incurred in connection therewith), in each case, in addition to any applicable amount set forth in clause (i) if applicable; (iii) assume, guarantee, endorse, xxxxx x xxxx (other than a Permitted Lien) on any for the settlement of the Company’s assets as security or otherwise become liable for indebtedness claims of another Person (excluding the Company or any of its Subsidiaries, that results in no monetary obligation of the Company or any of its Subsidiaries, the receipt by the Company or any of its Subsidiaries of a payment, or does not involve any injunctive or equitable relief or impose restrictions on the business activities of or result in any reputational harm to the Company or any of its Subsidiaries; or (iv) settled in compliance with Section 6.14;
(i) except as required by applicable Law or GAAP, (i) revalue any of its properties or material assets, including writing-off notes or accounts receivable, other than in the ordinary course of business; or (ii) make any change in any of its accounting principles or practices;
(i) except in the ordinary course of business, make, change or revoke any material Tax election; (ii) make any material change to any method of Tax accounting; (iii) settle or compromise any material Tax claim or assessment; (iv) surrender a right to a material refund of Taxes; (v) consent to any extension or waiver of any limitation period with respect to any Tax claim or assessment; or (vi) enter into any “closing agreement” within the meaning of Section 7121 of the Code (or any similar provision of state, local or non-United States Law) in respect of a material amount of Taxes;
(k) incur or commit to incur any capital expenditures other than (i) in accordance with the capital expenditure budget set forth in Section 5.2(k) of the Company Disclosure Letter, (ii) pursuant to obligations imposed by Material Contracts; (iii) as permitted by Section 5.2(p) or (iv) with respect to any capital expenditure not addressed by the foregoing clauses (i) through (iii), not to exceed $100,000 individually, or $1,000,000, in the aggregate;
(l) (i) fail to renew, modify in any material respect, amend in any material respect or terminate any Material Contract except in the ordinary course of business, (ii) enter into any Lease or Sublease for which annual base rent exceeds $100,000 or (iii) enter into any other Contract that if entered into from and after the date hereof would be a Material Contract;
(m) maintain insurance at less than current levels or otherwise in a manner inconsistent with past practice;
(n) engage in any transaction with, or enter into any Contract, agreement, arrangement or understanding with, any Affiliate of the Company or other Person covered by Item 404 of Regulation S-K promulgated by the SEC that would be required to be disclosed pursuant to Item 404;
(o) effectuate a “plant closing” or “mass layoff” (as defined in WARN) affecting in whole or in part any site of employment, facility, operating unit or employee without complying with WARN;
(p) make any acquisition or disposition of a material asset or business (including by merger, consolidation or acquisition of stock or assets or acquisition or closure of any restaurant location) or lease, license, pledge or transfer to or from another Person a material asset or business, except for (i) any acquisition or disposition for consideration that is not in excess of $750,000, individually, and $1,500,000, in the aggregate; (ii) any acquisition in connection with a new restaurant location build out disclosed on Section 5.2 of the Disclosure Letter, in the ordinary course of business; (iii) any disposition of obsolete or worn out equipment or Intellectual Property that is not (or no longer) material to the business of the Company and its Subsidiaries, or (iv) non-exclusive licenses or other dispositions (including abandonment, let lapse and transfer) of Intellectual Property, in the ordinary course of business;
(q) recognize any union or other labor organization as the representative of any of the employees of the Company or any of its Subsidiaries, or enter into any new or amended Collective Bargaining Agreement;
(r) enter into any new line of business outside of the Company’s and its Subsidiaries’ existing business on the date of this Agreement; or
(is) agree, resolve, authorize or commit enter into a Contract to take any action of the actions prohibited by this Section 5.2.
Appears in 1 contract
Samples: Merger Agreement (Del Frisco's Restaurant Group, Inc.)
Forbearance Covenants. Except (a) as expressly contemplated by this Agreement, (bA) as set forth in Section 5.1 or Section 5.2 of the Company Disclosure Letter; (B) for any actions taken reasonably and in good faith to respond to any COVID-19 Measures (it being understood that prior to taking any material actions in reliance on this clause (B), the Company will use its reasonable best efforts to provide reasonable advance notice to, and consult, with Parent (cif reasonably practicable and legally permissible) prior to taking such actions); (C) as required by applicable Law, or ; (dD) as approved in advance in writing by the Purchaser Parent (which approval will not be unreasonably withheld, conditioned or delayed); or (E) as expressly contemplated by the terms of this Agreement, during the period from the execution and delivery of this Agreement until the earlier to occur of the termination of this Agreement pursuant to Article IX and the ClosingPre-Closing Period, the Company will not, and will not permit any of its Subsidiaries Subsidiaries, to, directly or indirectly:
(a) take amend or otherwise change the Charter, the Bylaws or any action set forth in Section 4.1 other similar organizational document of the Stockholders AgreementCompany or any of its Subsidiaries;
(b) acquire propose or agree to acquireadopt a plan of complete or partial liquidation, directly or indirectly, by purchasedissolution, merger, consolidation consolidation, restructuring, recapitalization or otherwise, equity or assets constituting all or substantially all of the business of (or any division of the business of) another Personother reorganization;
(c) issue, sell, assign, transfer, license, sublicense, abandon, permit to lapse, grant a covenant not to xxx, or otherwise dispose of any material Intellectual Property (other than non-exclusive licenses or sublicenses granted in the ordinary course of business);
(d) (i) authorize for issuance, issue, deliver, sell or transfer or agree or commit to issue, sell or deliver, sell any Company Securities (whether through the issuance or transfer granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), except (i) for the issuance, delivery or sale of shares of Company Common Stock pursuant to Company Equity-Based Awards, Company Options or Convertible Notes outstanding as of the Capitalization Date or pursuant to the ESPP in accordance with their terms and the terms of this Agreement (including as limited by Section 2.8(e)); (ii) in connection with agreements in effect on the date of this Agreement set forth on Section 5.2(c) of the Company Disclosure Letter; or (iii) as contemplated by Section 5.2(i);
(d) directly or indirectly acquire, repurchase or redeem any securities, except for (i) with respect to Company Securities pursuant to the terms and conditions of Company Equity-Based Awards, the Capped Call Transactions or Company Options outstanding as of the date of this Agreement in accordance with their terms as in effect as of the date of this Agreement or to otherwise satisfy Tax obligations with respect to awards granted pursuant to Company Equity Plans or pay the exercise price of Company Options, in each case in accordance with the terms of the Company Equity Plans as in effect on the date of this Agreement; or (ii) transactions between the Company and any of its direct or indirect Subsidiaries;
(e) acquire (by merger, consolidation or acquisition of stock or assets) any other Person or any material equity interest therein or enter into any joint venture, partnership, limited liability corporation or similar arrangement with any third Person;
(f) acquire, or agree to acquire, fee ownership (or its jurisdictional equivalent) of any real property;
(g) (i) adjust, split, subdivide, combine or reclassify any shares of capital stock of stock, or other equity interest issue or convertible security in the Company authorize or any of its Subsidiaries or other rights of any kind to acquire, any shares of capital stock of or any other equity interest in the Company or any of its Subsidiaries, other than (x) propose the issuance of any other Company Securities in respect of, in lieu of or in substitution for, shares of its capital stock or other equity interests pursuant to any Employee Plan or (y) the issuance of capital stock or other equity interests from any wholly owned Subsidiary to the Company or any other wholly owned Subsidiary of the Company, voting interest; (ii) amend declare, set aside, establish a record date for, authorize or modify pay any term or provision of any of the Company’s outstanding equity securities or (iii) accelerate or waive any restrictions pertaining to the vesting of any Company equity-based awards or warrants dividend or other rights distribution (whether in cash, shares or property or any combination thereof) in respect of any kind to acquire any shares of capital stock or other equity interests or voting interest, or make any other actual, constructive or deemed distribution in respect of the Companyshares of capital stock or other equity or voting interest, except for cash dividends made by any direct or indirect wholly owned Subsidiary of the Company to the Company or one of its other wholly owned Subsidiaries; (iii) pledge or encumber any shares of its capital stock or other equity or voting interest; or (iv) modify the terms of any shares of its capital stock or other equity or voting interest;
(eh) propose (i) incur, assume, suffer or commit to reclassifymodify the terms of any Indebtedness or issue any debt securities, combine, split except (A) for loans or subdivide any capital stock advances between Subsidiaries of the Company or issue between the Company and Subsidiaries; and (B) pursuant to the Credit Agreement that will be repaid and terminated in full at the Closing or authorize the issuance Convertible Notes; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other securities in respect of, in lieu of, or in substitution for, shares of capital stock of the Company or any of its SubsidiariesPerson, except for, with respect to any Subsidiary obligations of wholly owned Subsidiaries of the Company, any intercompany restructuring, recapitalization or similar transaction that will not have a Company Material Adverse Effect;
; (f) enter into, amend or terminate any Contract with Starboard Value LP or any of its Affiliates;
(g) except as required under applicable Law or the terms of any Employee Plan existing as of the date of this Agreement, (i) increase the compensation or benefits payable to any current or former director or executive officer of the Company or any employee of the Company whose annual base salary is at least $300,000 (in each case, other than annual merit increases in the ordinary course of business) or (ii) enter into any new, or amend any existing, employment, severance, change in control, retention, bonus guarantee, or collective bargaining agreement or similar agreement or arrangement;
(iiii) make any loans, advances or capital contributions to, or investments in, any other Person, except for (A) extensions of credit to customers; (B) advances to directors, officers and other than investments by employees, in each case in the Company ordinary course of business and in compliance in all material respects with the Company’s policies related thereto; and (C) for loans or a wholly owned Subsidiary of the Company to a wholly owned Subsidiary advances between Subsidiaries of the Company or between the Company or advances of expenses to any director, officer, employee or agent and its Subsidiaries and capital contributions in wholly owned Subsidiaries of the Company; or (iv) mortgage, pledge or otherwise encumber any assets, tangible or intangible, or create or suffer to exist any lien thereon (other than Permitted Liens);
(i) except (i) in order to comply with applicable Law, (ii) as required pursuant to the existing terms of any Company in connection with advancement obligations Benefit Plan in effect on the date of this AgreementAgreement and made available to Parent, (iii) as provided in this Agreement or (iv) pursuant to the proposed budget set forth in Section 5.2(i) of the Company Disclosure Letter, (A) establish, adopt, enter into, terminate or amend, or take any action to accelerate the vesting, payment or funding of any compensation, or benefits under, any material Company Benefit Plan, except as appropriate to implement hires not prohibited under clauses (D) and (E) of this subsection; (B) grant to any Service Provider whose total annual base compensation exceeds $300,000 any increase in cash- or equity-based compensation, bonus, incentive or fringe or other benefits (or, in the case of any such person whose annual base cash compensation does not exceed such amount, grant any such increase unless done in the ordinary course of business and consistent with past practice); (C) grant to any Service Provider, any new or increased change in control, retention, deal or stay bonus, severance or termination pay, or materially amend or modify any such arrangement; (D) enter into, terminate or materially amend or modify any employment agreement, offer letter, consulting agreement or arrangement, or change in control, retention, deal or stay bonus, severance or termination agreement with any Service Providers (other than entering into offer letters or consulting agreements with newly-hired non-officer employees or consultants with total annual base compensation equal to or less than $300,000 in the ordinary course of business and consistent with past practice); or (E) terminate any employee of the Company or any of its Subsidiaries with total annual base compensation in excess of $300,000, other than terminations for cause; it being understood that for purposes of this Section 5.2(i), any reference to “total annual compensation” shall not take into account any temporary reductions to total annual compensation due to COVID-19;
(j) settle, release, waive or compromise any pending or threatened Legal Proceeding, except for the settlement of any Legal Proceedings (i) solely for monetary damages in an amount (1) not in excess of $350,000 or (2) that does not exceed the amount reflected or reserved against in the Audited Company Balance Sheet; or (ii) incursettled in compliance with Section 6.15;
(k) except as required by applicable Law or GAAP, assume or modify (i) other than in the ordinary course of business, revalue in any material indebtedness respect any of its properties or assets, including writing-off notes or accounts receivable; or (ii) make any change in any of its accounting principles or practices;
(i) make or change any material Tax election; (ii) settle or compromise any material Tax claim or assessment; or (iii) assumeconsent to any extension or waiver of any limitation period with respect to any material Tax claim or assessment.
(m) (i) incur, guaranteeauthorize or commit to incur any material capital expenditures other than (A) consistent in all material respects with the capital expenditure budget set forth in Section 5.2(m) of the Company Disclosure Letter; (B) pursuant to obligations imposed by Material Contracts or Leases; or (C) pursuant to agreements in effect prior to the date of this Agreement; (ii) enter into, endorsemodify, xxxxx x xxxx amend, extend, fail to perform the terms of or terminate any Contract that if so entered into, modified, amended, extended, failed to be performed or terminated would have a Company Material Adverse Effect; (iii) maintain insurance at less than current levels or otherwise in a manner inconsistent with past practice; (iv) engage in any transaction with, or enter into any agreement, arrangement or understanding with, any Affiliate of the Company or other Person covered by Item 404 of Regulation S K promulgated by the SEC that would be required to be disclosed pursuant to Item 404; (v) effectuate a “plant closing,” “mass layoff” (each as defined in the WARN Act) or other employee layoff event affecting in whole or in part any site of employment, facility, operating unit or employee; (vi) grant any material refunds, credits, rebates or other allowances to any end user, customer, reseller or distributor, in each case other than in the ordinary course of business; or (vii) waive, release, grant, encumber or transfer any right of material value to the Company and its Subsidiaries, taken as a whole, other than in the ordinary course of business;
(n) enter into any Material Contract that is outside the ordinary course of business;
(o) modify, amend, terminate or assign, or waive or assign any rights under any Material Contract in any material manner, except in the ordinary course of business or pursuant to the Company’s reasonable business judgment;
(p) negotiate, modify, extend, terminate or enter into any Labor Agreement, or recognize or certify any labor union, works council or other labor organization as the bargaining representative for any employees of the Company or its Subsidiaries;
(q) waive or release any noncompetition, nonsolicitation, nondisclosure, noninterference, nondisparagement, or other restrictive covenant obligation of any Service Provider;
(r) sell, assign, transfer, lease, license (other than a Permitted Lien), abandon, let lapse, cancel, dispose of, or otherwise subject to any Lien (other than Permitted Liens) on any material Company Intellectual Property, except for non-exclusive licenses of Intellectual Property entered in the ordinary course of business;
(s) disclose or abandon any material Trade Secrets except in the ordinary course of business and to the extent not economically desirable to maintain for the conduct of the Company’s assets as security business of the Company and its Subsidiaries, or otherwise become liable disclose, license, make available, or deliver any source code for indebtedness any Company Software to any Person except to a third-party service provider or other agent obligated in writing to (i) maintain the confidentiality of, and not disclose, such source code; and (ii) use such source code only in the provision of another Person (excluding services to the Company or any of its Subsidiaries);
(t) make any material change to the Company’s or any of its Subsidiaries’ policies or procedures with respect to their Processing of Personal Information, except as required by applicable Law; or
(iu) agree, resolve, authorize enter into or agree or commit to enter into a Contract to take any action of the actions prohibited by this Section 5.2.
Appears in 1 contract
Samples: Merger Agreement (Medallia, Inc.)
Forbearance Covenants. Except (aw) as expressly contemplated or permitted by this Agreement, (bx) as set forth in Section 5.1 or Section 5.2 4.2 of the Company Disclosure LetterSchedule, (c) as required by applicable Law, or (dy) as approved in advance by Parent in writing by the Purchaser (which approval will not be unreasonably withheld, conditioned delayed or delayedconditioned), or (z) as required by law, at all times during the period from commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant to Article IX VII and the ClosingEffective Time, the Company will not, shall not do any of the following and will shall not permit any of its Subsidiaries toto do any of the following (it being understood and hereby agreed that if any action is expressly permitted by any of the following subsections, directly or indirectly:such action shall be expressly permitted under Section 4.1 also):
(a) take any action set forth in Section 4.1 amend its Certificate of the Stockholders AgreementIncorporation or bylaws or comparable organizational documents;
(b) acquire propose or agree to acquireadopt a plan of complete or partial liquidation, directly or indirectly, by purchasedissolution, merger, consolidation or otherwiseconsolidation, equity or assets constituting all or substantially all of the business of (or any division of the business of) another Person;
(c) sellrestructuring, assign, transfer, license, sublicense, abandon, permit to lapse, grant a covenant not to xxx, or otherwise dispose of any material Intellectual Property (other than non-exclusive licenses or sublicenses granted in the ordinary course of business);
(d) (i) authorize for issuance, issue, deliver, sell or transfer or agree or commit to issue, deliver, sell or transfer any shares of capital stock of recapitalization or other equity interest or convertible security in the Company or any reorganization of its Subsidiaries or other rights of any kind to acquire, any shares of capital stock of or any other equity interest in the Company or any of its Subsidiaries;
(c) issue, other than sell, deliver or agree or authorize, propose or commit to issue, sell or deliver (xwhether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities or any Subsidiary Securities, except for the issuance of capital stock or other equity interests shares of Company Common Stock pursuant to any Employee Plan or (y) the issuance of capital stock or other equity interests from any wholly owned Subsidiary to the Company or any other wholly owned Subsidiary of the Company, (ii) amend or modify any term or provision of any of the Company’s outstanding equity securities or (iii) accelerate or waive any restrictions pertaining to the vesting and terms of Company RSU Awards outstanding prior to the date hereof and the issuance and sale of shares of Company Common Stock pursuant to the exercise of Company Options outstanding prior to the date hereof;
(d) directly or indirectly acquire, repurchase or redeem any Company equity-based awards Securities or warrants or Subsidiary Securities (other rights than the withholding of any kind to acquire any shares of capital stock or other equity interests Company Common Stock in connection with the Companyvesting of Company RSU Awards outstanding as of the date of this Agreement);
(e) propose (i) adjust, split, combine or commit to reclassifyreclassify any shares of capital stock, combine, split or subdivide any capital stock of the Company or issue or authorize or propose the issuance of any other securities in respect of, in lieu of, of or in substitution for, shares of its capital stock, (ii) declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any shares of capital stock, or make any other actual, constructive or deemed distribution in respect of the shares of capital stock, except for cash dividends made by any direct or indirect wholly-owned Subsidiary of the Company to the Company or one of its Subsidiaries, (iii) pledge or encumber any shares of its capital stock or any of its other securities, or (iv) modify the terms of any shares of its capital stock or any of its other securities;
(f) (i) incur, create, assume or otherwise become liable for Indebtedness, (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except with respect to obligations of direct or indirect wholly owned Subsidiaries of the Company, (iii) make any loans, advances or capital contributions to or investments in any other Person, except for expense and travel advances in the ordinary course of business consistent with past practice to employees of the Company or any of its Subsidiaries, except foror (iv) sell, with respect to any Subsidiary of the Companylicense, any intercompany restructuringmortgage, recapitalization lease, transfer, encumber or similar transaction that will not have a Company Material Adverse Effect;
(f) enter into, amend or terminate any Contract with Starboard Value LP or pledge any of its Affiliatesor its Subsidiaries’ assets, tangible or intangible, or create or suffer to exist any Lien thereupon (other than Permitted Liens);
(g) (i) enter into, adopt, create, amend (including acceleration of vesting), modify or terminate any bonus, profit sharing, compensation, severance, termination, option, appreciation right, performance unit, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, severance or other employee benefit agreement, trust, plan, fund or other arrangement for the compensation, benefit or welfare of any director, officer or employee in any manner, except in any such case (A) as may be required under by applicable Law law or (B) solely with respect to any employee that is not an executive officer of the Company, in the ordinary course of business consistent with past practice that, in the aggregate, do not result in a material increase in benefits or compensation expense to the Company (provided, that the Company may take such actions in respect of a new executive officer hired to fill a vacancy arising after the date hereof, except that, without the prior written consent of Parent, (x) no such new hire shall (x) be granted any severance or similar rights upon a termination of employment, (y) have any right to continued employment after the Effective Time or (z) be granted any option, appreciation right, restricted stock, performance unit, stock equivalent or similar equity interest if such grant would increase the aggregate consideration payable at the Effective Time by Parent or the terms Surviving Corporation hereunder), (ii) increase the compensation of any Employee Plan existing director, officer or employee, pay any special bonus or special remuneration to any director, officer or employee, or pay any benefit not required by any plan or arrangement as in effect as of the date of this Agreementhereof, except in any such case (iA) increase the compensation as may be required by applicable law or benefits payable (B) solely with respect to any current or former director or employee that is not a senior executive officer of the Company, in the ordinary course of business consistent with past practice that, in the aggregate, do not result in a material increase in benefits or compensation expense to the Company or (iii) incur any employee Change of Control Obligation;
(h) (i) incur or commit to incur any capital expenditures, or any obligations or liabilities in connection therewith that individually or in the aggregate, are in excess of $250,000, except (A) as otherwise included in the Company's capital expenditure budget furnished to Parent prior to the date hereof, (B) incurred in the ordinary course of business consistent with past practice and (C) in respect of the repair or replacement of the current assets or properties of the Company whose annual base salary is at least $300,000 or its Subsidiaries (in each caseconsistent with past practices of the Company and its Subsidiaries), (ii) pay, discharge, settle or satisfy any liabilities, other than annual merit increases the payment, discharge or satisfaction of liabilities in the ordinary course of business) , consistent with past practice, as required by any applicable law, as accrued for in the Audited Company Balance Sheet or (ii) enter into any new, or amend any existing, employment, severance, change in control, retention, bonus guarantee, or collective bargaining agreement or similar agreement or arrangement;
(i) make any loans, advances or capital contributions to, or investments in, any other Person, other than investments as required by the Company or a wholly owned Subsidiary terms of the Company to a wholly owned Subsidiary any Contract of the Company or the Company or advances of expenses to any directorits Subsidiaries, officer, employee or agent of the Company in connection with advancement obligations as in effect on the date of this Agreement or entered into in compliance with the terms of this Agreement, (iii) enter into, modify, amend or terminate (A) any Contract which if so entered into, modified, amended or terminated could be reasonably likely to have a Company Material Adverse Effect or (B) except in the ordinary course of business, any Material Contract, or (iv) engage in any transaction with, or enter into any agreement, arrangement or understanding with any Affiliate of the Company or other Person covered by Item 404 of Regulation S-K promulgated under the Exchange Act that would be required to be disclosed under such Item 404 other than those in existence on the date of this Agreement;
(i) compromise, release, waive or settle any pending or threatened material Legal Proceeding (i) having a value or in an amount not covered by insurance in excess of $250,000 or (ii) relating to or affecting the Company’s material Intellectual Property;
(j) except as may be required by applicable law or GAAP, revalue any of its material assets or make any change in any of the accounting methods, principles or practices used by it;
(i) change its material Tax accounting methods, principles or practices, except as required by GAAP or applicable law, (ii) incur, assume make or modify change any material indebtedness or Tax election, (iii) assumesettle or compromise any material U.S. federal, guaranteestate, endorselocal or non-U.S. income Tax liability, xxxxx x xxxx (iv) fail to file any material income or other material Tax Return when due or fail to cause such Tax Returns when filed to be complete and accurate in all material respects, (v) enter into any “listed transaction” as defined in Section 6011 of the Code and the regulations thereunder or (vi) consent to any extension or waiver of any limitation period with respect to any claim or assessment for material Taxes;
(l) hire any new employees other than a Permitted Lienin the ordinary course of business consistent with past practice; provided that, whether or not in the ordinary course of business, the Company may not hire any executive officers except, subject to clause (g) on above, to fill any vacancies in such positions arising after the date hereof;
(m) waive, release, grant or transfer any right of material value, other than in the ordinary course of business, consistent with past practice;
(n) terminate any executive officer or key employee of the Company or any of its Subsidiaries other than for good reason or for reasonable cause;
(o) enter into any transaction that could give rise to a disclosure obligation as a “listed transaction” under Section 6011 of the Company’s assets Code and the regulations thereunder;
(p) effectuate a “plant closing” or “mass layoff,” as security those terms are defined in WARN, affecting in whole or otherwise become liable for indebtedness in part any site of another Person (excluding employment, facility, operating unit or employee of the Company or any of its Subsidiaries);
(q) grant any material refunds, credits, rebates or other allowances by the Company to any end user, customer, reseller or distributor, in each case, other than in the ordinary course of business;
(r) sell, license or otherwise transfer any Intellectual Property other than in the ordinary course of business, disclose any Source Code of the Company Software to any Person, or abandon or permit to lapse any material Intellectual Property other than in the ordinary course of business;
(s) communicate with employees of the Company or any of its Subsidiaries regarding the compensation, benefits or other treatment that they will receive in connection with the Merger in a manner inconsistent with prior directives or documentation provided to the Company by Parent, provided, however, that nothing herein shall prevent or restrict communications with employees of the Company or any of its Subsidiaries that are consistent with this Agreement and provide accurate information regarding compensation, benefits or other treatment that they will receive in connection with the Merger;
(t) acquire (by merger, consolidation or acquisition of stock or assets) any other Person or any material equity interest therein; or
(iu) agree, resolve, authorize or commit agree to take any action prohibited by of the actions described in this Section 5.24.2. The parties hereto acknowledge and hereby agree that the restrictions set forth in this Section 4.2 are not intended to give Parent or Merger Sub, directly or indirectly, the right to control or direct the business or operations of the Company or its Subsidiaries at any time prior to the Effective Time, and notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent or Merger Sub will be required with respect to any matter set forth in this Agreement to the extent the requirement of such consent would violate any applicable Law. Prior to the Effective Time, the Company and its Subsidiaries shall exercise (consistent with and subject to the terms, conditions and restrictions of this Agreement) control and supervision over their own business and operations.
Appears in 1 contract
Forbearance Covenants. Except (aw) as expressly contemplated by this Agreement, ; (bx) as set forth in Section 5.1 or Section 5.2 of the Company Disclosure Letter, ; (cy) as required by applicable Law, or (dz) as approved in writing in advance in writing (e-mail correspondence being sufficient) by the Purchaser Parent (which approval will not be unreasonably withheld, conditioned or delayed), during the period from the execution and delivery of this Agreement until the earlier to occur of the termination of this Agreement pursuant to Article IX VIII and the ClosingEffective Time, the Company will shall not, and will not permit any shall cause each of its Subsidiaries as applicable not to, directly or indirectly:
(a) take any action set forth in Section 4.1 to amend any Organizational Documents of the Stockholders AgreementCompany or its Subsidiaries;
(b) acquire propose or agree to acquireadopt a plan of complete or partial liquidation, directly or indirectly, by purchasedissolution, merger, consolidation consolidation, restructuring, recapitalization or otherwise, equity or assets constituting all or substantially all of the business of (or any division of the business of) another Personother reorganization;
(c) issue, sell, assign, transfer, license, sublicense, abandon, permit to lapse, grant a covenant not to xxx, or otherwise dispose of any material Intellectual Property (other than non-exclusive licenses or sublicenses granted in the ordinary course of business);
(d) (i) authorize for issuance, issue, deliver, sell or transfer deliver or agree or commit to issue, deliver, sell or transfer any shares of capital stock of or other equity interest or convertible security in the Company or any of its Subsidiaries or other rights of any kind to acquire, any shares of capital stock of or any other equity interest in the Company or any of its Subsidiaries, other than deliver (x) whether through the issuance or granting of capital stock options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities or securities or other equity interests pursuant to any Employee Plan or (y) the issuance of capital stock or other equity interests from any wholly owned Subsidiary to the Company or any other wholly owned Subsidiary of the Company, (ii) amend or modify any term or provision of any of the Company’s outstanding equity securities Subsidiaries, except (i) in connection with agreements in effect on the date of this Agreement and set forth on Section 5.2(c) of the Company Disclosure Letter or (iiiii) accelerate or waive any restrictions pertaining to the vesting issuances of any Company equity-based awards or warrants or other rights of any kind to acquire any shares of capital stock Shares or other equity interests in of the Company’s Subsidiaries upon exercise of Company Equity Awards outstanding as of the date of this Agreement or issued in compliance with Section 5.2;
(d) directly or indirectly acquire, repurchase or redeem any Company Securities, except for (i) repurchases of Company Securities pursuant to the terms and conditions of Company Equity Awards, or (ii) transactions between the Company and any of its direct or indirect Subsidiaries;
(e) propose (i) adjust, split, combine or commit to reclassifyreclassify any share capital, combine, split or subdivide any capital stock of the Company or issue or authorize or propose the issuance of any other Company Securities or any securities or equity interests of the Company’s Subsidiaries in respect of, in lieu of, of or in substitution for, share capital or other equity or voting interest; (ii) declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any share capital stock or other equity or voting interest, or make any other actual, constructive or deemed distribution in respect of the share capital or other equity or voting interest, except for cash dividends made by any direct or indirect wholly-owned Subsidiary of the Company to the Company or any one of its other wholly-owned Subsidiaries, except for, with respect to ; or (iii) pledge or encumber any Subsidiary of the Company, any intercompany restructuring, recapitalization share capital or similar transaction that will not have a Company Material Adverse Effectother equity or voting interest;
(f) enter into, amend or terminate any Contract with Starboard Value LP or any of its Affiliates;
(g) except as required under applicable Law or the terms of any Employee Plan existing as of the date of this Agreement, (i) increase the compensation incur, assume or benefits payable to suffer any current or former director or executive officer of the Company or any employee of the Company whose annual base salary is at least $300,000 Indebtedness (in each case, other than annual merit increases accrued and unpaid interest or related expenses) or issue any debt securities, except (a) for trade payables incurred in the ordinary course of business; (b) for loans or advances to Subsidiaries of the Company; (c) pursuant to the Credit Agreement in an amount not to exceed $50,000,000.00 in the aggregate and (d) up to $1,000,000 of additional Indebtedness; (ii) enter into any newassume, or amend any existing, employment, severance, change in control, retention, bonus guarantee, endorse or collective bargaining agreement otherwise become liable or similar agreement responsible (whether directly, contingently or arrangement;
otherwise) for the obligations of any other Person, except with respect to obligations of direct or indirect wholly-owned Subsidiaries of the Company; (iiii) make any loans, advances or capital contributions to, or investments in, any other Person, except for (a) extensions of credit to customers or (b) advances to directors, officers and other employees, in each case in the ordinary course of business consistent with past practice; (iv) mortgage or pledge any assets, tangible or intangible, or create or suffer to exist any lien thereupon (other than investments by Permitted Liens); or (v) cancel any material Indebtedness owed to the Company or any of its Subsidiaries
(g) (i) enter into, adopt, amend or modify in any respect any Employee Plan or accelerate compensation benefits provided under any Employee Plan, except any amendments in the ordinary course of business consistent with past practice that are in connection with a wholly owned Subsidiary customary annual renewal or enrollment process of an Employee Plan that is a group health or welfare plan or do not, individually or in the Company aggregate, materially increase the cost to a wholly owned Subsidiary the Company, in the aggregate, of maintaining such Employee Plan; (ii) increase the compensation of any director, officer, employee or other service provider of the Company or the Company any of its Subsidiaries, pay any special bonus or advances of expenses special remuneration to any director, officer, employee or agent other service provider of the Company in connection with advancement obligations in effect on the date of this Agreement, (ii) incur, assume or modify any material indebtedness or (iii) assume, guarantee, endorse, xxxxx x xxxx (other than a Permitted Lien) on any of the Company’s assets as security or otherwise become liable for indebtedness of another Person (excluding the Company or any of its Subsidiaries, or pay any benefit not required by the terms of any Employee Plan as in effect as of the date of this Agreement, except for increases in compensation and/or benefits for employees (based on promotion or merit) made in the ordinary course of business and consistent with past practice; provided that increases in compensation, in the aggregate, are of not more than three percent (3%) of the aggregate annual base salaries or base wages of all directors, officers, employees or other service providers of the Company or any of its Subsidiaries; (iii) enter into any employment, termination, severance or retention agreement (excluding (x) arrangements that provide for no severance or change in control benefits or (y) agreements entered into in the ordinary course of business that provide for severance that is consistent with the Company’s severance policies and practices made available to Parent and set forth on Section 3.19 of the Company Disclosure Letter and past practices) with any directors, officers, employees or other service providers of the Company or any of its Subsidiaries other than the entry into employment agreements in the ordinary course of business consistent with past practice with new employees permitted to be hired under this Agreement, provided that each such employment agreement is in all material respects consistent with the standard form made available to Parent prior to the date of this Agreement where the severance period or required notice of termination provided is not in excess of ninety (90) days or such longer period as is required under local Law; (iv) terminate (other than for cause), hire or engage the services of any individual with a title of Senior Vice President or above or whose annual base salary is $200,000 or more, other than any individual replacing a former employee at the same level; (v) grant any equity or equity-based awards; (vi) other than in connection with the entry into employment agreements as permitted under clause (iii) of this paragraph, grant any rights to severance or termination pay or other termination benefit; (vii) enter into any change-in-control, transaction bonus, Tax gross-up, or retention agreements with any directors, officers, employees or other service providers;
(h) recognize or certify any Labor Organization as the bargaining representative for any employees of the Company or any of its Subsidiaries except as required by Law or enter into (or commit to enter into) any Collective Bargaining Agreement or any other material agreement with any Labor Organization;
(i) pay, discharge, settle or satisfy any pending or threatened Legal Proceeding, except for the payment, discharge, settlement or satisfaction of any Legal Proceeding that is (i) reflected or reserved against in the Audited Company Balance Sheet for solely monetary payments up to the amounts reserved against or (ii) for solely monetary payments of no more than $1,000,000 individually and $5,000,000 in the aggregate, in each case, in addition to any applicable amount set forth in clause (i) if applicable;
(j) except as required by applicable Law or GAAP, (i) revalue any of its properties or assets, including writing-off notes or accounts receivable, other than in the ordinary course of business consistent with past practice; or (ii) make any material change in any of its accounting principles or practices;
(i) make any tax election (except in the ordinary course of business of preparing Tax Returns), or make, rescind or change any material Tax election; (ii) settle or compromise any Tax claim or assessment involving a material amount of Taxes; (iii) consent to any extension or waiver of any limitation period with respect to any material Tax claim or assessment; (iv) adopt or change any material Tax accounting policies; (v) enter into any material closing, voluntary disclosure or similar agreement with a Tax authority; or (vi) file any material Tax Return inconsistent with past practice or amend any material Tax Return;
(l) fail to renew, enter into, modify in any material respect, amend in any material respect or terminate any, (i) Contract that if so failed to renew, entered into, modified, amended or terminated would have a Company Material Adverse Effect; or (ii) Material Contract, provided that in the cause of clause (ii), the Company and its Subsidiaries may fail to renew, amend or modify any such Material Contract in the ordinary course of business consistent with past practices;
(m) fail to use commercially reasonable efforts to keep in force insurance policies or maintain insurance at less than current levels or otherwise in a manner inconsistent with past practice;
(n) renew or enter into any non-compete, exclusivity, non-solicitation or similar arrangement that would restrict or limit, in any material respect, the operations of the Company or any of its Subsidiaries, other than customary employee non-solicits entered into in the ordinary course of business consistent with past practices;
(o) other than with respect to the matters set forth in Section 5.2(g), engage in any transaction with, or enter into any agreement, arrangement or understanding with, any Affiliate of the Company or other Person covered by Item 404 of Regulation S-K promulgated by the SEC that would be required to be disclosed pursuant to Item 404;
(p) effectuate or continue a “plant closing” or “mass layoff” (as defined in WARN or within the meaning of any similar Law);
(q) make any acquisition or disposition of, or lease, license, pledge or transfer, a material asset or business (including by merger, consolidation or acquisition of stock or assets), except for (i) any acquisition or disposition for consideration that is individually not in excess $1,000,000 and in the aggregate not in excess of $5,000,000 or (ii) any disposition of obsolete or worn out equipment or Intellectual Property that is not material to the business of the Company and its Subsidiaries;
(r) incur or commit to incur any material capital expenditure or authorization or commitment with respect thereto not provided for in the capital expenditure budget previously provided to Parent;
(s) enter into any new line of business outside of the Company’s and its Subsidiaries’ existing businesses on the date of this Agreement; or
(it) agree, resolve, authorize or commit enter into a Contract to take any action of the actions prohibited by this Section 5.2.
Appears in 1 contract
Samples: Merger Agreement (Cision Ltd.)
Forbearance Covenants. Except (a) as expressly contemplated by this Agreement, (bi) as set forth in Section 5.1 or Section 5.2 5.2 of the Company Disclosure Letter, ; (c) as required by applicable Law, or (dii) as approved in advance by Parent in writing by the Purchaser (which approval will not be unreasonably withheld, conditioned or delayed); or (iii) as expressly contemplated by the terms of this Agreement or required by applicable law or order, at all times during the period from commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant to Article IX Article VIII and the ClosingEffective Time, the Company will not, and will not permit any of its Subsidiaries Subsidiaries, to, directly or indirectly:
(a) take amend the Charter, the Bylaws, or any action set forth other similar organizational document, other than in Section 4.1 respect of the Stockholders AgreementSubsidiaries in immaterial respects;
(b) acquire propose or agree to acquireadopt a plan of complete or partial liquidation, directly or indirectly, by purchasedissolution, merger, consolidation consolidation, restructuring, recapitalization, statutory conversion, division, redomestication, share exchange or otherwise, equity or assets constituting all or substantially all of the business of (or any division of the business of) another Personother reorganization;
(c) issue, sell, assign, transfer, license, sublicense, abandon, permit to lapse, grant a covenant not to xxx, or otherwise dispose of any material Intellectual Property (other than non-exclusive licenses or sublicenses granted in the ordinary course of business);
(d) (i) authorize for issuance, issue, deliver, sell or transfer deliver or agree or commit to issue, deliver, sell or transfer deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities, except for the issuance or sale of shares of Company Common Stock in connection with the exercise or settlement (as applicable) of the Company Equity Awards outstanding as of the date hereof in accordance with their terms as in effect on the date hereof;
(d) directly or indirectly acquire, repurchase or redeem any securities, except for (A) repurchases, withholdings, or cancellations of Company Securities pursuant to the terms and conditions of the Company Equity Awards outstanding as of the date hereof in accordance with their terms as in effect on the date hereof; or (B) transactions between the Company and any of its direct or indirect Subsidiaries;
(e) (A) adjust, split, combine or reclassify any shares of capital stock of stock, or other equity interest issue or convertible security in the Company authorize or any of its Subsidiaries or other rights of any kind to acquire, any shares of capital stock of or any other equity interest in the Company or any of its Subsidiaries, other than (x) propose the issuance of any other Company Securities in respect of, in lieu of or in substitution for, shares of its capital stock or other equity interests pursuant to or voting interest; (B) declare, set aside or pay any Employee Plan or (y) the issuance of capital stock dividend or other equity interests from any wholly owned Subsidiary to the Company distribution (whether in cash, shares or property or any other wholly owned Subsidiary combination thereof) in respect of the Company, (ii) amend or modify any term or provision of any of the Company’s outstanding equity securities or (iii) accelerate or waive any restrictions pertaining to the vesting of any Company equity-based awards or warrants or other rights of any kind to acquire any shares of capital stock or other equity interests or voting interest, or make any other actual, constructive or deemed distribution in the Company;
(e) propose or commit to reclassify, combine, split or subdivide any capital stock respect of the Company or issue or authorize the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of capital stock or other equity or voting interest, except for cash dividends made by any direct or indirect wholly owned Subsidiary of the Company to the Company, or any of its Subsidiaries, except for, with respect to any Subsidiary one of the Company, ’s other wholly owned Subsidiaries; (C) pledge or encumber any intercompany restructuring, recapitalization shares of its capital stock or similar transaction that will not have a Company Material Adverse Effectother equity or voting interest; or (D) modify the terms of any shares of its capital stock or other equity or voting interest;
(f) enter into(A) incur or assume any Indebtedness (including any long-term or short-term debt) or issue any debt securities, amend or terminate any Contract with Starboard Value LP or any of its Affiliates;
except (g1) except as required under applicable Law or the terms of any Employee Plan existing as of the date of this Agreement, (i) increase the compensation or benefits payable to any current or former director or executive officer of the Company or any employee of the Company whose annual base salary is at least $300,000 (in each case, other than annual merit increases for trade payables incurred in the ordinary course of business; (2) obligations incurred pursuant to business credit cards in the ordinary course of business; (3) borrowings under the Revolving Credit Facility (as defined in the Company Credit Agreement) in the ordinary course of business; and (4) intercompany loans or advances between or among the Company and its direct or indirect wholly-owned Subsidiaries; or (iiB) enter into any newassume, or amend any existing, employment, severance, change in control, retention, bonus guarantee, endorse or collective bargaining agreement otherwise become liable or similar agreement responsible (whether directly, contingently or arrangementotherwise) for the obligations of any other Person, except with respect to obligations of any direct or indirect wholly owned Subsidiaries of the Company;
(ig) mortgage or pledge any of its and its Subsidiaries’ assets, tangible or intangible, or create or incur any lien thereupon (other than Permitted Liens), other than in connection with financing transactions permitted by Section 5.2(f) or consented to by Parent;
(h) make any loans, advances or capital contributions to, or investments in, any other Person, except for (1) extensions of credit to customers in the ordinary course of business; (2) advances to Service Providers for travel and other than business-related expenses, in each case, in the ordinary course of business and in compliance in all material respects with the Company Group’s policies related thereto; and (3) loans, advances or other extensions of credit or capital contributions to, or investments by in, the Company or a wholly any direct or indirect wholly-owned Subsidiary Subsidiaries of the Company;
(i) acquire, lease, license, sell, abandon, transfer, assign, guarantee, or exchange any (x) Company Intellectual Property, or (y) assets in excess of $500,000, and other than (1) the acquisition, sale, lease or licensing of Company Products or other materials embodying Company Intellectual Property in the ordinary course of business; (2) the acquisition, assignment or abandonment of immaterial Company Intellectual Property in connection with the exercise of the reasonable business judgment of the Company Group in the ordinary course of business; and (3) any capital expenditures permitted by (or consented to a wholly owned Subsidiary by Parent under) Section 5.2(n);
(A) except as required by applicable law or the terms of the Company or the Company or advances of expenses to any director, officer, employee or agent of the Company in connection with advancement obligations Employee Plans as in effect on the date hereof, enter into, adopt, amend (including accelerating the vesting, payment or funding), modify or terminate any Employee Plan or other plan, program, agreement or arrangement that would constitute an Employee Plan if in effect on the date hereof (other than at-will offer letters (or, for jurisdictions outside of this the United States, employment agreements that provide for employment periods or rights no greater than required by applicable law) entered into with newly hired employees of the Company Group in the ordinary course of business and whose annual base salary or wages is less than $175,000); (B) increase the compensation of Service Provider, grant any Company Equity Award or pay any special bonus or special remuneration to any Service Provider, grant any Company Equity Award or pay any benefit not required by (or accelerate the time of payment or vesting of any payment becoming due under) any Employee Plan as in effect as of the date hereof, except in the case of each of clauses (A) and (B), as may be required by applicable law or the terms of the applicable Employee Plan in effect as of the date hereof or for normal increases in cash compensation in the ordinary course of business for Service Providers with an annual base salary or wages (or, in the case of non-employee Service Providers, equivalent compensation) of less than $175,000; (C) enter into any change in control, severance or similar agreement or any retention or similar agreement with any employee of the Company Group, except in the case of separation and release agreements entered into in the ordinary course of business providing for severance in accordance with the terms of the applicable Employee Plan as in effect on the date hereof applicable to employees of the Company Group with an annual base salary or wages of less than $175,000; or (D) hire, terminate (other than for “cause” or equivalent under applicable local law), furlough or temporarily lay off any Service Provider, in each case with an annual base salary or wages (or, in the case of non-employee Service Providers, equivalent compensation) of $175,000 or more;
(k) settle, release, waive or compromise any pending or threatened material Legal Proceeding or other claim, except for the settlement of any Legal Proceedings or other claim that is (A) reflected or reserved against in the Audited Company Balance Sheet; (B) for solely monetary payments of, net of insurance recovery, no more than $250,000 individually and $1,000,000 in the aggregate, and that does not involve any admission of wrongdoing; or (C) settled in compliance with Section 6.15;
(l) except as required by applicable law or GAAP, (A) revalue in any material respect any of its properties or assets, including writing-off notes or accounts receivable, other than in the ordinary course of business; or (B) make any change in any of its accounting principles or practices;
(A) make (except in the ordinary course of business) or change any material Tax election; (B) settle, consent to or compromise any material Tax claim or assessment or surrender a right to a material Tax refund; (C) consent to any extension or waiver of any limitation period with respect to any material Tax claim or assessment (other than an extension of a limitation period arising by operation of law as a result of an automatic extension of time to file any Tax Return obtained in the ordinary course of business); (D) file any amended Tax Return; or (E) enter into a closing agreement or voluntary disclosure agreement with any Governmental Authority regarding any material Taxes;
(n) incur or commit to incur any capital expenditure(s) other than consistent with the capital expenditure budget attached to Section 5.2(n) of the Company Disclosure Letter;
(o) enter into, modify, amend or terminate any (i) Contracts (other than any Material Contract) that if so entered into, modified, amended or terminated would, individually or in the aggregate, have a Company Material Adverse Effect; or (ii) Material Contract or any Contract that would have been a Material Contract if such Contract was in existence as of the date hereof, except in the ordinary course of business or as permitted under Section 5.2(c) and Section 5.2(j);
(p) maintain insurance at less than current levels or otherwise in a manner inconsistent with past practice;
(q) engage in any transaction with, or enter into any agreement, arrangement or understanding with, any Affiliate of the Company or other Person covered by Item 404 of Regulation S-K promulgated by the SEC that would be required to be disclosed pursuant to Item 404;
(r) effectuate or announce any closing, employee layoff, furlough, reduction to terms and conditions of employment or other event affecting in whole or in part any site of employment, facility, operating unit or employee that would result in liability of the Company Group under the WARN Act;
(s) grant any material refunds, credits, rebates or other allowances to any end user, customer, reseller or distributor, in each case other than in the ordinary course of business;
(t) acquire (by merger, consolidation or acquisition of stock or assets) any other Person or any material portion thereof or material equity interest therein or enter into any Contract that involves a joint venture entity, limited liability company or legal partnership (excluding, for avoidance of doubt, reseller agreements and other commercial agreements that do not involve the formation of an entity with any third Person);
(u) (A) enter into, negotiate, modify or terminate any Collective Bargaining Agreement or agreement or arrangement to form a works council or other Contract with any labor union, works council, or other labor organization; or (B) recognize or certify any labor union, works council or other labor organization, or group of employees, as the bargaining representative for any employees of the Company Group;
(v) waive or release any noncompetition, nonsolicitation, nondisclosure, noninterference, nondisparagement, or other restrictive covenant obligation of any current or former Service Provider;
(w) adopt or implement any stockholder rights plan or similar arrangement, in each case, applicable to the Merger or any other transaction consummated in compliance with Parent’s rights under Section 5.3(d)(i)(2) or Section 5.3(d)(ii)(2);
(i) cancel, modify, amend or waive or terminate the Company Credit Agreement, except for modifications or amendments to the Company Credit Agreement that would not impair the ability of Parent to obtain the Debt Financing, (ii) incur, assume or modify reduce the ability of the Company and its Subsidiaries to incur secured debt for borrowed money in the form of the Debt Financing on the Closing Date in any material indebtedness or respect, (iii) assume, guarantee, endorse, xxxxx x xxxx reduce the ability of the Company and its Subsidiaries to make Restricted Payments (other than a Permitted Lienas defined in the Company Credit Agreement) on the Closing Date in any material respect, (iv) impair the ability of the Company’s assets as security Merger to be consummated in compliance with any “merger” or “fundamental changes” covenant in the Company Credit Agreement, (v) consent to or otherwise become liable for indebtedness permit any assignment or transfer of another Person (excluding rights or interests of the Company or any of its Subsidiaries)Subsidiaries in or with respect to the Company Credit Agreement or borrowings thereunder, (vi) fail to make any interest payment under the Company Credit Agreement as and when due or (vii) amend or modify the stated final maturity date of any indebtedness for borrowed money thereunder to be sooner than such maturity date as in effect as of the date hereof, amend or modify the interest rate or undrawn commitment fees payable by the Company or its Subsidiaries under any such agreement in a manner materially adverse to the Company and its Subsidiaries or amend or modify any such agreement to reduce the amount of the total lending commitments thereunder;
(y) apply for, seek or obtain any Permit, or enter any new geographic market, if doing so (i) would prevent, materially delay or materially impede the transactions contemplated hereby or (ii) would require the Buyer Parties, GA, Stone Point or their respective Affiliates to make any filing or notice with or disclosure to any Governmental Authority; or
(iz) agree, resolveenter into, authorize any of, or agree or commit to enter into a Contract to take any action of the actions prohibited by this Section 5.25.2.
Appears in 1 contract
