Forbearance Covenants. Except (a) as expressly contemplated by this Agreement, (b) as set forth in the Company Disclosure Letter, (c) as required by applicable Law, (d) as necessary in response to COVID-19 and any COVID-19 Measures, including to (A) protect the health and safety of the Company’s and its Subsidiaries’ employees, suppliers, partners and other individuals having business dealings with the Company and its Subsidiaries or (B) respond to third-party supply or service disruptions caused by COVID-19 or any COVID-19 Measures; provided that the Company has consulted with Parent and considered in good faith any recommendations of Parent or (e) as approved by Parent in writing (which approval shall not be unreasonably withheld, conditioned or delayed and shall be deemed given if Parent provides no written response within (x) five (5) Business Days after a written request by the Company for such consent or (y) one (1) Business Day after a written request by the Company for such consent that states that such request is being made in response to an emergency or exigent circumstance), 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 VIII and the Effective Time, the Company shall not, and shall not permit any of its Subsidiaries, to: (a) amend the Organizational Documents of the Company, or any of its Subsidiaries (other than immaterial ministerial changes to the Organizational Documents of any of its Subsidiaries); (b) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization; (c) issue, sell, deliver or agree or commit to issue, sell or deliver any Company Securities, including, for the avoidance of doubt, any Company Equity Awards, except (i) in accordance with the terms of any employment agreements or arrangements set forth on Schedule 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 Options, Company RSUs or Company PSUs, in each case, in effect on the date of this Agreement or granted or entered into after the date hereof in compliance with this Agreement as described in Section 5.2(g) of the Company Disclosure Letter; and (ii) pursuant to the Company ESPP in accordance with its terms and Section 2.8(e) hereof, in each case, including with respect to the satisfaction of Tax withholding and, with respect to the Company Options, payment of the exercise price; (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 Company Securities, 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 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, 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) 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 for an amount up to $20 million, (B) 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), (C) performance bonds and surety bonds entered into in the ordinary course of business, and (D) any Indebtedness among the Company and its Subsidiaries or among the Company’s Subsidiaries; (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); (ii) increase the compensation of any director, officer or employee or other individual independent contractor of the Company Group; 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; (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 Schedule 3.18(a); (C) in conjunction with annual renewal or plan design changes for 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; or (D) any bonus payable with respect to the 2022 fiscal year in the ordinary course of business consistent with past practice and in accordance with the terms of the annual bonus plan in effect as of the date of this Agreement and set forth on Schedule 3.18(a) and, in each case, as further modified by Section 5.2(g) of the Company Disclosure Letter; (h) settle, release, waive or compromise any pending or threatened Legal Proceeding other than (A) for an amount of no more than $1,000,000 individually or $5 million in the aggregate (provided no equitable relief has been sought or given), (B) 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 (C) settlements of any Legal Proceedings for an amount not in excess of 110% of the amount, if any, reflected or reserved in the balance sheet (or the notes thereto) of the Company; (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 material Tax claim or assessment; consent to any extension or waiver of any limitation period with respect to any material 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 unless required by Law; or enter into a closing agreement with any Governmental Authority regarding any material Tax; (k) incur or commit to incur any capital expenditures other than (i) (x) during fiscal year 2022, amounts not in excess of 110% of the capital expenditure budget for the fiscal year 2022, set forth in Section 5.2(k) of the Company Disclosure Letter (the “Capex Budget”) and (y) during fiscal year 2023 amounts not in excess of 110 % of the Capex Budget; or (ii) pursuant to obligations imposed by any Material 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 (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(hhh)(iii) shall be exclusively governed by Section 5.2(b) and (y) described by the definition set forth in Section 1.1(hhh)(vi) 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 (including by merger, consolidation or acquisition of stock or assets), other than (i) in or from any wholly owned Subsidiary of the Company, (ii) acquisitions of products and services in the ordinary course of business not pursuant to a merger, consolidation or acquisition of stock or assets or (iii) that do not exceed $5 million in the aggregate; (n) sell, assign, transfer, or otherwise dispose of, any of the Company’s or its Subsidiaries’ material tangible assets, other than such sales, assignments, transfers or other dispositions that (i) sales of products and services or dispositions of tangible assets in the ordinary course of business or (ii) do not have a net book value or fair market value that exceeds $5 million individually or $10 million in the aggregate; (o) 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 (other than transactions entered into in the ordinary course of business on arms-length terms with portfolio companies affiliated with the Principal Stockholders); (p) sell, assign, transfer, license, abandon, cancel, permit to lapse or enter the public domain, pledge, encumber or otherwise dispose of any material Company Owned Intellectual Property, other than (x) the grant of non-exclusive licenses in the ordinary course of business, or (y) pledges or encumbrances under the Company Credit Agreement as in effect on the date hereof; (q) 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; (r) 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 Group’s policies related thereto; (iii) loans, advances or capital contributions to, or investments in, any direct or indirect wholly-owned Subsidiaries of the Company; and (iv) in amounts less than $1 million in the aggregate; (s) enter into, amend or terminate any collective bargaining agreement or other labor agreement with a labor union, works council or similar labor organization; (t) adopt or implement any stockholder rights plan or similar arrangement applicable to the Transactions or any other transaction consummated pursuant to Parent’s rights under Section 5.3(d); or (u) agree, resolve or commit to take any of the actions prohibited by this Section 5.2.
Appears in 2 contracts
Samples: Merger Agreement (Datto Holding Corp.), Merger Agreement (Datto Holding Corp.)
Forbearance Covenants. Except (aw) as expressly contemplated by this Agreement, Agreement and the consummation of the Merger and the transactions contemplated hereby; (bx) as set forth in Section 5.2 of the Company Disclosure Letter, ; (cy) as required by applicable Law, (d) as necessary in response to COVID-19 and any COVID-19 Measures, including to (A) protect the health and safety of the Company’s and its Subsidiaries’ employees, suppliers, partners and other individuals having business dealings with the Company and its Subsidiaries or (B) respond to third-party supply or service disruptions caused by COVID-19 Law or any COVID-19 Measures; provided that the Company has consulted with Parent and considered in good faith any recommendations of Parent or (ez) as approved in writing in advance (e-mail correspondence being sufficient) by Parent in writing (which approval shall will not be unreasonably withheld, conditioned or delayed and shall be deemed given if Parent provides no written response within (x) five (5) Business Days after a written request by the Company for such consent or (y) one (1) Business Day after a written request by the Company for such consent that states that such request is being made in response to an emergency or exigent circumstancedelayed), 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 Article VIII and the Effective Time, the Company shall not, and shall not permit any cause each of its Subsidiaries, Subsidiaries as applicable not to:
(a) amend the any Organizational Documents of the Company, Company or any of its Subsidiaries (other than immaterial ministerial changes amendments to the Organizational Documents of any Subsidiary of its Subsidiariesthe Company that would not and would not reasonably be expected to prevent, materially delay or materially impair the consummation of the transactions contemplated hereunder);
(b) propose except for transactions solely among the Company and its wholly owned Subsidiaries or adopt a plan of complete or partial liquidationsolely among the Company’s wholly owned Subsidiaries, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization;
(c) issue, sell, deliver or agree 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, including, for Securities or securities or other equity interests of any of the avoidance of doubt, any Company Equity AwardsCompany’s Subsidiaries, except (i) in accordance with the terms of any employment agreements or arrangements set forth on Schedule 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 Options, Company RSUs or Company PSUs, in each case, in effect on the date of this Agreement or granted or entered into after the date hereof in compliance with this Agreement as described in Section 5.2(g) of the Company Disclosure Letter; and (ii) pursuant to the Company ESPP in accordance with its terms and Section 2.8(e) hereof, in each case, including with respect to the satisfaction of Tax withholding and, with respect to the Company Options, payment of the exercise price;
(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 Company Securities, 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 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, 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) 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 for an amount up to $20 million, (B) 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), (C) performance bonds and surety bonds entered into in the ordinary course of business, and (D) any Indebtedness among the Company and its Subsidiaries or among the Company’s Subsidiaries;
(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); (ii) increase the compensation of any director, officer or employee or other individual independent contractor of the Company Group; 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; (B) to the extent required by applicable Law or pursuant to any Employee Plan agreements in effect on the date of this Agreement and set forth on Schedule 3.18(a); Section 5.2(b) of the Company Disclosure Letter or (Cii) in conjunction with annual renewal or plan design changes for Employee Plans (other than severance or separation plans, bonus issuances of Company Shares 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; or (D) any bonus payable with respect to the 2022 fiscal year in the ordinary course of business consistent with past practice and in accordance with the terms interests of the annual bonus plan in effect Company’s Subsidiaries upon exercise or settlement of Company Equity Awards outstanding as of the date of this Agreement and set forth on Schedule 3.18(a) and, in each case, as further modified by Section 5.2(g) of the Company Disclosure Letter;
(h) settle, release, waive or compromise any pending or threatened Legal Proceeding other than (A) for an amount of no more than $1,000,000 individually or $5 million in the aggregate (provided no equitable relief has been sought or given), (B) 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 (C) settlements of any Legal Proceedings for an amount not in excess of 110% of the amount, if any, reflected or reserved in the balance sheet (or the notes thereto) of the Company;
(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 material Tax claim or assessment; consent to any extension or waiver of any limitation period with respect to any material 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 unless required by Law; or enter into a closing agreement with any Governmental Authority regarding any material Tax;
(k) incur or commit to incur any capital expenditures other than (i) (x) during fiscal year 2022, amounts not in excess of 110% of the capital expenditure budget for the fiscal year 2022, set forth in Section 5.2(k) of the Company Disclosure Letter (the “Capex Budget”) and (y) during fiscal year 2023 amounts not in excess of 110 % of the Capex Budget; or (ii) pursuant to obligations imposed by any Material 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 (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(hhh)(iii) shall be exclusively governed by Section 5.2(b) and (y) described by the definition set forth in Section 1.1(hhh)(vi) 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 (including by merger, consolidation or acquisition of stock or assets), other than (i) in or from any wholly owned Subsidiary of the Company, (ii) acquisitions of products and services in the ordinary course of business not pursuant to a merger, consolidation or acquisition of stock or assets or (iii) that do not exceed $5 million in the aggregate;
(n) sell, assign, transfer, or otherwise dispose of, any of the Company’s or its Subsidiaries’ material tangible assets, other than such sales, assignments, transfers or other dispositions that (i) sales of products and services or dispositions of tangible assets in the ordinary course of business or (ii) do not have a net book value or fair market value that exceeds $5 million individually or $10 million in the aggregate;
(o) 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 (other than transactions entered into in the ordinary course of business on arms-length terms with portfolio companies affiliated with the Principal Stockholders);
(p) sell, assign, transfer, license, abandon, cancel, permit to lapse or enter the public domain, pledge, encumber or otherwise dispose of any material Company Owned Intellectual Property, other than (x) the grant of non-exclusive licenses in the ordinary course of business, or (y) pledges or encumbrances under the Company Credit Agreement as in effect on the date hereof;
(q) 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;
(r) 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 issued in compliance in all material respects with the Company Group’s policies related thereto; (iii) loans, advances or capital contributions to, or investments in, any direct or indirect wholly-owned Subsidiaries of the Company; and (iv) in amounts less than $1 million in the aggregate;
(s) enter into, amend or terminate any collective bargaining agreement or other labor agreement with a labor union, works council or similar labor organization;
(t) adopt or implement any stockholder rights plan or similar arrangement applicable to the Transactions or any other transaction consummated pursuant to Parent’s rights under Section 5.3(d); or
(u) agree, resolve or commit to take any of the actions prohibited by this Section 5.2.;
Appears in 1 contract
Forbearance Covenants. Except (a) as expressly contemplated permitted or required by this Agreement, (b) as set forth in Section 5.2 of the Company Disclosure Letter, (c) as required by applicable Law, (d) as necessary pursuant to and in response to COVID-19 and any COVID-19 Measures, including to (A) protect the health and safety of the Company’s and its Subsidiaries’ employees, suppliers, partners and other individuals having business dealings accordance with the Company second and its Subsidiaries or (B) respond to third-party supply or service disruptions caused by COVID-19 or any COVID-19 Measures; provided that the Company has consulted with Parent and considered in good faith any recommendations third provisos of Parent Section 5.1 or (e) as approved by Parent in writing (which approval shall not be unreasonably withheld, conditioned or delayed and shall be deemed given if Parent provides no written response within (x) five (5) Business Days after a written request by the Company for such consent or (y) one (1) Business Day after a written request by the Company for such consent that states that such request is being made in response to an emergency or exigent circumstancedelayed), 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 VIII and the Effective Time, the Company shall not, and shall not permit any of its Subsidiaries, to:
(a) amend amend, modify, waive, rescind, change or otherwise restate the Organizational Documents of the Company, Company or any Subsidiaries of its Subsidiaries (other than immaterial ministerial changes to the Organizational Documents of any of its Subsidiaries)Company;
(b) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization;
(c) issue, sell, deliver or agree or commit to issue, sell or deliver any Company Securities, including, for the avoidance of doubt, any Company Equity Awards, except (i) in accordance with and as required by the terms of any employment agreements or arrangements set forth on Schedule 5.2(c)(i) award agreement in effect as of the Company Disclosure Letter or any award agreements date hereof under the Company Stock Plans (or otherwise any award agreement entered into after the date hereof in accordance with respect to, and Schedule 5.2(c)) or upon the vesting, exercise or settlement of, Company Options, Company RSUs Options or Company PSUsRSUs, in each case, case in effect on the date of this Agreement or granted or entered into after following the date hereof in compliance with of this Agreement as described in Section 5.2(g) of the Company Disclosure Letter; and (ii) pursuant to the Company ESPP in accordance with its the terms and Section 2.8(e) hereof, in each case, including with respect to the satisfaction of Tax withholding and, with respect to the Company Options, payment of the exercise pricethis Agreement;
(d) except for transactions solely among the Company and its wholly owned Subsidiaries or solely among the wholly owned 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 Company Securitiescapital stock or other equity 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 PSUsRSUs, and (iii) the acquisition by the Company of Company Options, Options and 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 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, 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) 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 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 for an amount up issue or sell any debt securities or warrants or other rights to $20 million, (B) guarantees or credit support provided by the Company or acquire any of its Subsidiaries of the obligations debt security 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), except (Ci) performance bonds and surety bonds entered into in the ordinary course of business, business consistent with past practice and (Dii) any Indebtedness indebtedness among the Company and its wholly owned Subsidiaries or among the Company’s wholly owned Subsidiaries;
(g) except to the extent required by applicable Law or any Employee Plan in existence as of the date hereof, (i) enter into, adopt, establish, amend or modify in any material respect (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 bonus, or incentive compensation); (ii) increase the compensation of or benefits payable to any director, officer or officer, employee or other individual independent contractor service provider of the Company Groupor any of its Subsidiaries; (iii) take any action to accelerate any payment, vesting, or funding of any compensation or benefits, payable, or to become payable, to any director, officer, employee, or individual service provider of the Company or any of its Subsidiaries; or (iiiiv) hire hire, engage, 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 service provider whose annual base salary or wages (or, in the case of non-employee service providers, equivalent compensation) of cash compensation exceeds $200,000 or less; (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 Schedule 3.18(a); (C) in conjunction with annual renewal or plan design changes for 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; or (D) any bonus payable with respect to the 2022 fiscal year in the ordinary course of business consistent with past practice and in accordance with the terms of the annual bonus plan in effect as of the date of this Agreement and set forth on Schedule 3.18(a) and, in each case, as further modified by Section 5.2(g) of the Company Disclosure Letter150,000;
(h) settle, release, waive waive, or compromise any pending or threatened Legal Proceeding other than (Ax) for an amount equal to or in excess of no more than $1,000,000 individually or $5 million 3,000,000 in the aggregate or (provided no equitable relief has been sought y) on a basis that would result in the imposition of any writ, judgment, decree, settlement, agreement, award, injunction or given)similar order of any Governmental Authority that would restrict the future activity or conduct of Parent, the Company or any of their respective Subsidiaries or a finding or admission of a violation of Law or violation of the rights of any Person, other than with respect to monetary settlements only (Bi) any settlement where the amount paid or to be paid by the Company or any of its Subsidiaries is covered in full by insurance coverage maintained by the Company or any of its Subsidiaries and or (Cii) settlements of any Legal Proceedings for an amount not in excess of 110% 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;
(i) materially change in any material respect 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) make, change or revoke any material Tax election, or ; settle any material Tax claim or assessment; surrender any right to claim a material refund of Taxes; consent to any extension or waiver of any limitation period with respect to any material 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 unless required by LawSubsidiaries; or enter into a closing agreement with any Governmental Authority regarding any material Tax;
(k) (i) incur or commit to incur any capital expenditures other than (i) (x) during fiscal year 2022, amounts not in excess of 110120% of the capital expenditure budget for the fiscal year 2022, in accordance with the capital expenditure budget for fiscal years 2022 and 2023 set forth in Section 5.2(k) of the Company Disclosure Letter (the “Capex Budget”) and (y) during any quarter during fiscal year 2023 2023, amounts not in excess of 110 120% of the applicable corresponding quarterly amounts set forth in the Capex BudgetBudget for fiscal year 2023; or (ii) pursuant fail to obligations imposed by incur or commit to any Material Contract capital or research and development expenditures in effect as of the date of this Agreementamounts and on the time frames set forth in the Capex Budget in all material respects;
(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, terms in the ordinary course of business) any Material Contract (other than with respect to any Material Contract described by the definition set forth in Section 1.1(bbb)(iv) (and not in any other subsection of the definition of Material Contract) in the ordinary course of business consistent with past practice) or otherwise waive, release or assign any material rights, claims or benefits of the Company or any of its Subsidiaries thereunder; provided, that any Material Contract (x) described by the definition set forth in Section 1.1(hhh)(iii1.1(bbb)(iii) shall be exclusively governed by Section 5.2(b5.2(m) and (y) described by the definition set forth in Section 1.1(hhh)(vi1.1(bbb)(v) 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 (or otherwise make any investment) in any Person (including by merger, consolidation or acquisition of stock or assets), other than (i) in or from any wholly owned Subsidiary of the Company, (ii) acquisitions of products and services in the ordinary course of business not pursuant to a merger, consolidation or acquisition of stock or assets or (iii) such acquisitions that do not exceed $5 million 1,000,000 individually or $3,000,000 in the aggregate;
(n) sell, assign, transfer, lease, pledge, cancel or otherwise dispose of, or permit or suffer to exist the creation of any Lien upon, any of the Company’s or its Subsidiaries’ material tangible assets, other than such sales, assignments, transfers leases, pledges, transfers, cancellations or other dispositions that (i) are sales of products and services or dispositions of tangible assets in the ordinary course of business consistent with past practice or (ii) do not have a net book value or fair market value purchase price that exceeds $5 million 1,000,000 individually or $10 million 3,000,000 in the aggregate;
(o) sell, assign, transfer, license, sublicense, abandon, cancel, permit to lapse or enter the public domain, pledge, encumber or otherwise dispose of any Company Intellectual Property, other than (i) the grant of non-exclusive licenses in the ordinary course of business to customers or suppliers on substantially the Company’s standard form of agreement (or an agreement with comparable intellectual property and confidentiality protections), (ii) disclosure of trade secrets pursuant to written confidentiality agreements or to recipients who are bound by professional or fiduciary obligations of non-disclosure, in each case, in the ordinary course of business, or (iii) the expiration of Registered Intellectual Property at the end of their statutory term;
(p) 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 (other than transactions entered into in the ordinary course of business on arms-length terms with portfolio companies affiliated with the Principal Stockholders);
(p) sell, assign, transfer, license, abandon, cancel, permit to lapse or enter the public domain, pledge, encumber or otherwise dispose of any material Company Owned Intellectual Property, other than (x) the grant of non-exclusive licenses in the ordinary course of business, or (y) pledges or encumbrances under the Company Credit Agreement as in effect on the date hereof404;
(q) 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;
(r) 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 businessbusiness consistent with past practice; (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 GroupCompany’s or its Subsidiaries’ policies related thereto; and (iii) loans, advances or capital contributions to, or investments in, any direct or indirect wholly-wholly owned Subsidiaries of the Company; provided that, for the avoidance of doubt, nothing in this Section 5.2(q) shall restrict any acquisitions that are not prohibited by Section 5.2(m);
(r) effectuate or announce any closing, employee layoff, employee furlough, plant closing or other employment action that would reasonably be expected to implicate the Worker Adjustment and Retraining Notification Act of 1988 or any similar applicable Law (iv) in amounts less than $1 million in collectively, the aggregate“WARN Act”);
(s) negotiate, enter into, amend in any material respect, or terminate any collective bargaining agreement Labor Agreement or other labor agreement with a recognize or certify any labor union, labor organization, works council or similar labor organizationgroup of employees as the bargaining representative for any employees of the Company or its Subsidiaries;
(t) adopt waive or implement release any stockholder rights plan noncompetition, nonsolicitation, nondisclosure, noninterference, nondisparagement, or similar arrangement applicable to the Transactions other restrictive covenant obligation of any current or any other transaction consummated pursuant to Parent’s rights under Section 5.3(d)former employee or independent contractor; or
or (u) agree, resolve or commit to take any of the actions prohibited by this Section 5.2.
Appears in 1 contract
Samples: Merger Agreement (Poshmark, Inc.)
Forbearance Covenants. Except (ai) as expressly contemplated permitted by this Agreement, (bii) as set forth in Section 5.2 of the Company Disclosure Letter, (ciii) as required by applicable Law, (d) as necessary in response to COVID-19 and including any COVID-19 Measures, including to (A) protect the health and safety of the Company’s and its Subsidiaries’ employees, suppliers, partners and other individuals having business dealings with the Company and its Subsidiaries or (B) respond to third-party supply or service disruptions caused by COVID-19 or any COVID-19 Measures; provided that the Company has consulted with Parent and considered in good faith any recommendations of Parent or (eiv) as approved by Parent in writing (which approval shall not be unreasonably withheld, conditioned or delayed and shall be deemed given if Parent provides no written response within (x) five (5) Business Days after a written request by the Company for such consent or (y) one (1) Business Day after a written request by the Company for such consent that states that such request is being made in response to an emergency or exigent circumstancedelayed), 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 VIII and the Effective TimePre-Closing Period, the Company shall not, and shall not permit any of its Subsidiaries, to:
(a) amend the Organizational Documents of the Company, Company or any of its Subsidiaries (other than immaterial ministerial changes amendments to the Organizational Documents of any Subsidiary of its Subsidiariesthe Company that would not and would not reasonably be expected to prevent, materially delay or materially impair the consummation of the Transactions);
(b) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, business combination, restructuring, recapitalization or other reorganization;
(c) except for transactions solely among the Company and its wholly owned Subsidiaries or solely among the Company’s wholly owned Subsidiaries, issue, sell, deliver deliver, pledge or agree or commit to issue, sell sell, deliver, encumber or deliver subject to a Lien, or pledge any Company SecuritiesSecurities or Subsidiary Securities (whether through the issuance or granting of options, includingwarrants, for the avoidance of doubtcommitments, subscriptions, rights to purchase or otherwise), including any Company Equity Options or Company RSU Awards, except (i) in accordance with the terms of any employment agreements or arrangements set forth on Schedule 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 Options, Company RSUs Options or Company PSUsRSU Awards, in each case, in accordance with their existing terms in effect on the date of this Agreement or granted or entered into after the date hereof in compliance with this Agreement as described in Section 5.2(g) of the Company Disclosure Letter; and (ii) pursuant to the Company ESPP in accordance with its terms and Section 2.8(e) hereof, in each case, including with respect to the satisfaction of Tax withholding and, with respect to the Company Options, payment of the exercise priceAgreement;
(d) except for transactions solely among the Company and its wholly owned Subsidiaries or solely among the Subsidiaries of the Company’s wholly owned Subsidiaries, adjust, reclassify, split, combine, subdivide or redeem, repurchase, purchase or otherwise acquire or amend the terms of, directly or indirectly, any of its Company Securities or Subsidiary Securities, 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 the exercise price or Tax obligations incurred in connection with the exercise or settlement of Company Options and the vesting and settlement of Company RSUs or Company PSUsRSU Awards, and in each case, in accordance with their existing terms as in effect on the date of this Agreement or (iiiii) the acquisition by the Company of shares of Company Options, Company RSUs and Company PSUs Common Stock in connection with the forfeiture of such awardsCompany Options or Company RSU Awards, in each case case, in accordance with their termsexisting terms in effect on the date of this Agreement;
(e) enter into any new line of business outside the existing business of the Company and its Subsidiaries as of the date of this Agreement;
(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; (iif) 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, Company Securities or Subsidiary Securities, or make any other actual, constructive or deemed distribution in respect of the shares of capital stock or other equity or voting interest, Company Securities or Subsidiary Securities, except for cash dividends or distributions made by any direct or indirect wholly-wholly owned Subsidiary of the Company to the Company or one of its other wholly-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) borrowings in the ordinary course of business under the Company’s credit facilities as in effect on the date hereof for an amount up to $20 million, (B) 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), (C) performance bonds and surety bonds entered into in the ordinary course of business, and (D) any Indebtedness among the Company and its Subsidiaries or among the Company’s Subsidiaries;
(g) (i) enter intoincur, adoptassume, amend guarantee, endorse or modify otherwise become liable or responsible (including accelerating the vesting whether directly, contingently or paymentotherwise), or terminate suffer to exist any Employee Plan or make or grant any award under any Employee Plan indebtedness for borrowed money (including any equity, bonus long-term or incentive compensation); (iishort-term debt) increase the compensation of or issue any director, officer or employee or other individual independent contractor of the Company Group; or (iii) hire or terminate (other than for “cause”) any employee or other individual independent contractor, except, debt securities 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) excess of $200,000 or less; (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 Schedule 3.18(a); (C) in conjunction with annual renewal or plan design changes for Employee Plans (other than severance or separation plans1,000,000, 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; or (D) any bonus payable with respect to the 2022 fiscal year in the ordinary course of business consistent with past practice and in accordance with the terms of the annual bonus plan in effect as of the date of this Agreement and set forth on Schedule 3.18(a) and, in each case, as further modified by Section 5.2(g) of the Company Disclosure Letter;
(h) settle, release, waive or compromise any pending or threatened Legal Proceeding other than except (A) for an amount of no more than $1,000,000 individually or $5 million in the aggregate (provided no equitable relief has been sought or given), (B) 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 (C) settlements of any Legal Proceedings for an amount not in excess of 110% of the amount, if any, reflected or reserved in the balance sheet (or the notes thereto) of the Company;
(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 material Tax claim or assessment; consent to any extension or waiver of any limitation period with respect to any material 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 unless required by Law; or enter into a closing agreement with any Governmental Authority regarding any material Tax;
(k) incur or commit to incur any capital expenditures other than (i) (x) during fiscal year 2022, amounts not in excess of 110% of the capital expenditure budget for the fiscal year 2022, set forth in Section 5.2(k) of the Company Disclosure Letter (the “Capex Budget”) and (y) during fiscal year 2023 amounts not in excess of 110 % of the Capex Budget; or (ii) pursuant to obligations imposed by any Material 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 (other than any Material Contract that has expired in accordance with its terms) any Material Contract except, in each case, trade payables incurred in the ordinary course of business; providedor (B) for intercompany loans, that any Material Contract (x) described by advances or capital contributions to, or investments in the definition set forth in Section 1.1(hhh)(iii) shall be exclusively governed by Section 5.2(b) and (y) described by the definition set forth in Section 1.1(hhh)(vi) shall be exclusively governed by Section 5.2(f);
(m) acquire any interest in any Person Company or any division, assets, properties, businesses direct or equity securities thereof (including by merger, consolidation or acquisition of stock or assets), other than (i) in or from any indirect wholly owned Subsidiary Subsidiaries of the Company, ; (ii) acquisitions of products and services in the ordinary course of business not pursuant to a merger, consolidation or acquisition of stock or assets or (iii) that do not exceed $5 million in the aggregate;
(n) sell, assign, transfer, or otherwise dispose of, any of the Company’s or its Subsidiaries’ material tangible assets, other than such sales, assignments, transfers or other dispositions that (i) sales of products and services or dispositions of tangible assets in the ordinary course of business or (ii) do not have a net book value or fair market value that exceeds $5 million individually or $10 million in the aggregate;
(o) 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 (other than transactions entered into in the ordinary course of business on arms-length terms with portfolio companies affiliated with the Principal Stockholders);
(p) sell, assign, transfer, license, abandon, cancel, permit to lapse or enter the public domain, pledge, encumber or otherwise dispose of any material Company Owned Intellectual Property, other than (x) the grant of non-exclusive licenses in the ordinary course of business, or (y) pledges or encumbrances under the Company Credit Agreement as in effect on the date hereof;
(q) 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;
(r) 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 Group’s policies related thereto; (iii) loans, advances or capital contributions to, or investments in, in any direct or indirect wholly-wholly owned Subsidiaries Subsidiary of the Company; and (iii) mortgage or pledge any assets, tangible or intangible, of the Company or any of its Subsidiaries or create or suffer to exist any Lien thereupon, except for any Permitted Liens; (iv) amend, supplement or otherwise modify the Company Credit Agreement in amounts less than $1 million in any manner that would increase the aggregatecost to Parent, or otherwise impede the ability of Parent, to effectuate the Payoff and Release at Closing or (v) cancel any material indebtedness or material claim or intentionally waive any material claim or rights of the Company or any of its Subsidiaries;
(sh) except as required by the terms of an Employee Plan in effect on the date of this Agreement in accordance with its existing terms, (i) enter into, amend adopt, amend, modify or terminate any Employee Plan (or any plan, program, policy, agreement or arrangement that would be an Employee Plan if in effect as of the date of this Agreement), other than de minimis administrative amendments in the ordinary course of business consistent with past practice to the Employee Plans that provide health or other welfare benefits that do not materially increase the cost or expense of maintaining, or increase the benefits payable under, such Employee Plans, (ii) increase the compensation, bonus, severance, termination pay or other benefits payable to any employee, officer, director or independent contractor, or pay any benefit not provided under any Employee Plan as in effect as of the date of this Agreement, (iii) pay, grant or award, or commit to pay, grant or award, any bonuses or incentive compensation (equity- or cash-based) (provided that the Company may pay annual cash bonuses with respect to the 2022 fiscal year pursuant to the Company Incentive Plan based on actual performance and determined in accordance with the terms and performance criteria set forth in the Company Incentive Plan as in effect for the 2022 fiscal year upon the earlier of (A) when bonuses in respect of such fiscal year would ordinarily be paid or (B) if the Company reasonably determines that the Effective Time will occur prior to the time that such bonuses would ordinarily be paid, at any time prior to the Effective Time, but in no event earlier than February 10, 2023), (iv) accelerate the vesting of, or otherwise deviate from the terms provided in the applicable award agreement with respect to the vesting, payment, settlement or exercisability of, any Company RSU Award or Company Option or other equity-based awards or other compensation, (v) enter into any collective bargaining agreement or other labor similar agreement with a or arrangement 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, (vi) fund or provide any funding for any rabbi trust or similar labor organizationarrangement, (vii) terminate the employment or services of any employee, independent contractor or consultant whose annual base salary or annual base fee is or would be in excess of $200,000 or, in the case of an employee, is at or above the level of Vice President or (viii) hire or engage any employee, independent contractor or consultant whose annual base salary or annual base fee is or would be in excess of $200,000 or, in the case of an employee, is or would be at or above the level of Vice President;
(ti) adopt settle any pending or implement threatened Legal Proceeding, except for the settlement of any stockholder rights plan Legal Proceeding against the Company or similar arrangement applicable to its Subsidiaries (i) that is for solely monetary payments of no more than $100,000 individually and $250,000 in the Transactions aggregate and that does not impose any material non-monetary obligations or equitable relief on, or the admission of wrongdoing by, the Company or its Subsidiaries or, after the Effective Time, Parent or its Subsidiaries or (ii) that is settled in compliance with Section 6.10;
(j) change the Company’s or its Subsidiaries’ methods, procedures, principles or practices of financial accounting or annual accounting period or any of its methods of reporting income, deductions or other transaction consummated pursuant to Parent’s rights under Section 5.3(dmaterial items for financial accounting purposes, except as required by GAAP or Regulation S-X of the Exchange Act (or any interpretation thereof); or;
(uk) agreemake, resolve authorize, incur or commit to take incur any capital expenditures in excess of $200,000, individually or in the actions prohibited by this Section 5.2aggregate, other than consistent with the 2023 Company forecast and key initiatives document in the Excel file entitled “Project Platinum Data Pack_11.
Appears in 1 contract
Forbearance Covenants. Except (a) as expressly contemplated by this Agreement, (b) as set forth in During the Company Disclosure Letter, (c) as required by applicable Law, (d) as necessary in response to COVID-19 and any COVID-19 Measures, including to (A) protect the health and safety of the Company’s and its Subsidiaries’ employees, suppliers, partners and other individuals having business dealings with the Company and its Subsidiaries or (B) respond to thirdPre-party supply or service disruptions caused by COVID-19 or any COVID-19 Measures; provided that the Company has consulted with Parent and considered in good faith any recommendations of Parent or (e) as approved by Parent in writing (which approval shall not be unreasonably withheld, conditioned or delayed and shall be deemed given if Parent provides no written response within (x) five (5) Business Days after a written request by the Company for such consent or (y) one (1) Business Day after a written request by the Company for such consent that states that such request is being made in response to an emergency or exigent circumstance), 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 VIII and the Effective TimeClosing Period, the Company shall will not, and shall will not permit any of its Subsidiaries, to:Subsidiaries to (in each case subject to the Covenant Exceptions):
(a) amend or otherwise change the Organizational Documents of Charter, the Company, Bylaws or any of its Subsidiaries (other than immaterial ministerial changes to the Organizational Documents of any of its Subsidiaries)similar organizational document;
(b) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, conversion, restructuring, recapitalization or other reorganization;
(c) (A) issue, sell, deliver grant, transfer or deliver, or agree or commit to issue, sell sell, grant, transfer or deliver any Company Securities, including, for the avoidance of doubtdeliver, any Company Equity Awardsof its capital stock, except equity or voting interest or other securities (i) in accordance with whether through the terms issuance or granting of any employment agreements options, restricted stock units, warrants, commitments, subscriptions, rights to purchase or arrangements set forth on Schedule 5.2(c)(i) of the Company Disclosure Letter or any award agreements under the Company Stock Plans or otherwise with respect tootherwise), and upon the vesting, exercise or settlement of, Company Options, Company RSUs or Company PSUsexcept, in each case, (i) for the issuance, delivery or sale of (or agreement or commitment to issue, sell or deliver) shares of Company 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 their terms in effect as of the date of this Agreement (as modified by this Agreement); provided, however, that the Company shall not (x) accelerate of vesting, payment or funding under any Company Option or Company RSU other than as may be expressly required by the terms of any applicable Company Benefit Plan, award, agreement or applicable resolutions of the Company Board (or any committee thereof) adopted prior to the date of this Agreement, in each case as in effect on the date of this Agreement or granted or entered into after the date hereof in compliance with this Agreement as described in Section 5.2(g(y) of if the Company Disclosure Letter; and has the right to settle any material Company Benefit Plan or employee benefit agreement, trust, plan, fund or other agreement (ii) pursuant to the Company ESPP in accordance with its terms and Section 2.8(e) hereof, in each case, including with respect to any Company Option or Company RSU) in cash pursuant to the satisfaction of Tax withholding andexpress terms thereof, use reasonable best efforts to consult in good faith with Parent with respect to the settlement such Company OptionsBenefit Plan or employee benefit agreement, payment trust, plan, fund or other agreement in Company equity securities or in cash; (ii) upon the conversion of the exercise price;
(d) except for transactions solely among Company Convertible Notes, the issuance of Company Class A Common Stock, cash or any combination of Company Class A Common Stock and cash pursuant to the terms of the Company and its Subsidiaries or solely among the Subsidiaries Convertible Note Indentures in effect as of the Company, reclassify, split, combine, subdivide or redeem, repurchase, purchase or otherwise acquire or amend the terms of, directly or indirectly, any date of its Company Securities, other than this Agreement; (iiii) the acquisitions in connection with a conversion of shares of Company Class B Common Stock in connection with the surrender of shares of into Company Class A Common Stock by holders pursuant to the terms of Company Options the Charter; (iv) pursuant to agreements in order to pay effect as of the exercise price date of such Company Optionsthis Agreement, (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 including the Company Convertible Notes Indentures and any employee offer letters or similar agreements entered into or extended as of Company Options, Company RSUs and Company PSUs in connection with the forfeiture date of such awardsthis Agreement, in each case in accordance with their termsterms in effect as of the date of this Agreement; (v) to satisfy any obligations under the Company Convertible Notes; or (vi) for the issuance, delivery or sale of (or agreement to issue, sell or deliver) equity securities by any wholly-owned Subsidiary of the Company to the Company or another wholly-owned Subsidiary of the Company; or (vii) as contemplated by Section 5.2(i);
(d) acquire, repurchase or redeem any of its capital stock, equity securities or voting interest or other securities or any rights, warrants or options to acquire any shares of its capital stock, equity or voting interest or other securities, except, in each case, (i) (A) 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 as in effect as of the date of this Agreement or (B) 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 terms of the applicable Company Equity Plan as in effect as of 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; (iii) with respect to securities of wholly owned Subsidiaries of the Company, for transactions between the Company and any of its wholly owned Subsidiaries or among any wholly owned Subsidiaries of the Company or (iv) in connection with Company Capped Call Confirmations;
(e) (i) adjust, split, combine subdivide, combine, recapitalize 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 interestinterests; (ii) declare, accrue, set aside aside, establish a record date for, authorize or pay any dividend or other distribution (whether in cash, shares securities or property or any combination thereof) in respect of any shares of its capital stock or other equity or voting interestinterests or other securities, or make any other actual, constructive or deemed distribution in respect of the shares of its capital stock or other equity or voting interestinterests, except for cash dividends or other distributions 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 of its capital stock or other equity or voting interests (other than Permitted Encumbrances) of the capital stock or other equity or voting interest of the Company or, except for Permitted Encumbrances, of its Subsidiaries; (iv) modify the terms of any of its capital stock or other equity or voting interests; or (v) other than the Voting Agreements, enter into any agreement with respect to the voting of, or requiring the registration of, any shares of its capital stock or other equity or voting interest, or (iv) pledge or encumber any shares of its capital stock interests or other equity or voting interestsecurities;
(f) acquire or agree to acquire (by merger, consolidation or acquisition of stock or assets) any third Person or any material equity interest in such Person, or enter into any material joint venture, legal 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, assume, endorse, guarantee, incur or otherwise become liable for assume any Indebtedness indebtedness for borrowed moneymoney (including receivable financing arrangements) or issue any debt securities, except except, in each case, (A) borrowings short-term debt incurred to fund operations of the business in the ordinary course of business under not in excess of $2,000,000 in the Company’s credit facilities as in effect on the date hereof for an amount up to $20 million, aggregate; (B) guarantees for loans or credit support provided by advances 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) 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 the Company or its Subsidiaries; (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; (B) advances to directors, officers and other employees, in each case in the ordinary course of business; and (C) for loans or advances between wholly-owned Subsidiaries of the obligations Company or between the Company and its Subsidiaries and capital contributions in or to Subsidiaries of the Company; (iv) mortgage, pledge or otherwise encumber any assets, tangible or intangible, or create any Encumbrance thereon (other than Permitted Encumbrances) or (v) or amend, issue or sell any debt securities, instruments or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries (including the Company Convertible Notes), guarantee any debt securities or instruments of another Person (other than pursuant to agreements or instruments in effect prior to the extent such Indebtedness is in existence on the date execution of this Agreement or incurred in compliance with this Section 5.2(fAgreement, including the Company Senior Notes Indenture), (C) performance bonds and surety bonds entered enter into in any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the ordinary course economic effect of business, and (D) any Indebtedness among of the Company and its Subsidiaries or among the Company’s Subsidiariesforegoing;
(gi) except (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); (ii) increase the compensation of any director, officer or employee or other individual independent contractor of the Company Group; 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)order to comply with applicable Law, (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; (B) as required pursuant to the extent required by applicable Law or pursuant to terms of any Employee Company Benefit Plan in effect on the date of this Agreement or (iii) as provided in Section 5.2(i) of the Company Disclosure Letter, (A) establish, adopt, enter into, terminate or amend in any material respect 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), 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 base cash compensation would (x) exceed $225,000 after such increase and set forth on Schedule 3.18(a)(y) increase by more than 7% after such increase, any increase in cash compensation, bonus, incentive or material fringe or other material benefits; (C) grant to any Service Provider any increase in conjunction with annual renewal or plan design changes for Employee Plans (other than severance or separation planschange in control, bonus or other incentive plans or retention, severance, stay bonus, tax gross-up, special remuneration, equity or equity-based awardsaward, plans and agreementsbonus or termination pay, other than payments made pursuant to agreements in effect on the date of this Agreement; (D) that are made enter into any employment, consulting, change in control, retention, severance, stay bonus, tax gross-up, special remuneration, equity or equity-based award, bonus or termination agreement with any Service Provider, other than in the ordinary course of business and do in connection with the hiring or engagement of new Service Providers whose annual base cash compensation does not materially increase the cost exceed $225,000; (E) make or forgive any loans to the Company and its Subsidiaries; any Service Provider (other than salary, commission or (D) any bonus payable with respect to the 2022 fiscal year other advances in the ordinary course of business consistent with past practice and in accordance with the terms of the practice), or (F) terminate any Service Provider whose annual bonus plan in effect as of the date of this Agreement and set forth on Schedule 3.18(a) andbase cash compensation exceeds $225,000, in each case, as further modified by Section 5.2(g) of the Company Disclosure Letterother than terminations for cause;
(hj) enter into, terminate or amend any Labor Agreement;
(k) settle, release, waive or compromise any pending or threatened material Legal Proceeding, except for the settlement of any Legal Proceeding (i) involving payment by the Company (net of any reasonably anticipated insurance proceeds) of $750,000 individually, or $3,000,000 in the aggregate, and for no material non-monetary relief or (ii) settled in compliance with Section 6.15;
(l) commence any litigation or material Legal Proceeding other than (Ai) for as a result of a Legal Proceeding commenced against an amount of no more than $1,000,000 individually or $5 million in the aggregate (provided no equitable relief has been sought or given), (B) any settlement where the amount paid or to be paid by the Acquired Company or any of its Subsidiaries is covered by insurance coverage maintained by the Company or any of its Subsidiaries and (Cii) settlements of any Legal Proceedings for an amount not in excess of 110% of among the amountParties or their respective Affiliates, if any, reflected or reserved in with the balance sheet (parties to the Equity Commitment Letters or the notes thereto) of Guarantees, related to this Agreement, the CompanyTransaction Documents or the Merger;
(im) materially change the Company’s or its Subsidiaries’ methods, principles or practices of financial accounting or annual accounting period, except as required by applicable Law or GAAP, Regulation S(i) other than in the ordinary course of business, revalue in any material respect any of its properties or assets, including writing-X off notes or accounts receivable; or (ii) make any change in any of the Exchange Act (its accounting principles or any interpretation thereof), or by any Governmental Authority or applicable Lawpractices;
(jn) (i) make, change or revoke any material Tax election (other than periodic elections made in the ordinary course of business); (ii) adopt or change any material method of Tax election, accounting; (iii) settle or settle compromise any material Tax claim or assessmentassessment or surrender any claim for a refund of Taxes; (iv) enter into any “closing agreement” as described in Section 7121 of the Code (or any comparable or similar provisions of applicable Laws) with respect to any material Taxes; (v) enter into or initiate any voluntary disclosure agreements which could result in any material Tax liability; (vi) amend, refile, modify or otherwise change any previously filed material Tax Return; (vii) fail to pay any material Tax that becomes due and payable except to the extent such Tax is contested in good faith; or (viii) consent to any extension or waiver of any limitation period with respect to any material Tax claim or assessment; file an amended Tax Return that could reasonably be expected to materially increase assessment (other than extensions obtained in the Taxes payable by the Company or its Subsidiaries unless required by Law; or enter into a closing agreement with any Governmental Authority regarding any material Taxordinary course of business);
(ko) incur (i) incur, authorize or commit to incur any material capital expenditures other than (iA) (x) during fiscal year 2022, amounts not consistent in excess of 110% of all material respects with the capital expenditure budget for the fiscal year 2022, set forth in Section 5.2(k5.2(o) of the Company Disclosure Letter Letter; (the “Capex Budget”) and (y) during fiscal year 2023 amounts not in excess of 110 % of the Capex Budget; or (iiB) pursuant to obligations imposed by Material Contracts or Leases; or (C) pursuant to agreements in effect prior to the date of this Agreement; (ii) modify, amend or terminate any Material Contract, or enter into any Contract that would be a Material Contract had it been in effect as of the date of this the Agreement;
(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 casecase if such modification, amendment, termination or entry would, individually or in the ordinary course of businessaggregate, be materially adverse to the Acquired Companies, taken as a whole; provided, that any Material Contract (x) described by the definition set forth in Section 1.1(hhh)(iii) shall be exclusively governed by Section 5.2(b) and (y) described by the definition set forth in Section 1.1(hhh)(vi) 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 (including by merger, consolidation or acquisition of stock or assets), other than (i) in or from any wholly owned Subsidiary of the Company, (ii) acquisitions of products and services in the ordinary course of business not pursuant to a merger, consolidation or acquisition of stock or assets or (iii) that do not exceed $5 million in the aggregate;
(n) sell, assign, transfer, maintain insurance at less than current levels or otherwise dispose of, any of the Company’s or its Subsidiaries’ material tangible assets, other than such sales, assignments, transfers or other dispositions that in a manner inconsistent with past practice; (i) sales of products and services or dispositions of tangible assets in the ordinary course of business or (ii) do not have a net book value or fair market value that exceeds $5 million individually or $10 million in the aggregate;
(oiv) 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 404 404; or (other than transactions entered into v) effectuate a “plant closing” or “mass layoff” (each as defined in the ordinary course of business on arms-length terms with portfolio companies affiliated with the Principal Stockholders);
(pUnited States Worker Adjustment and Retraining Notification Act) sell, assign, transfer, license, abandon, cancel, permit to lapse or enter the public domain, pledge, encumber or otherwise dispose of any material Company Owned Intellectual Property, other than (x) the grant of non-exclusive licenses in the ordinary course of business, or (y) pledges or encumbrances under the Company Credit Agreement as in effect on the date hereof;
(q) 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 employee;
(p) except to the extent necessary to preserve enforceability of a Contract, in the ordinary course of business or as otherwise required by applicable Law, knowingly and affirmatively waive or release any noncompetition, nonsolicitation, nondisclosure, noninterference or nondisparagement covenant of any Service Provider that would result in liability is material to the Company;
(q) knowingly abandon, let lapse or cancel any material Company Registered Intellectual Property, except contemplated by Section 3.16(a) of the Company Group under WARNDisclosure Letter;
(r) make disclose or abandon any loans, advances or capital contributions to, or investments in, any other Personmaterial Trade Secrets, except for (i) extensions of credit to customers in the ordinary course of business, or to the extent not economically desirable to maintain for the conduct of the business of the Company and its Subsidiaries, or disclose any source code for any Company Software to any Person except to a Service Provider or vendor obligated in writing to (i) maintain the confidentiality of, and not disclose, such source code; and (ii) advances use such source code only in the provision of services to directorsthe 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 Data, officers except to remediate any privacy or security issue to comply with applicable Privacy and other employees for travel Data Security Requirements (provided that in the case of Privacy and other business-related expensesData Security Requirements that consist of contractual obligations, any such contractual obligations entered into after the date of this Agreement must be entered into in each case accordance with the terms of this Agreement and 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 capital contributions tobusiness), or investments in, any direct as otherwise directed or indirect wholly-owned Subsidiaries of the Company; and (iv) in amounts less than $1 million in the aggregate;
(s) enter into, amend or terminate any collective bargaining agreement or other labor agreement with required by a labor union, works council or similar labor organizationGovernmental Authority;
(t) adopt or implement any stockholder rights plan or similar arrangement applicable to the Transactions or any other transaction consummated pursuant to Parent’s rights under Section 5.3(d)arrangement; or
(u) agreeenter into, resolve or agree or commit to enter into, a Contract to take any of the actions prohibited by this Section 5.2.
Appears in 1 contract
Samples: Merger Agreement (Alteryx, Inc.)
Forbearance Covenants. Except (a) as expressly contemplated by this Agreement, (bi) as set forth in Section 5.2 of the Company Disclosure Letter, ; (c) as required by applicable Law, (d) as necessary in response to COVID-19 and any COVID-19 Measures, including to (A) protect the health and safety of the Company’s and its Subsidiaries’ employees, suppliers, partners and other individuals having business dealings with the Company and its Subsidiaries or (B) respond to third-party supply or service disruptions caused by COVID-19 or any COVID-19 Measures; provided that the Company has consulted with Parent and considered in good faith any recommendations of Parent or (eii) as approved by Parent in writing (which approval shall will not be unreasonably withheld, conditioned or delayed and shall be deemed given if Parent provides no written response within delayed); (xiii) five for actions or omissions that constitute COVID-19 Measures (5following reasonable prior consultation with Parent); (iv) Business Days after a written request as expressly contemplated by the Company for such consent terms of this Agreement; or (yv) one (1) Business Day after a written request as required by applicable Law or the regulations or requirements of any stock exchange or regulatory organization applicable to the Company for such consent that states that such request is being made in response to an emergency or exigent circumstance)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 VIII and the Effective Time, the Company shall will not, and shall will not permit any of its SubsidiariesSubsidiaries (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, and to cause its Subsidiaries (other than the Specified JV Entities) not to, actively permit, authorize or consent 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) amend or otherwise change the Organizational Documents of Charter, the Bylaws or any other similar organizational document, other than, with respect to the Company’s wholly owned Subsidiaries, any immaterial or any of its Subsidiaries (other than immaterial ministerial changes to the Organizational Documents of any of its Subsidiaries)amendments thereto;
(b) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization;
(c) issue, sell, deliver or agree or commit to issue, sell or deliver any Company Securities, including, for the avoidance of doubt, any Company Equity Awards, except (i) in accordance with the terms of any employment agreements or arrangements set forth on Schedule 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 Options, Company RSUs or Company PSUs, in each case, in effect on the date of this Agreement or granted or entered into after the date hereof in compliance with this Agreement as described in Section 5.2(g) of the Company Disclosure Letter; and (ii) pursuant to the Company ESPP in accordance with its terms and Section 2.8(e) hereof, in each case, including with respect to the satisfaction of Tax withholding and, with respect to the Company Options, payment of the exercise price;
(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 Company Securities, 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 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, 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) 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 for an amount up to $20 million, (B) 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), (C) performance bonds and surety bonds entered into in the ordinary course of business, and (D) any Indebtedness among the Company and its Subsidiaries or among the Company’s Subsidiaries;
(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); (ii) increase the compensation of any director, officer or employee or other individual independent contractor of the Company Group; 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; (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 Schedule 3.18(a); (C) in conjunction with annual renewal or plan design changes for 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; or (D) any bonus payable with respect to the 2022 fiscal year in the ordinary course of business consistent with past practice and in accordance with the terms of the annual bonus plan in effect as of the date of this Agreement and set forth on Schedule 3.18(a) and, in each case, as further modified by Section 5.2(g) of the Company Disclosure Letter;
(h) settle, release, waive or compromise any pending or threatened Legal Proceeding other than (A) for an amount of no more than $1,000,000 individually or $5 million in the aggregate (provided no equitable relief has been sought or given), (B) 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 (C) settlements of any Legal Proceedings for an amount not in excess of 110% of the amount, if any, reflected or reserved in the balance sheet (or the notes thereto) of the Company;
(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 material Tax claim or assessment; consent to any extension or waiver of any limitation period with respect to any material 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 unless required by Law; or enter into a closing agreement with any Governmental Authority regarding any material Tax;
(k) incur or commit to incur any capital expenditures other than (i) (x) during fiscal year 2022, amounts not in excess of 110% of the capital expenditure budget for the fiscal year 2022, set forth in Section 5.2(k) of the Company Disclosure Letter (the “Capex Budget”) and (y) during fiscal year 2023 amounts not in excess of 110 % of the Capex Budget; or (ii) pursuant to obligations imposed by any Material 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 (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(hhh)(iii) shall be exclusively governed by Section 5.2(b) and (y) described by the definition set forth in Section 1.1(hhh)(vi) 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 (including by merger, consolidation or acquisition of stock or assets), other than (i) in or from any wholly owned Subsidiary of the Company, (ii) acquisitions of products and services in the ordinary course of business not pursuant to a merger, consolidation or acquisition of stock or assets or (iii) that do not exceed $5 million in the aggregate;
(n) sell, assign, transfer, or otherwise dispose of, any of the Company’s or its Subsidiaries’ material tangible assets, other than such sales, assignments, transfers or other dispositions that (i) sales of products and services or dispositions of tangible assets in the ordinary course of business or (ii) do not have a net book value or fair market value that exceeds $5 million individually or $10 million in the aggregate;
(o) 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 (other than transactions entered into in the ordinary course of business on arms-length terms with portfolio companies affiliated with the Principal Stockholders);
(p) sell, assign, transfer, license, abandon, cancel, permit to lapse or enter the public domain, pledge, encumber or otherwise dispose of any material Company Owned Intellectual Property, other than (x) the grant of non-exclusive licenses in the ordinary course of business, or (y) pledges or encumbrances under the Company Credit Agreement as in effect on the date hereof;
(q) 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;
(r) 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 Group’s policies related thereto; (iii) loans, advances or capital contributions to, or investments in, any direct or indirect wholly-owned Subsidiaries of the Company; and (iv) in amounts less than $1 million in the aggregate;
(s) enter into, amend or terminate any collective bargaining agreement or other labor agreement with a labor union, works council or similar labor organization;
(t) adopt or implement any stockholder rights plan or similar arrangement applicable to the Transactions or any other transaction consummated pursuant to Parent’s rights under Section 5.3(d); or
(u) agree, resolve or commit to take any of the actions prohibited by this Section 5.2.
Appears in 1 contract
Forbearance Covenants. Except (aA) as expressly contemplated or required by this Agreement, (bB) as set forth in Section 5.2 of the Company Disclosure Letter, (cC) as required by applicable Law, (dD) as necessary in response to COVID-19 and any COVID-19 Measures, including to (A) protect the health and safety of the Company’s and its Subsidiaries’ employees, suppliers, partners and other individuals having business dealings with the Company and its Subsidiaries Measures or (B) respond to third-party supply or service disruptions caused by COVID-19 or any COVID-19 Measures; provided that the Company has consulted with Parent and considered in good faith any recommendations of Parent or (eE) as approved in advance by Parent in writing (which approval shall not be unreasonably withheld, conditioned or delayed and shall be deemed given not provided if Parent provides no written response within seven (x) five (57) Business Days after a written request by the Company for such consent or (y) one (1) Business Day after a written request by the Company for such consent that states that such request is being made in response to an emergency or exigent circumstanceconsent), 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 VIII and the Effective TimeInterim Period, the Company shall not, and shall not permit any of its Subsidiaries, to:to (whether directly or indirectly):
(a) amend or repeal the Organizational Documents of the Company, Company or any of its Subsidiaries (other than immaterial ministerial 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, including, for the avoidance of doubt, any Company Equity Awards, except (i) in accordance with the terms of any employment agreements or arrangements set forth on Schedule 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 vesting or settlement of, Company OptionsRSUs, Company RSUs MSUs or Company PSUs, in each case, in effect outstanding on the date of this Agreement or granted or entered into after the date hereof in compliance with this Agreement as described in Section 5.2(g) of the Company Disclosure Letter; and (ii) pursuant to the Company ESPP in accordance with its their terms and Section 2.8(e) as in effect on the date hereof, in each case, including with respect to the satisfaction of Tax withholding and, with respect to the Company Options, payment of the exercise price;
(d) except for transactions solely among the Company and its wholly-owned Subsidiaries or solely among the wholly-owned Subsidiaries of the Company, adjust, reclassify, split, combine, subdivide or redeem, repurchase, purchase or otherwise acquire or amend the terms of, directly or indirectly, any of its Company Securitiescapital stock or other equity 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 RSUs, Company MSUs or Company PSUs, and (iiiii) the acquisition by the Company of Company OptionsRSUs, Company RSUs and MSUs or Company PSUs in connection with the forfeiture of such awards, in each case in accordance with their termsterms as in effect on the date of this Agreement;
(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 including, for the avoidance of doubt, any distributions in accordance with Section 4.1(a)(1) of the Holdings LLC Agreement (in each case, 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 except for dividends or other equity or voting interest, except for cash dividends distributions made by any direct or indirect wholly-owned Subsidiary of the Company to the Company or one of its other wholly-owned Subsidiaries; , (iiiii) modify the terms of any shares of its capital stock or other equity or voting interest, interest or (iviii) pledge or encumber any shares of its capital stock or other equity or voting interest;
(f) (i) incur, assume, settle, prepay (other than in the ordinary course of business) endorse, guarantee, or otherwise become liable for any Indebtedness for borrowed money, except (Ai) revolving borrowings in the ordinary course of business for working capital purposes under the Company’s credit facilities as in effect on the date hereof for an amount up to $20 millionin a manner consistent with past practices, (Bii) 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), (Ciii) performance bonds and surety bonds entered into in the ordinary course of business, business and (Div) any Indebtedness among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries;
(g) grant or permit to exist, any material Lien (other than Permitted Liens) on any assets or properties of the Company and its Subsidiaries;
(i) enter into, adopt, amend or amend, modify (including accelerating the vesting or paymentvesting), or terminate any Employee Plan or make or grant any award under any material Employee Plan (including or any equityplan, bonus program, policy or incentive compensation)agreement that would be a material Employee Plan if in effect on the date of this Agreement) or accelerate any compensation or benefits of any current or former director, officer, employee, non-employee service provider or individual independent contractor; or (ii) increase or change the benefits or compensation payable or paid, whether conditionally or otherwise, of or to any current or former director, officer officer, employee, or employee or other individual independent contractor of the Company Group; or (iii) hire or terminate (other than for “cause”) any increase in annual base salary or annual wage rate and commensurate increases in target annual bonus opportunities adopted in the ordinary course of business in respect of any non-officer employee or other individual service provider whose annual base salary or annual wage rate does not exceed $250,000 after giving effect to such increase), or pay or commit to pay any retention, stay, transaction or similar bonus or compensation to any such director, officer, employee, non-employee service provider or individual independent contractor, except, in the case of each of clauses (i) or (ii), (ii) and (iii), as applicable (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; (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 Schedule 3.18(a)the Company Disclosure Letter; (CB) in conjunction with annual renewal or plan design changes for broad-based health and welfare 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 result in material additional cost to the Company and its SubsidiariesCompany; or (DC) any bonus payable 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 respect to the 2022 fiscal year new hires in the ordinary course of business consistent and whose annual base salary or annual wage rate is less than $250,000; provided that any such offer letter or employment agreement does not provide for severance payments (unless otherwise required by Law with past practice and in accordance with the terms respect to an employee located outside of the annual bonus plan United States), notice periods in effect as excess of thirty (30) days (unless otherwise required by Law with respect to an employee located outside of the date United States), equity grants or any retention bonuses;
(i) hire or engage, or terminate (other than for cause) any employee or individual independent contractor with an annual base compensation in excess of this Agreement and set forth on Schedule 3.18(a$250,000;
(j) andnegotiate, in each caseenter into, amend or extend any collective bargaining agreement or similar Contract with a Union or recognize or certify any Union as further modified by Section 5.2(g) the bargaining representative for any employees of the Company Disclosure Letteror any of its Subsidiaries;
(hk) implement any layoffs affecting, place on unpaid leave or furlough, or materially reduce the hours or weekly pay of, fifty (50) or more employees, or take any other action that would require notice under the federal Worker Adjustment and Retraining Notification Act or any similar foreign, state or local Law;
(l) settle, release, waive or compromise any pending or threatened Legal Proceeding for an amount in excess of $2,000,000 individually or $5,000,000 in the aggregate other than (A) for an amount of no more than $1,000,000 individually or $5 million in the aggregate (provided no equitable relief has been sought or given), (Bi) 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 (Cii) settlements of any Legal Proceedings for an amount not in excess of 110% of the amount, if any, reflected or reserved in the balance sheet (or the notes thereto) of the Company;
(im) 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;
(jn) other than where such action is required by Law, (A) change or revoke any material Tax election; (B) change any annual Tax accounting period or material method of Tax accounting, or settle (C) amend any material Tax Return, (D) settle or compromise any material claim or assessment; consent related to Taxes for an amount materially in excess of amounts reserved, (E) enter into any extension or waiver of any limitation period material closing agreement with respect to Taxes, or (F) surrender any right to claim a material Tax claim or assessment; file refund for an amended Tax Return that could reasonably be expected to amount materially increase the Taxes payable by the Company or its Subsidiaries unless required by Law; or enter into a closing agreement with any Governmental Authority regarding any material Taxin excess of amounts reserved;
(ko) incur or commit to incur any capital expenditures other than (i) (x) during fiscal year 2022, amounts not in excess of 110% of the capital expenditure budget for the fiscal year 2022, as set forth in Section 5.2(k5.2(p) of the Company Disclosure Letter (the “Capex Budget”) and (y) during fiscal year 2023 amounts not in excess of 110 % of the Capex BudgetLetter; or (ii) pursuant to obligations imposed by any Material Contract expenditures that do not exceed $1,000,000 individually or $5,000,000 in effect as of the date of this Agreementaggregate;
(lp) sell, assign, transfer, lease, license, encumber, abandon or permit to lapse any Company Registered Intellectual Property or other material Company Intellectual Property, other than Permitted Liens or expirations of Registered Intellectual Property at the end of the applicable statutory term;
(q) enter into, modify or in any material respect, modify, amend in or waive any material respect rights under, 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, provided that any Material Contract (x) described by the definition set forth in Section 1.1(hhh)(iii1.1(qqq)(ii) shall be exclusively governed by Section 5.2(b5.2(s) and (y) described by the definition set forth in Section 1.1(hhh)(vi1.1(qqq)(v) shall be exclusively governed by Section 5.2(f);
(mr) acquire any interest in any Person or any division, assets, properties, businesses or equity securities thereof in (or otherwise make an investment in) any Person (including by merger, consolidation or acquisition of stock or assets), other than (i) in or from any wholly owned Subsidiary of the Company, Company (ii) acquisitions of products and services assets in the ordinary course of business not pursuant to a merger, consolidation or acquisition of stock or assets or (iii) that do not exceed $5 million 10,000,000 in the aggregate;
(ni) sell, lease, transfer, abandon, exclusively license, assign or otherwise dispose of any real property, in each case other than in the ordinary course of business; or (ii) acquire any real property or interests therein (whether by purchase, lease or otherwise);
(t) sell, assign, transfer, or otherwise dispose of, any of the Company’s or its Subsidiaries’ material tangible assets, other than Company Intellectual Property and other than such sales, assignments, transfers or other dispositions that (i) sales of products and services or dispositions of tangible assets are in the ordinary course of business or (ii) do not have a net book value or fair market value purchase price that exceeds $5 million individually or $10 million 10,000,000 in the aggregate;
(ou) make any loans, advances or capital contributions to, 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; (iii) loans, advances or capital contributions to, any direct or indirect wholly owned Subsidiaries of the Company; and (iv) if not otherwise covered by clauses (i), (ii) or (iii), in amounts less than $250,000 in the aggregate outstanding at any given time;
(v) amend, cancel, fail to renew, or renew for less coverage, any insurance policies of the Company or its Subsidiaries that are set forth on Section 5.2(v) of the Company Disclosure Letter;
(w) amend the terms of that certain Tax Receivable Agreement, dated as of July 27, 2021, by and among the Company, Holdings and the other parties thereto, except as set forth in the TRA Amendment;
(x) 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 (other than transactions entered into in the ordinary course of business consistent with past practice on arms-length terms with portfolio companies affiliated with the Principal Stockholders);
(p) sell, assign, transfer, license, abandon, cancel, permit to lapse or enter the public domain, pledge, encumber or otherwise dispose of any material Company Owned Intellectual Property, other than (x) the grant of non-exclusive licenses in the ordinary course of business, or (y) pledges or encumbrances under the Company Credit Agreement as in effect on the date hereof;
(q) 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;
(r) 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 Group’s policies related thereto; (iii) loans, advances or capital contributions to, or investments in, any direct or indirect wholly-owned Subsidiaries of the Company; and (iv) in amounts less than $1 million in the aggregate;
(s) enter into, amend or terminate any collective bargaining agreement or other labor agreement with a labor union, works council or similar labor organization;
(t) adopt or implement any stockholder rights plan or similar arrangement applicable to the Transactions or any other transaction consummated pursuant to Parent’s rights under Section 5.3(d); or
(uy) agree, resolve or commit to take any of the actions prohibited by this Section 5.2. For purposes of this Section 5.2 (and the definitions contained herein), references to the Company and its Subsidiaries shall be deemed to include Severin Topco LLC.
Appears in 1 contract
Forbearance Covenants. Except (a) as expressly contemplated by this Agreement, (bi) as set forth in Section 5.2 of the Company Disclosure Letter, ; (c) as required by applicable Law, (d) as necessary in response to COVID-19 and any COVID-19 Measures, including to (A) protect the health and safety of the Company’s and its Subsidiaries’ employees, suppliers, partners and other individuals having business dealings with the Company and its Subsidiaries or (B) respond to third-party supply or service disruptions caused by COVID-19 or any COVID-19 Measures; provided that the Company has consulted with Parent and considered in good faith any recommendations of Parent or (eii) as approved by Parent in writing (which approval shall will not be unreasonably withheld, conditioned or delayed and shall be deemed given if Parent provides no written response within delayed); (xiii) five (5) Business Days after a written request as expressly contemplated by the Company terms of this Agreement, (for such consent the avoidance of doubt, excluding the proviso in Section 5.1), or (yiv) one (1) Business Day after a written request as required by the Company for such consent that states that such request is being made in response to an emergency or exigent circumstance)applicable 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 VIII and the Effective Time, the Company shall will not, and shall will not permit any of its Subsidiaries, to:
(a) amend the Organizational Documents of Charter, the Company, Bylaws or any of its Subsidiaries (other than immaterial ministerial changes to the Organizational Documents of any of its Subsidiaries)similar organizational document;
(b) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization;
(c) issue, sell, deliver or agree 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 cash based on the value of Company Securities, including, for the avoidance of doubt, any Company Equity Awards), except (iA) in accordance with for the terms issuance or sale of any employment agreements or arrangements set forth on Schedule 5.2(c)(i) shares of the Company Disclosure Letter or any award agreements under the Common Stock pursuant to Company Stock Plans or otherwise with respect to, and upon the vesting, exercise or settlement ofOptions, Company OptionsStock-Settled Bonus Plan awards, Company RSUs or Company PSUs, PSUs outstanding as of the Capitalization Date in each case, accordance with their terms as of the date hereof or pursuant to the ESPP in accordance with its terms (as modified by Section 2.8(e) and Section 2.8(a)); (B) in connection with agreements in effect on the date hereof or otherwise permitted pursuant to Section 5.2(j); or (C) as contemplated by Section 5.2(j); provided, however, that the Company shall not (x) permit the acceleration of vesting, payment or funding under any Company Option, Company RSU, Company Stock-Settled Bonus Plan, or Company PSU other than as may be expressly required by the terms of the applicable Employee Plan, award or applicable resolutions of the Company Board adopted on the date of this Agreement or granted or entered into after (which have been furnished to Parent’s counsel), in each case as in effect on the date hereof in compliance with this Agreement as described in Section 5.2(gor (y) of if the Company Disclosure Letter; and has the right to settle any Employee Plan or employee benefit agreement, trust, plan, fund or other agreement (ii) pursuant to the Company ESPP in accordance with its terms and Section 2.8(e) hereof, in each case, including with respect to the satisfaction any Company Option, Company Stock-Settled Bonus Plan, Company RSU, or Company PSU) in cash, settle such Employee Plan or employee benefit agreement, trust, plan, fund or other agreement in Company Securities instead of Tax withholding and, with respect to the Company Options, payment of the exercise pricecash;
(d) directly or indirectly acquire, repurchase or redeem any securities, except for transactions solely among (A) repurchases, withholdings, or cancellations of Company Securities pursuant to the terms and conditions of Company and its Subsidiaries Options, Company Stock-Settled Bonus Plan awards, Company RSUs or solely among the Subsidiaries Company PSUs outstanding as of the Company, reclassify, split, combine, subdivide or redeem, repurchase, purchase or otherwise acquire or amend date hereof in accordance with their terms as of the terms of, directly or indirectly, any of its Company Securities, other than date hereof (i) the including acquisitions of shares of Company Common Stock in connection with the surrender of shares of Company Common Stock tendered by holders of Company Options Options, Company Stock-Settled Bonus Plan awards, ESPP entitlements, Company RSUs or Company PSUs in order to satisfy obligations to pay the exercise price of such Company Optionsand/or Tax withholding obligation with respect thereto), or (iiB) 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 transactions between the Company and any of Company Options, Company RSUs and Company PSUs in connection with the forfeiture of such awards, in each case in accordance with their termsits direct or indirect Subsidiaries;
(e) (iA) 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; (iiB) 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, 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-wholly owned Subsidiary of the Company to the Company or one of its other wholly-wholly owned Subsidiaries; or (iiiC) 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) (iA) incur, assume, endorse, guarantee, assume or otherwise become liable for suffer any Indebtedness for borrowed money(including any long-term or short-term debt) or issue any debt securities, except (A1) borrowings in the ordinary course of business under the Company’s credit facilities as in effect on the date hereof for an amount up to $20 million, (B) 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 trade payables incurred in compliance with this Section 5.2(f), (C) performance bonds and surety bonds entered into in the ordinary course of business, ; (2) obligations incurred pursuant to business credit cards in the ordinary course of business; and (D3) any Indebtedness intercompany loans or advances between or among the Company and and/or its direct or indirect wholly-owned Subsidiaries; or (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 direct or indirect wholly owned Subsidiaries or among of the Company’s Subsidiaries;
(g) (i) enter intomortgage or pledge any of its and its Subsidiaries’ assets, adopt, amend tangible or modify (including accelerating the vesting or payment)intangible, or terminate create or suffer to exist any Employee Plan or make or grant any award under any Employee Plan (including any equity, bonus or incentive compensation); (ii) increase the compensation of any director, officer or employee or other individual independent contractor of the Company Group; or (iii) hire or terminate lien thereupon (other than for “cause”) any employee or other individual independent contractor, except, in the case of each of clauses (iPermitted Liens), other than in connection with financing transactions permitted by Section 5.2(f) or consented to by Parent;
(iih) and make any loans, advances or capital contributions to, or investments in, any other Person, except for (iii), (A1) extensions of credit to customers in the ordinary course of business with respect business; (2) advances to Persons eligible to earn an annual base salary or wages (ordirectors, officers and other employees for travel and other business-related expenses, in the each case of non-employee service providers, equivalent compensation) of $200,000 or less; (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 Schedule 3.18(a); (C) in conjunction with annual renewal or plan design changes for 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 in compliance in all material respects with the cost to 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) lease, exclusively 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, other than (1) the sale, lease or licensing of products or services of the Company and its SubsidiariesGroup or other materials embodying Company Intellectual Property in the ordinary course of business; (2) the 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; (D3) any bonus payable with respect to the 2022 fiscal year abandonment of trade secrets in the ordinary course of business consistent with past practice reasonable business practices; and in accordance with (4) any capital expenditures permitted by (or consented to by Parent) under Section 5.2(n);
(A) enter into, adopt, amend (including accelerating the terms vesting, payment or funding or waiving any right of the annual Company Group with respect to), modify or terminate any bonus, profit sharing, compensation, commission, severance, termination, option, restricted stock unit, 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 or employee of the Company Group in any manner; (B) materially 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 plan or special remuneration to any director, officer, employee, individual consultant, former employee, individual independent contractor, or 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 or waive any right of the Company Group with respect to) 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 or award in effect as of the date hereof; (2) in connection with any new hires or any promotion of employees of the Company Group in the ordinary course of business and consistent with past practice; or (3) for increases in compensation for employees of the Company Group 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 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 Group; provided, however, that the Company shall not permit the acceleration of vesting, payment or funding under any Employee Plan or employee benefit agreement, trust, plan, fund or other agreement (including with respect to any Company Option, Company RSU, or Company PSU) other than as may be expressly required by the terms of the applicable Employee Plan, award or applicable resolutions of the Company Board adopted on the date of this Agreement and set forth on Schedule 3.18(a) and(which have been furnished to Parent’s counsel), in each case, in effect as further modified by Section 5.2(g) of the Company Disclosure Letterdate hereof;
(hk) settle, release, waive or compromise any pending or threatened material Legal Proceeding other than Proceeding, except for the settlement of any Legal Proceedings that is (A) reflected or reserved against in the Audited Company Balance Sheet; (B) for an amount solely monetary payments of no more than $1,000,000 500,000 individually or and $5 million 1,500,000 in the aggregate (provided no equitable relief has been sought aggregate; or given), (B) 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 (C) settlements of any Legal Proceedings for an amount not settled in excess of 110% of the amount, if any, reflected or reserved in the balance sheet (or the notes thereto) of the Companycompliance with Section 6.15;
(il) materially change the Company’s or its Subsidiaries’ methods, principles or practices of financial accounting or annual accounting period, except as required by applicable law or GAAP, Regulation S(A) revalue in any material respect any of its properties or assets, including writing-X off notes or accounts receivable, other than in the ordinary course of the Exchange Act business; or (B) make any material change in any of its accounting principles or any interpretation thereof), or by any Governmental Authority or applicable Lawpractices;
(jA) other than in the ordinary course of business, make or change any material Tax election; (B) settle, consent to or settle compromise any material Tax claim or assessmentassessment 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 reasonably be expected to materially increase the Taxes payable by the Company or its Subsidiaries unless required by LawSubsidiaries; or (E) enter into a closing agreement with any Governmental Authority regarding any material Tax;
(kn) incur or commit to incur any capital expenditure(s) to the extent that such capital expenditures other than exceed $200,000 individually or $500,000 in the aggregate (i) (x) during fiscal year 2022, amounts not or $750,000 in excess of 110% of the capital expenditure budget for aggregate if the fiscal year 2022, set forth Termination Date is extended pursuant to the proviso in Section 5.2(k) of the Company Disclosure Letter (the “Capex Budget”) and (y) during fiscal year 2023 amounts not in excess of 110 % of the Capex Budget; or (ii) pursuant to obligations imposed by any Material Contract in effect as of the date of this Agreement8.1(c));
(lo) enter into, modify in any material respectmodify, amend in or agree to terminate any material respect or terminate (a) Contract (other than any Material Contract Contract) that has expired in accordance with its termsif so entered into, modified, amended or terminated would have a Company Material Adverse Effect; or (b) 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(hhh)(iii) shall be exclusively governed by Section 5.2(b) and (y) described by the definition set forth in Section 1.1(hhh)(vi) 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 (including by merger, consolidation or acquisition of stock or assets), other than (i) in or from any wholly owned Subsidiary of the Company, (ii) acquisitions of products and services in the ordinary course of business not pursuant to a merger, consolidation or acquisition of stock or assets or (iii) that do not exceed $5 million in the aggregate;
(n) sell, assign, transfer, or otherwise dispose of, any of the Company’s or its Subsidiaries’ material tangible assets, other than such sales, assignments, transfers or other dispositions that (i) sales of products and services or dispositions of tangible assets except in the ordinary course of business or (iias permitted under Section 5.2(c) do not have a net book value or fair market value that exceeds $5 million individually or $10 million in the aggregateand Section 5.2(j);
(op) 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 404 404;
(r) enter into any Collective Bargaining Agreement or agreement to form a work council or other than transactions entered into in Contract with any labor organization or works council (except to the ordinary course of business on arms-length terms with portfolio companies affiliated with the Principal Stockholdersextent required by applicable law);
(ps) sell, assign, transfer, license, abandon, cancel, permit to lapse or enter the public domain, pledge, encumber or otherwise dispose of grant any material Company Owned Intellectual Propertyrefunds, credits, rebates or other allowances to any end user, customer, reseller or distributor, in each case other than (x) the grant of non-exclusive licenses in the ordinary course of business, or (y) pledges or encumbrances under the Company Credit Agreement as in effect on the date hereof;
(qt) effectuate or announce any a “plant closing”, employee “mass layoff, furlough, reduction to terms and conditions of employment ” (each as defined in WARN) or other employee layoff event affecting effecting in whole or in part any site of employment, facility, operating unit or employee that would result in liability of the Company Group under WARNemployee;
(ru) make any loansacquire (by merger, advances consolidation or capital contributions to, acquisition of stock or investments in, 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, 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 Group’s policies related thereto; (iii) loans, advances or capital contributions to, or investments in, any direct or indirect wholly-owned Subsidiaries of the Company; and (iv) in amounts less than $1 million in the aggregate;or
(sv) enter into, amend authorize any of, or terminate any collective bargaining agreement or other labor agreement with a labor union, works council or similar labor organization;
(t) adopt or implement any stockholder rights plan or similar arrangement applicable to the Transactions or any other transaction consummated pursuant to Parent’s rights under Section 5.3(d); or
(u) agree, resolve agree or commit to enter into a Contract to take any of the actions prohibited by this Section 5.2.
Appears in 1 contract
Samples: Merger Agreement (Mobileiron, Inc.)
Forbearance Covenants. Except (a) as expressly contemplated by this Agreement, (b) as set forth in Section 5.2 of the Company Disclosure Letter, (c) as required by applicable Law, (d) as necessary in response to COVID-19 and any COVID-19 Measures, including Measures to (A) protect the health and safety of the Company’s and its Subsidiaries’ employees, suppliers, customers, partners and other individuals having business dealings with the Company and its Subsidiaries or (B) respond to third-party supply or service disruptions caused by COVID-19 or any COVID-19 Measures; provided that that, the Company has consulted with Parent and considered in good faith any recommendations of Parent Parent) or (e) as approved by Parent in writing (which approval shall not be unreasonably withheld, conditioned or delayed delayed, and shall be deemed given if Parent provides no written response within (x) five (5) seven Business Days after a written request by the Company for such consent or (y) one (1) Business Day after a written request by the Company for such consent that states that such request is being made in response to an emergency or exigent circumstanceconsent), 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 VIII and the Effective Time, the Company shall not, and shall not permit any of its Subsidiaries, to:to (whether directly or indirectly and whether by merger, consolidation, division, conversion, operation of law or otherwise):
(a) amend or repeal the Organizational Documents of the Company, Company or any of its Subsidiaries (other than immaterial ministerial 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, including, for the avoidance of doubt, any Company Equity Awards, except (i) in accordance with the terms of any employment agreements or arrangements set forth on Schedule 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, in accordance with the terms of the applicable award agreements under the Company OptionsStock Plans, Company RSUs Options or Company PSUsRSUs, in each case, in effect outstanding on the date of this Agreement or granted or entered into after the date hereof in compliance with this Agreement as described in Section 5.2(g) of the Company Disclosure Letter; and (ii) pursuant to the Company ESPP in accordance with its terms and Section 2.8(e) hereof, in each case, including with respect to the satisfaction of Tax withholding and, with respect to the Company Options, payment of the exercise priceAgreement;
(d) except for transactions solely among the Company and its Subsidiaries or solely among the Subsidiaries of the Company, adjust, reclassify, split, combine, subdivide or redeem, repurchase, purchase or otherwise acquire or amend the terms of, directly or indirectly, any of its Company Securitiescapital stock or other equity 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 PSUsRSUs, and (iii) the acquisition by the Company of Company Options, Options and 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 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, 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; , (iiiii) modify the terms of any shares of its capital stock or other equity or voting interest, ; or (iviii) 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 moneyIndebtedness, except (Ai) borrowings in the ordinary course of business under the Company’s revolving credit facilities facility as in effect on the date hereof for an amount up or under facilities that replace, renew, extend, refinance or refund such existing revolving credit facility (including indebtedness incurred to $20 millionrepay 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(m) if such existing facility to which it relates constitutes a Material Contract hereunder, (Bii) 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 indebtedness is in existence on the date of this Agreement or incurred in compliance with this Section 5.2(f), (Ciii) performance bonds and surety bonds entered into in the ordinary course of business, and (Div) any Indebtedness indebtedness among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries;
(g) (i) enter into, adopt, amend or modify (including accelerating the vesting or payment), in any material respect or terminate any Employee Plan (or make any plan, agreement, program, policy or grant any award under any other arrangement that would be an Employee Plan (including any equity, bonus or incentive compensationif in existence on the date hereof); (ii) increase the compensation of any employee, director, officer or employee or other individual independent contractor service provider of the Company Group; or (iii) hire or terminate (other than for “cause”) any employee or other individual independent contractorof its Subsidiaries, except, in the case of each of clauses (i), (ii) and (iiiii), (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; (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 Schedule 3.18(a)Agreement; or (CB) 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) Plans; provided that are made in the ordinary course of business and such changes do not materially increase benefits or the cost to the Company and its Subsidiaries; (iii) grant or (D) provide any bonus payable with respect severance or termination payments or benefits to the 2022 fiscal year in the ordinary course of business consistent with past practice and in accordance with the terms of the annual bonus plan in effect as of the date of this Agreement and set forth on Schedule 3.18(a) andany employee, in each casedirector, as further modified by Section 5.2(g) officer or other individual service provider of the Company Disclosure Letteror any of its Subsidiaries with a title of Vice President or above; (iv) 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; (v) 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 (vi) 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) settle, release, waive or compromise any pending or threatened Legal Proceeding other than (A) for an amount in excess of no more than $1,000,000 2 million individually or $5 million in the aggregate other than (provided no equitable relief has been sought or given), (Bi) 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 (Cii) settlements of any Legal Proceedings for an amount not in excess of 110% of the amount, if any, reflected or reserved in the balance sheet (or the notes thereto) of the Company;
(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) make any material adverse change to the operation or security of any Company IT Assets or privacy policies of the Company or its Subsidiaries, except as required by applicable Law;
(i) make any material Tax electionelection that is materially inconsistent with past practices or change or revoke any material Tax election except to the extent consistent with past practices, (ii) adopt, change or revoke any material accounting period or method with respect to Taxes, unless otherwise required by applicable Law, (iii) file any amended material Tax Return, (iv) enter into any closing agreement with respect to a material amount of Taxes, (v) settle or compromise any proceeding with respect to any material Tax claim or assessment; , (vi) consent to any extension or waiver of any limitation period with respect to material Taxes (other than automatic extensions or waivers of time to file income Tax Returns), (vii) surrender any right to claim a material Tax claim refund of Taxes or assessment; file an amended Tax Return that could reasonably be expected to materially increase the Taxes payable by the Company or its Subsidiaries unless required by Law; (viii) request or enter into any ruling with a closing agreement with any Governmental Authority regarding any material Taxwith respect to Taxes;
(kl) incur or commit to incur any capital expenditures other than (i) (x) during amounts for fiscal year 2022, amounts 2023 that are not in excess of 110% of the amounts in the aggregate and for any individual quarter set forth on the capital expenditure budget for the fiscal year 2022, 2023 set forth in Section 5.2(k5.2(l) of the Company Disclosure Letter (the “Capex Budget”) and (y) during fiscal year 2023 amounts not in excess of 110 % of the Capex Budget; or (ii) pursuant to obligations imposed by any Material Contract in effect as of the date of this Agreement);
(lm) 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, provided that any Material Contract (xi) described by the definition set forth in Section 1.1(hhh)(iii1.1(ddd)(iii) shall be exclusively governed by Section 5.2(b5.2(n) and (yii) described by the definition set forth in Section 1.1(hhh)(vi1.1(ddd)(vi) shall be exclusively governed by Section 5.2(f);
(mn) acquire any interest in any Person or any division, assets, properties, businesses or equity securities thereof (or otherwise make any investment) in any Person (including by merger, consolidation or acquisition of stock or assets), other than (i) in or from any wholly wholly-owned Subsidiary of the Company, (ii) acquisitions of products and services assets in the ordinary course of business not pursuant to a merger, consolidation or acquisition of stock or assets or (iii) that do not exceed $5 10 million in the aggregate;
(no) sell, assign, transfer, license, allow to lapse, abandon or otherwise dispose of, of any of the Company’s or its Subsidiaries’ assets, rights or properties (including material tangible assetsCompany Intellectual Property), other than such sales, assignments, transfers or other dispositions that (i) of non-exclusive licenses of Intellectual Property granted in the ordinary course of business or expirations of Company Registered Intellectual Property in accordance with its statutory terms, (ii) of sales of products and services or dispositions of tangible assets in the ordinary course of business or business, (iiiii) that do not have a net book value or fair market value purchase price that exceeds $5 1.5 million individually or $10 3 million in the aggregateaggregate or (iv) solely between the Company and its wholly-owned Subsidiaries or solely between the Company’s wholly-owned Subsidiaries;
(op) 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 (other than transactions entered into in the ordinary course of business on arms-length terms with portfolio companies affiliated with the Principal Stockholders);
(p) sell, assign, transfer, license, abandon, cancel, permit to lapse or enter the public domain, pledge, encumber or otherwise dispose of any material Company Owned Intellectual Property, other than (x) the grant of non-exclusive licenses in the ordinary course of business, or (y) pledges or encumbrances under the Company Credit Agreement as in effect on the date hereof404;
(q) 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;
(r) 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 case, in the ordinary course of business and in compliance in all material respects with the Company GroupCompany’s or its Subsidiaries’ policies related thereto; (iii) loans, advances or capital contributions to, or investments in, any direct or indirect wholly-wholly owned Subsidiaries of the Company; and (iv) if not otherwise covered by clauses (i), (ii) or (iii), in amounts less than $1 million 250,000 in the aggregateaggregate outstanding at any given time;
(r) hire or terminate (other than for cause) the employment or services of any employee, director, officer or individual service provider who is (or upon hire would be) with a title of Vice President or above, except as necessary in the ordinary course of business to replace a departing employee, director, officer, or individual service provider; provided the new hire is employed or retained for substantially the same role and for no more than 15% above the departing individual’s total target cash compensation; provided, further, that the aggregate dollar value of any such increases in excess of all the departing individuals’ total target cash compensation may not exceed $250,000; provided, further, that the Company shall take the actions set forth on Item 25 of Section 5.2 of the Company Disclosure Letter;
(s) effectuate or announce any plant closing or mass layoff which would trigger the notice requirements of the WARN Act;
(t) except as required by applicable Law, enter into, amend in any material respect or terminate any collective bargaining agreement or other labor written agreement with a labor union, works council or similar labor organization;
(t) adopt ; or implement any stockholder rights plan or similar arrangement applicable to the Transactions or any other transaction consummated pursuant to Parent’s rights under Section 5.3(d); or
(u) agree, resolve or commit 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, (b) as set forth in the Company Disclosure Letter, (c) as required by applicable Law, (d) as necessary or advisable in response to COVID-19 and any COVID-19 Measures, including to (A) protect the health and safety of the Company’s and its Subsidiaries’ employees, suppliers, partners and other individuals having business dealings with the Company and its Subsidiaries or (B) respond to third-party supply or service disruptions caused by COVID-19 or any COVID-19 Measures; provided that the Company has consulted with Parent and considered in good faith any recommendations of Parent Measures or (e) as approved by Parent in writing (which approval shall not be unreasonably withheld, conditioned or delayed and shall be deemed given if Parent provides no written response within (x) five (5) Business Days after a written request by the Company for such consent or (y) one (1) Business Day after a written request by the Company for such consent that states that such request is being made in response to an emergency or exigent circumstance), 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 VIII and the Effective Time, the Company shall not, and shall not permit any of its Subsidiaries, to:
(a) amend the Organizational Documents of the Company, Company or amend in any of its Subsidiaries (other than immaterial ministerial changes to material respect the Organizational Documents of any Subsidiaries of its Subsidiaries)the Company;
(b) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization;
(c) issue, sell, deliver or agree or commit to issue, sell or deliver any Company Securities, including, for the avoidance of doubt, any Company Equity Awards, except (i) in accordance with the terms of any employment agreements or arrangements set forth on Schedule 5.2(c)(ior (ii) 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 Options, Company RSUs or Company PSUs, in each caseof the cases in clauses (i) and (ii), in effect on the date of this Agreement or granted or entered into after the date hereof in compliance with this Agreement or as described in contemplated by Section 5.2(g) of the Company Disclosure Letter; and (ii) pursuant to the Company ESPP in accordance with its terms and Section 2.8(e) hereof, in each case, including with respect to the satisfaction of Tax withholding and, with respect to the Company Options, payment of the exercise price6.11;
(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 amend the terms of, directly or indirectly, any of its Company Securitiescapital stock or other equity 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 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, 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) 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 interestinterest (other than to the extent required by the Company Credit Agreement in respect of any shares of capital stock issued after the date hereof in accordance with the terms of this Agreement; provided, that such encumbrances or pledges would not prevent, delay or impede the ability of such interests to be cancelled at the Effective Time);
(f) (i) incur, assume, endorse, guarantee, or otherwise become liable for any Indebtedness indebtedness for borrowed money, except (A) revolving borrowings in the ordinary course of business under the Company’s credit facilities as in effect on the date hereof for an amount up or under facilities that replace, renew, extend, refinance or refund such existing credit facilities (including indebtedness incurred to $20 millionrepay 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(l) if such existing facility to which it relates constitutes a Material Contract hereunder, (B) 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 indebtedness is in existence on the date of this Agreement or incurred in compliance with this Section 5.2(f), (C) performance bonds and surety bonds entered into in the ordinary course of business, business and (D) any Indebtedness indebtedness among the Company and its Subsidiaries or among the Company’s Subsidiaries;
(g) (i) enter into, adopt, amend or modify in any material respect (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 bonus, or incentive compensation); (ii) materially increase the compensation of any director, officer or employee or other individual independent contractor of the Company GroupCompany; 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; (B) to the extent required by applicable Law or pursuant to any Employee Plan in effect on the date of this Agreement and as set forth on Schedule Section 3.18(a)) of the Company Disclosure Letter; (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; or (D) any bonus payable with respect to the 2022 fiscal year in the ordinary course of business consistent with past practice and in accordance with the terms of the annual bonus plan in effect as of the date of this Agreement and set forth on Schedule Section 3.18(a) of the Company Disclosure Letter and, in each case, as further modified by Section 5.2(g) of the Company Disclosure Letter;
(h) settle, release, waive waive, or compromise any pending or threatened Legal Proceeding for an amount equal to or in excess of $1 million individually or $10 million in the aggregate other than (A) for an amount of no more than $1,000,000 individually or $5 million in the aggregate (provided no equitable relief has been sought or given), (B) 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 (CB) settlements of any Legal Proceedings for an amount not materially in excess of 110% of the amount, if any, reflected or reserved in the balance sheet (or the notes thereto) of the Company;
(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 material Tax claim or assessment; consent to any extension or waiver of any limitation period with respect to any material 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 unless required by Law; or enter into a closing agreement with any Governmental Authority regarding any material Tax;
(k) incur or commit to incur any capital expenditures other than (i) (x) during fiscal year 2022, amounts not in excess of 110120% of the capital expenditure budget for the fiscal year 2022, in accordance with the capital expenditure budget for fiscal years 2022 and 2023 set forth in Section 5.2(k) of the Company Disclosure Letter (the “Capex Budget”) and (y) during fiscal year 2023 2023, amounts not in excess of 110 130% of the Capex BudgetBudget for fiscal year 2023; or (ii) pursuant to obligations imposed by any Material 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 (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(hhh)(iii1.1(eee)(iii) shall be exclusively governed by Section 5.2(b5.2(m) and (y) described by the definition set forth in Section 1.1(hhh)(vi1.1(eee)(vi) 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 (or otherwise make any investment) in any Person (including by merger, consolidation or acquisition of stock or assets), other than (i) in or from any wholly owned Subsidiary of the Company, (ii) acquisitions of products and services in the ordinary course of business not pursuant to a merger, consolidation or acquisition of stock or assets or (iii) that do not exceed $5 15 million in the aggregate;
(n) sell, assign, transfer, or otherwise dispose of, any of the Company’s or its Subsidiaries’ material tangible 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 or (ii) do not have a net book value or fair market value purchase price that exceeds $5 2.5 million individually or $10 5 million in the aggregate;
(o) 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, (ii) in the ordinary course of business or in a manner not inconsistent in any material respect with past practices, (iii) the expiration of Registered Intellectual Property at the end of their statutory term, or (iv) pledges or encumbrances under the Company Credit Agreement as in effect on the date hereof or any Permitted Lien;
(p) 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 (other than transactions entered into in the ordinary course of business on arms-length terms with portfolio companies affiliated with the Principal Stockholders);
(p) sell, assign, transfer, license, abandon, cancel, permit to lapse or enter the public domain, pledge, encumber or otherwise dispose of any material Company Owned Intellectual Property, other than (x) the grant of non-exclusive licenses in the ordinary course of business, or (y) pledges or encumbrances under the Company Credit Agreement as in effect on the date hereof404;
(q) 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;
(r) 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 GroupCompany’s or its Subsidiaries’ policies related thereto; (iii) loans, advances or capital contributions to, or investments in, any direct or indirect wholly-wholly owned Subsidiaries of the Company; and (iv) in amounts less than $1 million 250,000 in the aggregateaggregate outstanding at any given time; provided that, for the avoidance of doubt, nothing in this Section 5.2(q) shall restrict any acquisitions that are not prohibited by Section 5.2(m);
(r) effectuate or announce any closing, mass employee layoff, furlough or other event affecting in whole or in part any site of employment, facility or operating unit that would result in material liability to the Company or its Subsidiaries under the Worker Adjustment and Retraining Notification Act of 1988 or any similar applicable Law;
(s) except as required by applicable Law, enter into, amend in any material respect, or terminate any collective bargaining agreement or other labor agreement with a labor union, works council council, or similar labor organization;
(t) adopt or implement any stockholder rights plan or similar arrangement applicable to the Transactions or any other transaction consummated pursuant to Parent’s rights under Section 5.3(d); or
(ut) agree, resolve or commit 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 7.2 of the Company Disclosure Letter, ; (c) as required by applicable Law, (d) as necessary in response to COVID-19 and any COVID-19 Measures, including to (A) protect the health and safety of the Company’s and its Subsidiaries’ employees, suppliers, partners and other individuals having business dealings with the Company and its Subsidiaries or (B) respond to third-party supply or service disruptions caused by COVID-19 or any COVID-19 Measures; provided that the Company has consulted with Parent and considered in good faith any recommendations of Parent or (eii) as approved in advance by Parent in writing (which approval shall will not be unreasonably withheld, conditioned or delayed and delayed; other than for Section 7.2(f) which shall be at Parent’s sole discretion); provided that, if Parent fails to respond to a written request from the Company for consent required pursuant to this Section 7.2 reasonably promptly (but in no event more than seven (7) Business Days following the Company’s request) in writing provided in accordance with Section 11.2) after receipt of such request, Parent’s approval shall be deemed given if Parent provides no written response within granted; or (xiii) five (5) Business Days after a written request as expressly required or expressly contemplated by the Company for such consent terms of this Agreement or (y) one (1) Business Day after a written request required by the Company for such consent that states that such request is being made in response to an emergency applicable Law or exigent circumstance)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 VIII X and the Effective Time, the Company shall will not, and shall will not permit any of its Subsidiaries, to:
(a) amend the Organizational Documents Charter, the Bylaws or any other similar organizational documents of any of the Company, or any of its ’s Subsidiaries (other than immaterial ministerial changes to the Organizational Documents organizational documents of any of its Subsidiaries);
(b) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization;
(c) except as set forth in Section 7.2(c) of the Company Disclosure Letter, issue, sell, encumber, deliver, grant options or rights to purchase or receive, pledge, dispose of or deliver or agree or commit to issue, sell or deliver any Company SecuritiesSecurities or any equity or equity-based awards, includingoptions, warrants or rights of any kind to acquire any shares of, or securities convertible into, or exchangeable for any shares of, Company Capital Stock, or other securities in respect of, in lieu of, or in substitution for any class of its capital stock outstanding as of the avoidance of doubt, any Company Equity AwardsCapitalization Date, except (i) in accordance with the terms of any employment agreements or arrangements set forth on Schedule 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 Options, Company RSUs or Company PSUs, in each case, in effect on outstanding as of the date of this Agreement or granted or entered into after the date hereof in compliance with this Agreement as described in Section 5.2(g) of the Company Disclosure Letter; and (ii) pursuant to the Company ESPP in accordance with its terms and Section 2.8(e) hereof, in each case, including with respect to the satisfaction of Tax withholding and, with respect to the Company Options, payment of the exercise priceAgreement;
(d) except for transactions solely among the Company and its Subsidiaries wholly owned Subsidiaries, directly or solely among the Subsidiaries of the Companyindirectly, adjust, reclassify, split, combine, combine or subdivide any of the Company’s or redeem, repurchase, purchase its Subsidiaries’ capital stock or other equity or voting interest;
(e) repurchase redeem or otherwise acquire or amend the terms ofreacquire, directly or indirectly, any of the Company’s or its Company SecuritiesSubsidiaries’ capital stock or other equity or voting interest, other than (i) transactions solely among the Company and its Subsidiaries or solely among Subsidiaries of the Company; (ii) 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, Options in accordance with the terms in effect on the date hereof; (iiiii) 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, PSUs or the lapse of restrictions applicable to Company RSAs and Company PSAs; and (iiiiv) the acquisition by the Company of Company Options, Company RSUs RSAs, Company RSUs, Company PSAs and Company PSUs in connection with the forfeiture of such awards, in each case case, in accordance with their termsterms as of the date of this Agreement;
(ef) (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, 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 Company, or one of its the Company’s other wholly-wholly owned Subsidiaries; (ii) pledge or encumber any shares of its capital stock or other equity or voting interest; or (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) borrowings in the ordinary course of business under the Company’s credit facilities as in effect on the date hereof for an amount up to $20 million, (B) 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), (C) performance bonds and surety bonds entered into in the ordinary course of business, and (D) any Indebtedness among the Company and its Subsidiaries or among the Company’s Subsidiariesinterests;
(g) (i) enter intoincur, adopt, amend guarantee or modify (including accelerating the vesting or payment), or terminate assume any Employee Plan or make or grant any award under any Employee Plan Indebtedness for borrowed money (including any equitylong-term or short-term debt) or issue any debt securities, bonus or incentive compensation); (ii) increase the compensation of any director, officer or employee or other individual independent contractor of the Company Group; 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), except (A) for trade payables incurred 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 lessbusiness; (B) to the extent required by applicable Law or obligations pursuant to any Employee Plan business credit cards and reimbursement and payment liabilities pursuant to letters of credit, banker’s acceptances or similar items, in effect on each case, in an amount not to exceed $9,000,000 in the date of this Agreement aggregate and set forth on Schedule 3.18(a); (C) in conjunction with annual renewal or plan design changes for 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 business; (C) Indebtedness under the existing credit facilities; (D) additional Indebtedness for borrowed money in an aggregate principal amount not materially increase to exceed $1,000,000 in the cost aggregate (provided that the Company shall provide written notice to Parent prior to any incurrences of Indebtedness for borrowed money, even if less than $1,000,000 in the aggregate); or (E) intercompany loans or advances between or among the Company and its Subsidiaries; ;
(h) mortgage or pledge any of its and its Subsidiaries’ assets, tangible or intangible, or create or incur any lien thereupon (Dother than Permitted Liens), other than (i) any bonus payable with respect to the 2022 fiscal year in the ordinary course of business consistent with past practice and in accordance with the terms of the annual bonus plan in effect as of the date of this Agreement and set forth on Schedule 3.18(a) and, in each case, as further modified by Section 5.2(g) of the Company Disclosure Letter;
(h) settle, release, waive or compromise any pending or threatened Legal Proceeding other than (A) for an aggregate principal amount of no more than not to exceed $1,000,000 individually or $5 million in the aggregate or (provided no equitable relief has been sought ii) in connection with financing transactions permitted by Section 7.2(g) or given), (B) any settlement where the amount paid or consented 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 (C) settlements of any Legal Proceedings for an amount not in excess of 110% of the amount, if any, reflected or reserved in the balance sheet (or the notes thereto) of the CompanyParent;
(i) materially change the Company’s make any loans, advances or its Subsidiaries’ methodscapital contributions to, principles or practices of financial accounting or annual accounting periodinvestments in, any other Person, 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 material Tax claim or assessment; consent to any extension or waiver of any limitation period with respect to any material 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 unless required by Law; or enter into a closing agreement with any Governmental Authority regarding any material Tax;
(k) incur or commit to incur any capital expenditures other than for (i) (x) during fiscal year 2022, amounts not short-term extensions of credit to customers in excess the ordinary course of 110% of the capital expenditure budget for the fiscal year 2022, set forth in Section 5.2(k) of the Company Disclosure Letter (the “Capex Budget”) and (y) during fiscal year 2023 amounts not in excess of 110 % of the Capex Budgetbusiness; or (ii) pursuant short-term advances to obligations imposed by any Material Contract in effect as of the date of this Agreement;
(l) enter intodirectors, modify in any material respect, amend in any material respect or terminate (officers and other than any Material Contract that has expired in accordance with its terms) any Material Contract exceptemployees for travel and other business-related expenses, in each case, in the ordinary course of businessbusiness and in compliance in all material respects with the Company Group’s policies related thereto; provided, that any Material Contract (x) described by the definition set forth in Section 1.1(hhh)(iii) shall be exclusively governed by Section 5.2(b) and (yiii) described by loans, advances or other extensions of credit or capital contributions to, or investments in, the definition set forth in Section 1.1(hhh)(vi) shall be exclusively governed by Section 5.2(f)Company or any of its Subsidiaries of the Company;
(mj) acquire lease, license, abandon, sell, transfer, assign, guarantee or exchange, let lapse, expire or otherwise dispose of 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, material Intellectual Property (ii) acquisitions of products and services in the ordinary course of business not pursuant to a merger, consolidation or acquisition of stock or assets or (iii) that do not exceed $5 million in the aggregate;
(n) sell, assign, transfer, or otherwise dispose of, any of the Company’s or its Subsidiaries’ material tangible assets, other than such sales, assignments, transfers or other dispositions that (i) sales of products and services or dispositions of tangible assets except for non-exclusive licenses granted in the ordinary course of business or expiration of Registered Intellectual Property at the end of its statutory term) or (ii) do not have a net book value or fair market value that exceeds tangible assets in excess of $5 million individually or $10 million 1,000,000 in the aggregate, other than (A) pursuant to financing transactions permitted by Section 7.2(g) or consented to by Parent; and (B) or any capital expenditures permitted by (or consented to by Parent under) Section 7.2(p);
(ok) modify in any material adverse manner, any of its policies related to Data Protection Requirements, or any administrative, technical or physical safeguards related to privacy or data security or IT Systems, except to comply with Data Protection Requirements;
(l) except as may be required by any Employee Plan or applicable Law, (i) enter into, establish, adopt, amend or terminate any material Employee Plan or other compensation or benefit plan, program, policy, contract agreement or arrangement that would constitute a material Employee Plan if in effect on the date of this Agreement; (ii) increase or accelerate or commit to accelerate the funding, payment or vesting of the compensation or benefits provided of any current or former director, officer, employee, or individual consultant of the Company Group, including under any Employee Plan or any other benefit or compensation plan, agreement, contract, program, policy or arrangement; (iii) grant, pay or commit to pay, announce or enter into any cash or equity or equity-based incentive award, bonus, transaction, change in control, severance or similar agreement or any retention or similar agreement with any current or former director, officer, employee, or individual consultant of the Company Group; (iv) hire, promote or engage, or otherwise enter into any employment or individual consulting agreement or arrangement with, any current or former employee, officer, director or other service provider of the Company Group whose annualized base compensation opportunities would exceed $225,000; or (v) terminate any employee, officer, director, or individual consultant of the Company Group other than for cause, whose annualized base compensation exceeds $225,000;
(m) except as set forth in Section 7.2(m) of the Company Disclosure Letter, settle, release, waive or compromise, or offer or propose to 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 $200,000 in the aggregate and that does not involve (x) any admission of wrongdoing or (y) does not impose any material restriction on the business or activities of the Company or any current or future Subsidiaries of the Company or Parent or its current or future Subsidiaries; or (iii) settled in compliance with Section 8.13;
(n) 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 and substantive change in any of its tax or accounting methods, principles or practices;
(i) except in the ordinary course of business, make, change or revoke any material Tax election; (ii) file any Tax Return in a manner inconsistent with past practice; (iii) file any material amended Tax Return; (iv) request any material Tax ruling or enter into any closing agreement with respect to a material amount of Taxes; (v) settle, abandon or compromise any material Tax proceeding; (vi) extend or waive any statute of limitations with respect to a material amount of Taxes; or (vii) surrender any claim for a material refund of Taxes;
(p) incur or commit to incur any capital expenditure(s) in excess of $250,000 in the aggregate, other than consistent with the capital expenditure budget set forth in Section 7.2(p) of the Company Disclosure Letter;
(q) enter into, modify, amend, extend, waive, 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 this Agreement, except in the ordinary course of business or as permitted under Section 7.2(c) and Section 7.2(l);
(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 (other than transactions entered into in the ordinary course of business on arms-length terms with portfolio companies affiliated with the Principal Stockholders);
(p) sell, assign, transfer, license, abandon, cancel, permit to lapse or enter the public domain, pledge, encumber or otherwise dispose of any material Company Owned Intellectual Property, other than (x) the grant of non-exclusive licenses in the ordinary course of business, or (y) pledges or encumbrances under the Company Credit Agreement as in effect on the date hereof;
(q) 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;
(r) make any loans, advances or capital contributions to, or investments in, any other Person404, 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 Group’s policies related thereto; (iii) loans, advances or capital contributions to, or investments in, any direct or indirect wholly-owned Subsidiaries of the Company; and (iv) in amounts less than $1 million in the aggregateas permitted under Section 7.2(l);
(s) 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 commercial arrangements that do not involve the formation of an entity with any third Person) except in respect of any merger, consolidation or business combination among the Company and its Subsidiaries or among the Company’s Subsidiaries;
(t) except as required by applicable Law or a Collective Bargaining Agreement, (i) negotiate, enter into, amend modify, extend or terminate any collective bargaining agreement Collective Bargaining Agreement; or other labor agreement with a (ii) recognize or certify any labor union, works council or similar other labor organization, employee representative or group of employees, as the bargaining representative for any employees of the Company Group;
(tu) adopt maintain insurance at less than current levels or otherwise in a manner inconsistent with past practice, unless mandated by the insurance carrier;
(v) waive or release any noncompetition, nonsolicitation, non-disclosure, noninterference, non-disparagement, or other similar restrictive covenant obligation of any current or former employee or independent contractor in the event that the Company Group has Knowledge of an actual or threatened breach of such obligation;
(w) implement any stockholder rights plan mass layoff or similar arrangement applicable to plant closing that would trigger the Transactions notice requirements of the Worker Adjustment and Retraining Notification Act of 1988, as amended, or any other transaction consummated pursuant to Parent’s rights under similar state Law;
(x) engage in any of the actions set forth in Section 5.3(d)7.2(x) of the Company Disclosure Letter; or
(uy) agreeenter into, resolve authorize any of, or agree or commit to enter into a Contract to take any of the actions prohibited by this Section 5.27.2.
Appears in 1 contract
Forbearance Covenants. Except (aw) as expressly contemplated or permitted by this Agreement, (bx) as set forth in Section 4.2 of the Company Disclosure LetterSchedule, (c) as required by applicable Law, (d) as necessary in response to COVID-19 and any COVID-19 Measures, including to (A) protect the health and safety of the Company’s and its Subsidiaries’ employees, suppliers, partners and other individuals having business dealings with the Company and its Subsidiaries or (B) respond to third-party supply or service disruptions caused by COVID-19 or any COVID-19 Measures; provided that the Company has consulted with Parent and considered in good faith any recommendations of Parent or (ey) as approved in writing by Parent in writing (which approval shall will not be unreasonably withheld, conditioned delayed or delayed and shall be deemed given if Parent provides no written response within (x) five (5) Business Days after a written request by the Company for such consent conditioned), or (yz) one (1) Business Day after a written request as required by the Company for such consent that states that such request is being made in response to an emergency or exigent circumstance)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 VIII VII and the Effective Time, the Company shall not, not do any of the following and shall not permit any of its SubsidiariesSubsidiaries to do any of the following (it being understood and hereby agreed that if any action is expressly permitted by any of the following subsections, to:such action shall be expressly permitted under Section 4.1 also):
(a) amend the Organizational Documents amend, waive or otherwise modify its certificate of the Company, incorporation or any of its Subsidiaries (other than immaterial ministerial changes to the Organizational Documents of any of its Subsidiaries)bylaws or comparable organizational documents;
(b) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganizationreorganization of the Company or any of its operating Subsidiaries;
(c) issue, sell, deliver deliver, grant or agree or authorize, propose or commit to issue, sell sell, deliver or deliver grant (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities or any Subsidiary Securities, including, except for the avoidance of doubt, any Company Equity Awards, except (i) in accordance with the terms issuance and sale of any employment agreements shares of Company Common Stock pursuant to the exercise of Company Options or arrangements set forth on Schedule 5.2(c)(iCompany Warrants outstanding prior to the date hereof or (ii) the granting 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 Options, not to exceed an aggregate of 100,000 (one hundred thousand) Company RSUs Options, that will each be settled at the Effective Time in the manner set forth in Section 1.7(d)(ii), which in each case will have an exercise price equal to or Company PSUsin excess of the Per Share Price (as adjusted pursuant to Section 1.7(b), in each case, connection with any new non-officer employee hires or the promotion of any non-officer employees consistent in effect on amount with past practices or guidelines established prior to the date of this Agreement or granted or entered into after the date hereof in compliance with this Agreement as described in Section 5.2(g) negotiation of the Company Disclosure Letter; transactions contemplated hereby, and (ii) pursuant to the Company ESPP in accordance with its terms and Section 2.8(e) hereof, in each case, including with respect to the satisfaction of Tax withholding andother terms, including vesting, consistent with respect to the Company Options, payment of the exercise pricepast practice;
(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 indirectlyindirectly acquire, repurchase or redeem any of its Company Securities, Securities or Subsidiary Securities (other than (i) the acquisitions withholding 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 Warrants or Company PSUs in connection with Restricted Shares outstanding as of the forfeiture date of such awards, in each case in accordance with their termsthis Agreement);
(e) (i) adjust, split, combine or reclassify any shares of capital stockCompany Securities or Subsidiary Securities, or issue or authorize or propose the issuance of any other Company Securities securities in respect of, in lieu of or in substitution for, shares of its capital stock Company Securities or other equity or voting interestSubsidiary Securities; (ii) declare, set any record dates or payment dates for, 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 Company Securities or other equity or voting interestSubsidiary Securities, or make any other actual, constructive or deemed distribution in respect of the shares of capital stock Company Securities or other equity or voting interestSubsidiary Securities, except for cash dividends made by any direct or indirect wholly-wholly owned Subsidiary of the Company to the Company or one of its other wholly-owned Subsidiaries; (iii) pledge or encumber any Company Securities or Subsidiary Securities; or (iv) modify the terms of any shares of its capital stock Company Securities or other equity or voting interest, or (iv) pledge or encumber any shares of its capital stock or other equity or voting interestSubsidiary Securities;
(f) (i) incur, assumecreate, endorse, guarantee, assume or otherwise become liable for any Indebtedness for borrowed moneyIndebtedness, except other than (A) borrowings as permitted by clause (i) of Section 4.2(h), (B) for an aggregate liability that will not exceed $5,000,000 (five million dollars), (C) under revolving credit facilities in effect on the date hereof and disclosed to Parent, or (D) in connection with trade payables incurred in the ordinary course of business under or 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 Company’s credit facilities as in effect on the date hereof for an amount up obligations of any other Person, except with respect to $20 million, (B) guarantees obligations of direct or credit support provided by the Company or any of its indirect wholly owned Subsidiaries of the obligations 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 to the extent such Indebtedness is in existence on the date Subsidiaries; or (iv) sell, mortgage, lease, transfer, encumber, license, abandon, pledge or otherwise dispose of this Agreement any of its or incurred in compliance with this Section 5.2(f)its Subsidiaries’ material assets, (C) performance bonds and surety bonds entered into tangible or intangible, other than dark fiber sales in the ordinary course of business, and or create or suffer to exist any Lien thereupon (Dother than Permitted Liens) including by merger, consolidation, asset sale or other business combination, other than any Indebtedness among the Company and its Subsidiaries Liens incurred in connection with transactions permitted by clause (i) of Section 4.2(f); or among the Company’s Subsidiaries(v) cancel, release or assign any material indebtedness or claims;
(g) (i) enter into, adopt, create, amend or modify (including accelerating the vesting or paymentacceleration of vesting), modify or terminate any Employee Plan bonus, profit sharing, compensation, severance, termination, option, appreciation right, performance unit, incentive, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, severance or make other employee benefit agreement, trust, plan, fund or grant other arrangement for the compensation, benefit or welfare of any award under director, officer or employee in any Employee Plan manner, except in any such case (including other than with respect to severance) (A) as may be required by applicable law, (B) with respect to employees, other than officers of the Company, increases in salary in the ordinary course of business and consistent with past practice or (C) in the ordinary course of business and consistent with past practice in connection with any equity, bonus new non-officer employee hires or incentive compensation)the promotion of any non-officer employees; or (ii) increase the compensation of any director, officer or employee employee, pay any severance, special bonus or other individual independent contractor 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 Company Group; date hereof, except in any such case (X) as may be required by applicable law 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), (AY) in the ordinary course of business and consistent with respect past practice in connection with any new non-officer employee hires or the promotion of any non-officers employees;
(h) (i) incur or commit to Persons eligible to earn an annual base salary incur any capital expenditures, or wages (or, any obligations or liabilities in connection therewith that individually or in the case of non-employee service providersaggregate, equivalent compensation) are in excess of $200,000 or less; 5,000,000 (five million dollars), except (A) as included in the Company’s capital expenditure budget furnished to Parent prior to the date hereof, (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 Schedule 3.18(a); (C) in conjunction with annual renewal or plan design changes for 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; or (D) any bonus payable with respect to the 2022 fiscal year as incurred in the ordinary course of business consistent with past practice and or (C) in accordance with the terms respect of the annual bonus plan in effect as repair or replacement of the date current assets or properties of this Agreement and set forth on Schedule 3.18(a) and, in each case, as further modified by Section 5.2(g) of the Company Disclosure Letter;
(h) settle, release, waive or compromise any pending or threatened Legal Proceeding other than (A) for an amount of no more than $1,000,000 individually or $5 million in the aggregate (provided no equitable relief has been sought or given), (B) 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 (C) settlements of any Legal Proceedings for an amount not in excess of 110% of the amount, if any, reflected or reserved in the balance sheet (or the notes thereto) of the Company;
(i) materially change the Company’s or its Subsidiaries’ methods, principles or consistent with past 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 material Tax claim or assessment; consent to any extension or waiver of any limitation period with respect to any material 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 unless required by Law; or enter into a closing agreement with any Governmental Authority regarding any material Tax;
(k) incur or commit to incur any capital expenditures other than (i) (x) during fiscal year 2022, amounts not in excess of 110% of the capital expenditure budget for the fiscal year 2022, set forth in Section 5.2(k) of the Company Disclosure Letter (the “Capex Budget”) and (y) during fiscal year 2023 amounts not in excess of 110 % of the Capex Budgetits Subsidiaries); or (ii) pursuant to obligations imposed by pay, discharge, settle or satisfy any Material Contract in effect as of the date of this Agreement;
(l) enter intoliabilities, 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 exceptthe payment, in each case, 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; provided(iii) enter into, that any Material Contract modify, amend or terminate (x) described by the definition set forth in Section 1.1(hhh)(iii) shall be exclusively governed by Section 5.2(b) and any Contract which if so entered into, modified, amended or terminated would have a Company Material Adverse Effect or (y) described by the definition set forth in Section 1.1(hhh)(vi) 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 (including by merger, consolidation or acquisition of stock or assets), other than (i) in or from any wholly owned Subsidiary of the Company, (ii) acquisitions of products and services except in the ordinary course of business not pursuant to a mergerbusiness, consolidation or acquisition of stock or assets any Material Contract; or (iii) that do not exceed $5 million in the aggregate;
(n) sell, assign, transfer, or otherwise dispose of, any of the Company’s or its Subsidiaries’ material tangible assets, other than such sales, assignments, transfers or other dispositions that (i) sales of products and services or dispositions of tangible assets in the ordinary course of business or (ii) do not have a net book value or fair market value that exceeds $5 million individually or $10 million in the aggregate;
(oiv) engage in any transaction with, or enter into any agreement, arrangement or understanding with, with any Affiliate of the Company or other Person covered by Item 404 of Regulation S-K promulgated by under the SEC Exchange Act that would be required to be disclosed pursuant to under such Item 404 (other than transactions entered those in existence on the date of this Agreement;
(i) compromise or settle any pending or threatened material Legal Proceeding having a value or in an amount not covered by insurance in excess of $1,000,000 (one million dollars);
(j) except as may be required by applicable law or by GAAP (including as a result of any change in law or GAAP that becomes effective after the date of this Agreement), make any change in any of the accounting methods or principles used by it;
(i) change its material Tax accounting methods, principles or practices, except as required by GAAP or applicable law; (ii) make or change any material Tax election; (iii) settle or compromise any material U.S. federal, state, local or non-U.S. Tax liability; (iv) fail to file any material Tax Return when due (taking into account lawful extensions of the due date for any Tax Return) or fail to cause such Tax Returns when filed to be complete and accurate in all material respects; or (v) consent to any extension or waiver of any limitation period with respect to any claim or assessment for material Taxes;
(l) acquire (including by merger, consolidation or acquisition of stock or assets) any other business, material property or assets thereof or any material equity interest therein in excess of $10,000,000 (ten million dollars) in the aggregate; provided that the Company shall not, and shall not permit its Subsidiaries to, acquire any such business, material property or assets from any Affiliate (including any director or officer or any Affiliate thereof) of the Company;
(m) implement any employee layoffs that could implicate the Worker Adjustment and Retraining Notification Act of 1988, as amended, or any similar or related state or local law, regulation, or ordinance, or enter into any collective bargaining agreement;
(n) enter into a material line of business outside of its existing business;
(o) except as required by applicable law or in the ordinary course of business on arms-length terms consistent with portfolio companies affiliated with past practice (including as contemplated by the Principal StockholdersCompany’s 2012 operating plan);, (i) launch any new programming or other service, (ii) change the rates charged the Company and its Subsidiaries for any class of service or any other existing customer charges (including entering into customer billing services agreements providing for launch incentives or free coverage periods), or (iii) institute any new charges or add or delete or change the mix or channel positions of any programming services; or
(p) sell, assign, transfer, license, abandon, cancel, permit to lapse or enter the public domain, pledge, encumber or otherwise dispose of any material Company Owned Intellectual Property, other than (x) the grant of non-exclusive licenses in the ordinary course of business, or (y) pledges or encumbrances under the Company Credit Agreement as in effect on the date hereof;
(q) 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;
(r) 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 Group’s policies related thereto; (iii) loans, advances or capital contributions to, or investments in, any direct or indirect wholly-owned Subsidiaries of the Company; and (iv) in amounts less than $1 million in the aggregate;
(s) enter into, amend or terminate any collective bargaining agreement or other labor agreement with a labor union, works council or similar labor organization;
(t) adopt or implement any stockholder rights plan or similar arrangement applicable to the Transactions or any other transaction consummated pursuant to Parent’s rights under Section 5.3(d); or
(u) agree, resolve or commit agree to take any of the actions prohibited by described in this Section 5.24.2. The parties hereto acknowledge and hereby agree that the restrictions set forth in this Section 4.2 and elsewhere in this Agreement 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
Samples: Merger Agreement (Knology Inc)
Forbearance Covenants. Except (a) as expressly contemplated by this Agreement, (bi) as set forth in Section 5.2 of the Company Disclosure Letter, ; (c) as required by applicable Law, (d) as necessary in response to COVID-19 and any COVID-19 Measures, including to (A) protect the health and safety of the Company’s and its Subsidiaries’ employees, suppliers, partners and other individuals having business dealings with the Company and its Subsidiaries or (B) respond to third-party supply or service disruptions caused by COVID-19 or any COVID-19 Measures; provided that the Company has consulted with Parent and considered in good faith any recommendations of Parent or (eii) as approved by Parent in writing (which approval shall will not be unreasonably withheld, conditioned or delayed delayed); (iii) in respect of Section 5.2(j), Section 5.2(o), Section 5.2(w), Section 5.2(x), Section 5.2(y) and shall be deemed given if Parent provides no written response within Section 5.2(aa) (xto the extent relating to the Sections referenced in this clause (iii)), for any actions taken reasonably and in good faith that are necessary to respond to COVID-19 Measures and that are not intended to circumvent the restrictions set forth in this Section 5.2; or (iv) five (5) Business Days after a written request as expressly contemplated by the Company for such consent terms of this Agreement or (y) one (1) Business Day after a written request required by the Company for such consent that states that such request is being made in response to an emergency or exigent circumstance)applicable 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 VIII and the Effective Time, the Company shall will not, and shall will not permit any of its Subsidiaries, to:
(a) amend the Organizational Documents of Charter, the CompanyBylaws, or any of its Subsidiaries (other than immaterial ministerial changes to the Organizational Documents of any of its Subsidiaries)similar organizational document;
(b) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization;
(c) issue, sell, deliver or agree 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, including, except (A) for the avoidance of doubt, any Company Equity Awards, except (i) in accordance with the terms of any employment agreements issuance or arrangements set forth on Schedule 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 Options, Company RSUs or Company PSUs, in each case, in effect on the date of this Agreement or granted or entered into after the date hereof in compliance with this Agreement as described in Section 5.2(g) of the Company Disclosure Letter; and (ii) pursuant to the Company ESPP in accordance with its terms and Section 2.8(e) hereof, in each case, including with respect to the satisfaction of Tax withholding and, with respect to the Company Options, payment of the exercise price;
(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 Company Securities, other than (i) the acquisitions sale of shares of Company Common Stock in connection with the surrender exercise or settlement (as applicable) of shares the Company Equity Awards outstanding as of Company Common Stock by holders of Company Options the date hereof 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 accordance with the exercise of Company Options and terms as in effect on the vesting and settlement of Company RSUs date hereof or Company PSUs, and (iii) the acquisition by pursuant to purchase rights under the Company ESPP outstanding as of Company Options, Company RSUs and Company PSUs in connection with the forfeiture of such awards, in each case date hereof in accordance with their termsterms as in effect on the date hereof or (B) in connection with agreements in effect on the date hereof and made available to Parent;
(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) (iA) 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, any shares of its capital stock or other equity or voting interest; (iiB) 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, or make any other actual, constructive or deemed distribution in respect of the 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 Company, or one of its the Company’s other wholly-owned Subsidiaries; (iiiC) modify the terms of pledge or encumber any shares of its capital stock or other equity or voting interest, ; or (ivD) pledge or encumber modify the terms of any shares of its capital stock or other equity or voting interest;
(f) (iA) incurincur or assume any indebtedness for borrowed money (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) 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 (B) assume, endorse, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any Indebtedness for borrowed moneyother Person, except with respect to obligations of any direct or indirect wholly-owned Subsidiaries of the Company;
(Ag) borrowings 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 under and in compliance in all material respects with the CompanyCompany Group’s credit facilities as in effect on the date hereof for an amount up to $20 millionpolicies related thereto; and (2) loans, (B) guarantees advances or credit support provided by capital contributions to, or investments in, the Company or any of its direct or indirect wholly-owned Subsidiaries of the obligations 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 $150,000 individually, and other than (1) the sale, lease or licensing of products or services of the Company Group or any other materials embodying Company Intellectual Property in the ordinary course of its Subsidiaries to business; (2) the extent such Indebtedness is in existence on acquisition, lease or license of products or services by the date of this Agreement or incurred in compliance with this Section 5.2(f), (C) performance bonds and surety bonds entered into Company Group in the ordinary course of business, (3) the acquisition, assignment, abandonment or expiration (at the end of its maximum statutory duration in accordance with its statutory terms) of 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 the extent not economically desirable to maintain for the conduct of the business of the Company Group; and (D5) any Indebtedness among the Company and its Subsidiaries capital expenditures permitted by (or among the Company’s Subsidiariesconsented to by Parent under) Section 5.2(n);
(gj) (iA) enter into, adopt, amend or modify (including accelerating the vesting vesting, payment or paymentfunding), 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 entered into with new hires or make or grant any award under any Employee Plan (including any equityseparation agreements with employees of employees of the Company Group, bonus or incentive compensationin each case, in the ordinary course of business and whose annual salary is less than $250,000); (iiB) increase or decrease the compensation of any director, officer or employee officer, employee, individual consultant, former employee, individual independent contractor, or other individual independent contractor service provider of the Company Group; (C) pay or grant (or accelerate the time of payment or vesting of) any compensation or benefit not provided for by any Employee Plan as in effect as of the date hereof; (D) enter into any gross-up, 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 (iiiE) hire or hire, terminate (other than for “cause”) ), furlough or temporarily lay off any employee or other officer, employee, director, individual independent contractor, exceptindividual consultant, in or other individual service provider of the case of each of clauses (i), (ii) and (iii), (A) in the ordinary course of business Company Group 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 $200,000 250,000 or lessmore; (B) to the extent except in each case, as required by applicable Law or pursuant to any Employee Plan in effect on the date of this Agreement and set forth on Schedule 3.18(a); (C) in conjunction with annual renewal or plan design changes for 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; or (D) any bonus payable with respect to the 2022 fiscal year in the ordinary course of business consistent with past practice and in accordance with the terms of the annual bonus plan applicable Employee Plan in effect as of the date of this Agreement and set forth on Schedule 3.18(a) and, in each case, as further modified by Section 5.2(g) of the Company Disclosure Letterhereof;
(hk) settle, release, waive or compromise any pending or threatened material Legal Proceeding or other than 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 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 an amount solely monetary payments of, net of insurance recovery, no more than $1,000,000 100,000 individually or and $5 million 250,000 in the aggregate (provided no equitable relief has been sought aggregate; or given), (B) 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 (C) settlements of any Legal Proceedings for an amount not settled in excess of 110% of the amount, if any, reflected or reserved in the balance sheet (or the notes thereto) of the Companycompliance with Section 6.15;
(il) materially change the Company’s or its Subsidiaries’ methods, principles or practices of financial accounting or annual accounting period, except as required by applicable law or GAAP, Regulation S(A) revalue in any material respect any of its properties or assets, including writing-X off notes or accounts receivable, other than in the ordinary course of the Exchange Act business; or (B) make any change in any of its accounting principles or any interpretation thereof), or by any Governmental Authority or applicable Lawpractices;
(jA) make (other than in the ordinary course of business) or change any material Tax election; (B) settle, consent to or settle compromise any material Tax claim or assessmentassessment 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 reasonably be expected to materially increase the Taxes payable by the Company or its Subsidiaries unless required by LawSubsidiaries; or (E) enter into a closing agreement with any Governmental Authority regarding any material Tax;
(kn) incur or commit to incur any capital expenditures expenditure(s) other than (i) (x) during fiscal year 2022, amounts not in excess of 110% of consistent with the capital expenditure budget for the fiscal year 2022, set forth in Section 5.2(k5.2(n) of the Company Disclosure Letter Letter;
(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, individually or in the “Capex Budget”) and (y) during fiscal year 2023 amounts not in excess of 110 % of the Capex Budgetaggregate, have a Company Material Adverse Effect; or (ii) pursuant to obligations imposed by any Material Contract or any Contract that would have been a Material Contract if such Contract was in effect existence as of the date of this Agreement;
(l) enter intohereof, 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, except in the ordinary course of business; providedbusiness or as expressly permitted under this Section 5.2 or, that any Material in the case of this clause (ii), other than terminations under the terms of the Contract (x) described by in connection with the definition set forth in Section 1.1(hhh)(iii) shall be exclusively governed by Section 5.2(b) and (y) described by the definition set forth in Section 1.1(hhh)(vi) shall be exclusively governed by Section 5.2(f)counterparty’s breach;
(mp) 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) any other Person or any material portion thereof or material equity interest therein that involves consideration valued in excess of $500,000 in the aggregate, 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);
(q) (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; or (B) recognize or certify any labor union, works council or other than labor organization, or group of employees, as the bargaining representative for any employees of the Company Group, except as required by applicable law;
(r) waive or release any noncompetition, nonsolicitation, nondisclosure, noninterference, nondisparagement, or other restrictive covenant obligation of any current or former employee or independent contractor;
(s) adopt or implement any shareholder 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);
(t) fail to maintain in full force and effect, in any material respect, material insurance policies covering the Company and its Subsidiaries and their respective properties, assets and businesses in a form and amount consistent with past practice, unless the Company determines in its reasonable commercial judgment that the form or amount of such insurance should be modified;
(u) (i) in or from sell any wholly owned Subsidiary of the Company, (ii) acquisitions of products and services in the ordinary course of business not pursuant to a merger, consolidation or acquisition of stock or assets or (iii) that do not exceed $5 million in the aggregate;
(n) sell, assign, transfer, or otherwise dispose of, any of the Company’s or its Subsidiaries’ material tangible assets, other than such sales, assignments, transfers or other dispositions that (i) sales of products and services or dispositions of tangible assets in the ordinary course of business Owned Real Property or (ii) do not have a net book value purchase any real property or fair market value portion thereof or interest therein that exceeds involve consideration valued in excess of $5 million individually or $10 million in the aggregate500,000;
(ov) 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 (other than transactions entered into in the ordinary course of business on arms-length terms with portfolio companies affiliated with the Principal Stockholders)404;
(pw) sellimplement or announce any employee layoffs, assignplant closings, transferreductions in force, licensefurloughs, abandontemporary layoffs, cancelsalary or wage reductions, permit work schedule changes or other such actions that could implicate the WARN Act;
(A) close any stores that results in a material deviation from the store closure plan set forth in Section 5.2(x) of the Company Disclosure Letter (the “Store Closure Plan”), (B) with respect to lapse the timing of any store closure listed in the Store Closure Plan, take any action or fail to take any action that results in a material deviation from the timing of any such store closure as set forth in the Store Closure Plan, (C) with respect to any store closure listed in the Store Closure Plan, commit to incur (or incur) any lease breakage costs or similar amounts materially in excess of the amount set forth on the Store Closure Plan;
(i) open any new stores or enter into any lease with respect to a new store that results in a material deviation from the public domain, pledge, encumber store opening and lease plan set forth in Section 5.2(y) of the Company Disclosure Letter (the “Store Opening Plan”) or (ii) renew or extend any existing store leases for a term in excess of three years from the date such lease would otherwise dispose of any material Company Owned Intellectual Property, expire or terminate in accordance with its current terms;
(z) other than (x) the grant of non-exclusive licenses in the ordinary course of business, enter into any Contract (other than any Contract with any employee or (y) pledges or encumbrances under the Company Credit Agreement as in effect on the date hereof;
(q) 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 service provider of the Company Group under WARNor that would otherwise constitute an Employee Plan if in effect as of the date hereof and that is not otherwise prohibited by this Section 5.2) which contains a change in control or similar provision that pursuant to its terms would require a payment to the other party or parties thereto in connection with the Merger or the other transactions (including in combination with any other event or circumstance) or any subsequent change in control of the Company or any of its Subsidiaries;
(raa) make any loans, advances or capital contributions to, or investments in, any other Person, except for (i) extensions of credit to customers than in the ordinary course of business; (ii) advances to directors, officers and other employees for travel and other business-related expenses, acquire or purchase any inventory that results in each case in a material deviation from the ordinary course inventory purchase plan of business and in compliance in all material respects with the Company Group’s policies related thereto; (iiiGroup set forth in Section 5.2(aa) loans, advances or capital contributions to, or investments in, any direct or indirect wholly-owned Subsidiaries of the CompanyCompany Disclosure Letter; and (iv) in amounts less than $1 million in the aggregate;or
(sbb) enter into, amend authorize any of, or terminate any collective bargaining agreement or other labor agreement with a labor union, works council or similar labor organization;
(t) adopt or implement any stockholder rights plan or similar arrangement applicable to the Transactions or any other transaction consummated pursuant to Parent’s rights under Section 5.3(d); or
(u) agree, resolve agree or commit to enter into a Contract to take any of the actions prohibited by this Section 5.2.
Appears in 1 contract
Samples: Merger Agreement (Chico's Fas, Inc.)
Forbearance Covenants. Except (a) as expressly contemplated by this Agreement, (b) as set forth in Section 5.2 of the Company Disclosure Letter, (c) as required by applicable Law, (d) as necessary or advisable in response to COVID-19 and any COVID-19 Measures, including to (A) protect the health and safety of the Company’s and its Subsidiaries’ employees, suppliers, partners and other individuals having business dealings with the Company and its Subsidiaries ; or (B) respond to third-party supply or service disruptions caused by COVID-19 or any COVID-19 Measures; provided that prior to making any such changes, the Company has shall have, in each case, to the extent reasonably practicable, notified and consulted with Parent and considered in good faith any recommendations of Parent Parent’s views with respect to such changes or (e) as approved by Parent in writing (which approval shall not be unreasonably withheld, conditioned or delayed and shall be deemed given if Parent provides no written response within (x) five (5) Business Days after a written request by the Company for such consent or (y) one (1) Business Day after a written request by the Company for such consent that states that such request is being made in response to an emergency or exigent circumstancedelayed), 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 VIII and the Effective Time, the Company shall not, and shall not permit any of its their Subsidiaries, to:
(a) amend the Organizational Documents of the Company, Company or any of its Subsidiaries (other than immaterial ministerial changes to the Organizational Documents of in any of its Subsidiaries)respect;
(b) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization;
(c) issue, sell, deliver or agree or commit to issue, sell or deliver any Company Securities, including, for the avoidance of doubt, any Company Equity Awards, except (i) in accordance with the terms of any employment agreements or arrangements set forth on Schedule 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 exercise, or settlement of, Company Options, Company RSUs Equity Awards; or Company PSUs, in each case, in effect on the date of this Agreement or granted or entered into after the date hereof in compliance with this Agreement as described in Section 5.2(g) of the Company Disclosure Letter; and (ii) pursuant to the Company ESPP in accordance with its terms and as contemplated by Section 2.8(e) hereof5.2(g), in each case, including with respect to the satisfaction of Tax withholding and, with respect to the Company Options, payment of the exercise priceSection 6.9 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 amend the terms of, directly or indirectly, any of its Company Securitiescapital stock or other equity or voting interest, other than (i) the acquisitions of shares of Company Class A Common Stock in connection with the surrender of shares of Company Class A Common Stock by holders of Company Options PSOs issued prior to the date hereof in order to pay the exercise price of such Company OptionsPSOs as part of the net settlement thereof, (ii) the withholding of shares of Company Common Stock to satisfy Tax obligations incurred in connection with the exercise of Company Options PSOs issued prior to the date hereof and the vesting and settlement of Company RSUs or Company PSUs, in each case, issued prior to the date hereof and (iii) the acquisition by the Company of Company Options, Company RSUs and Company PSUs Equity Awards in connection with the forfeiture of such awards, in each the case of clauses (i), (ii) and (iii), 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, 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 (A) cash dividends made by any direct or indirect wholly-owned Subsidiary of ATC Holdings to another Subsidiary of the Company to the Company that, is directly or one of its other wholly-indirectly, wholly owned Subsidiariesby ATC Holdings; (iii) modify the terms of any shares of its capital stock or other equity or voting interest, or (ivB) Tax distributions made in accordance with the Organizational Documents of ATC Holdings; or (ii) pledge or encumber any shares of its capital stock or other equity or voting interest, except under the Company Credit Agreement;
(f) (i) incur, assume, endorse, guarantee, or otherwise become liable for any Indebtedness indebtedness for borrowed money, except (A) borrowings in the ordinary course of business for working capital purposes under the Company’s credit facilities ABL Company Credit Agreement as in effect on the date hereof for an amount up or under revolving facilities that replace, renew, extend, refinance or refund such existing credit facilities (including indebtedness incurred to $20 millionrepay or refinance related fees and expenses), (B) 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 indebtedness is in existence on the date of this Agreement or incurred in compliance with this Section 5.2(f), (C) performance bonds and surety bonds entered into in the ordinary course of businessbusiness in a manner consistent with past practices, and (D) any Indebtedness indebtedness among the Company and its Subsidiaries or among the Company’s SubsidiariesSubsidiaries or (E) any additional indebtedness in an amount not to exceed $5,000,000 in the aggregate; provided that such indebtedness referred to in this clause (E) may be repaid without penalty at the Closing or (ii) permit any of its material assets to become subject to a lien or other encumbrance (other than a Permitted Lien);
(g) (i) enter into, adopt, adopt or amend or modify (including accelerating the vesting or payment)in any material respect, or terminate any material Employee Plan or make or grant any award under any arrangement that would be a material Employee Plan (including any equity, bonus or incentive compensation)if it were in effect on the date hereof; (ii) increase the compensation of or benefits of, or grant any equity awards to, any current or former director, officer or officer, employee or other individual independent contractor of the Company Groupor any of its Subsidiaries; or (iii) hire hire, engage or terminate (other than for “cause”) the employment or engagement of any employee or other individual independent contractor, contractor earning annual base compensation equal to or in excess of $200,000 or at or above the Senior Vice President or Director level; except, in the case of each of clauses (i), (ii) and (iiiii), (A) any increase in base compensation in the ordinary course of business consistent with respect to Persons eligible to earn an past practice for non-officer employees whose annual base salary or wages (or, in the case of non-employee service providers, equivalent compensation) of compensation does not exceed $200,000 after giving effect to such increase and whose title is below the Senior Vice President or lessDirector level; (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 disclosed on Schedule 3.18(a)the Company Disclosure Letter; or (C) in conjunction with immaterial annual renewal or plan design changes for health and welfare 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; or (D) any bonus payable with respect to the 2022 fiscal year in the ordinary course of business consistent with past practice and in accordance or (D) other than with the terms of the annual bonus plan in effect as of the date of this Agreement and set forth on Schedule 3.18(a) andrespect to equity awards, in conjunction with new hires and promotions of non-executive employees earning less than $200,000 per year and who are below the Senior Vice President or Director level and changes in job position or status of any current employee or other service provider to non-executive employee positions earning less than $200,000 per year and that are below the Senior Vice President or Director level, consistent with past practice; and except, in the case of each caseof clauses (ii) and (iii), as further modified by Section 5.2(g) with respect to a non-executive employee or individual service provider whose compensation is, in whole or in part, directly billable to a client of the Company Disclosure Letter;
(h) settle, release, waive or compromise any pending or threatened Legal Proceeding other than (A) for an amount of no more than $1,000,000 individually or $5 million in the aggregate (provided no equitable relief has been sought or given), (B) any settlement where the amount paid or to be paid its Subsidiaries and does not create a net annual compensation overhead burden borne by the Company or any of its Subsidiaries is covered by insurance coverage maintained by the Company or any of its Subsidiaries and (C) settlements of any Legal Proceedings for an amount not in excess of 110% of the amount, if any, reflected or reserved in the balance sheet (or the notes thereto) of the Companythat exceeds $200,000;
(ih) materially change the Company’s or its Subsidiaries’ methods, principles or practices of financial accounting or annual accounting period, except as required by any change in GAAP, Regulation S-X of the Exchange Act (or any change in the interpretation thereof), or by any Governmental Authority or other applicable change in Law;
(j) change any material Tax election, or settle any material Tax claim or assessment; consent to any extension or waiver of any limitation period with respect to any material 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 unless required by Law; or enter into a closing agreement with any Governmental Authority regarding any material Tax;
(k) incur or commit to incur any capital expenditures other than (i) (x) during fiscal year 2022, amounts not in excess of 110% of the capital expenditure budget for the fiscal year 2022, set forth in Section 5.2(k) of the Company Disclosure Letter (the “Capex Budget”) and (y) during fiscal year 2023 amounts not in excess of 110 % of the Capex Budget; or (ii) pursuant to obligations imposed by any Material Contract in effect as of the date of this Agreement;
(l) enter into, modify in any material respect, amend in any material respect respect, waive any material rights under or terminate (other than any Material Contract that has expired in accordance with its terms) any Material Contract except, in each case, for renewals in the ordinary course of businessbusiness on terms that are not less favorable to the Company and its Subsidiaries; provided, provided that any Material Contract (x) described by the definition set forth in Section 1.1(hhh)(iii1.1(zzzz)(iii) shall be exclusively governed by Section 5.2(b5.2(k) and (y) described by the definition set forth in Section 1.1(hhh)(vi1.1(zzzz)(vii) shall be exclusively governed by Section 5.2(f);
(mj) acquire any material 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 by ATC Holdings or from any of its direct or indirect wholly owned subsidiaries of any other direct or indirect wholly owned Subsidiary of the CompanyATC Holdings LLC, (ii) acquisitions purchases of products and services assets in the ordinary course of business not pursuant to (other than for the purpose of acquiring a merger, consolidation or acquisition of stock or assets Person through an alternate structure) or (iii) that do not exceed $5 million 1,000,000 in the aggregate;
(nk) sell, assign, transfer, lease, mortgage, pledge, surrender, encumber, divest, or otherwise dispose ofof (other than pursuant to the expiration thereof in the ordinary course of business), any of the Company’s or its Subsidiaries’ material tangible assetsassets or businesses, other than (i) such sales, assignments, transfers transfers, leases, mortgages, pledges, surrenders, encumbrances, divestitures or other dispositions that (A) are in the ordinary course of business, or (B) do not have a purchase price that exceeds $500,000 and (ii) such mortgages or pledges pursuant to the Company Credit Agreements;
(l) sell, assign, transfer, convey, license, abandon, allow to lapse or otherwise dispose of or impair any material Company Intellectual Property, except (i) sales of products for non-exclusive licenses granted to customers and services or dispositions of tangible assets service providers in the ordinary course of business or and (ii) do not have a net book value or fair market value that exceeds $5 million individually or $10 million the expiration of items of Company Intellectual Property in the aggregateaccordance with their maximum statutory term;
(om) 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 (any Company Related Party, other than transactions transactions, agreements, arrangements or understandings entered into in the ordinary course of business on arms-arm’s length terms with portfolio companies affiliated with with, other than in respect of transactions, agreements, arrangements or understandings relating to employment (which shall not be subject to the Principal Stockholdersfollowing amount), a value of less than $100,000 individually;
(pn) sell, assign, transfer, license, abandon, cancel, permit to lapse or enter the public domain, pledge, encumber or otherwise dispose of make any material Company Owned Intellectual Property, capital expenditure other than expenditures that (xA) the grant of non-exclusive licenses are specifically enumerated in the ordinary course Company’s plan set forth on Section 5.2(n) of business, the Company Disclosure Letter or (yB) pledges or encumbrances under are less than $1,000,000 in any one instance and $2,000,000 in the Company Credit Agreement as in effect on the date hereofaggregate;
(q) 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;
(ro) make any loans, advances or capital contributions to, to or investments in, in any Person (other Person, except for than (i) by the Company or ATC Holdings in any of ATC Holdings’ direct or indirect wholly owned Subsidiaries or (ii) pursuant to operating leases and extensions of credit terms to customers in the ordinary course of business; (ii) advances to directors, officers and other employees for travel and other business-related expensescustomers, in each case in the ordinary course of business and consistent with past practice);
(p) (A) make (outside of the ordinary course of business), change or revoke any material Tax election, (B) enter into any settlement or compromise of any material Tax liability, (C) file any amended material Tax Return, (D) adopt or change any material method of Tax accounting, (E) enter into any closing agreement relating to any material amount of Taxes, (F) agree to extend the statute of limitations in compliance respect of any material amount of Taxes (other than pursuant to automatic extensions of time to file Tax Returns obtained in all the ordinary course of business) or (G) surrender any right to claim a material respects with Tax refund;
(q) negotiate, enter into, amend, extend, or terminate any CBA or recognize or certify any Union as the bargaining representative for any employees of the Company Group’s policies related thereto; or any of its Subsidiaries;
(iiir) loansimplement any layoffs affecting, advances place on unpaid leave or capital contributions tofurlough, or investments inmaterially reduce the hours or weekly pay of, twenty-five (25) or more employees at any direct or indirect wholly-owned Subsidiaries site of the Company; and (iv) in amounts less than $1 million in the aggregateemployment at one time;
(s) enter intowaive or release in writing any non-competition, amend or terminate any collective bargaining agreement non-solicitation, non-disclosure, non-interference, non-disparagement or other labor agreement with restrictive covenant obligation in favor of the Company or any of its Subsidiaries that is material to the Company and its Subsidiaries, taken as a labor union, works council or similar labor organizationwhole;
(t) adopt settle any earn-out obligation of the Company or implement any stockholder rights plan or similar arrangement applicable of its Securities that has become due and payable in Company Securities other than in cash (to the Transactions extent permitted by the terms thereof), as required by the terms thereof as in effect as of the date of this Agreement;
(u) settle or compromise any litigation other than for the payment of cash in aggregate amount not to exceed $250,000 in any one instance or $1,000,000 in the aggregate and other terms that do not impose any material restriction on the business or operations of the Company or any other transaction consummated pursuant to Parent’s rights under of its Subsidiaries (or Parent or any of its Subsidiaries after the Closing);
(v) take any action set forth on Section 5.3(d)5.2(v) of the Company Disclosure Letter; or
(uw) agree, resolve or commit to take any of the actions prohibited by this Section 5.2.
Appears in 1 contract
Samples: Merger Agreement (Atlas Technical Consultants, Inc.)
Forbearance Covenants. Except (aw) as expressly contemplated or permitted by this Agreement, (bx) as set forth in Section 4.2 of the Company Disclosure LetterSchedule, (c) as required by applicable Law, (d) as necessary in response to COVID-19 and any COVID-19 Measures, including to (A) protect the health and safety of the Company’s and its Subsidiaries’ employees, suppliers, partners and other individuals having business dealings with the Company and its Subsidiaries or (B) respond to third-party supply or service disruptions caused by COVID-19 or any COVID-19 Measures; provided that the Company has consulted with Parent and considered in good faith any recommendations of Parent or (ey) as approved in writing by Parent in writing (which approval shall will not be unreasonably withheld, conditioned delayed or delayed and shall be deemed given if Parent provides no written response within (x) five (5) Business Days after a written request by the Company for such consent conditioned), or (yz) one (1) Business Day after a written request as required by the Company for such consent that states that such request is being made in response to an emergency or exigent circumstance)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 VIII VII and the Effective Time, the Company shall not, not do any of the following and shall not permit any of its SubsidiariesSubsidiaries to do any of the following (it being understood and hereby agreed that if any action is expressly permitted by any of the following subsections, to:such action shall be expressly permitted under Section 4.1 also):
(a) amend the Organizational Documents amend, waive or otherwise modify its certificate of the Company, incorporation or any of its Subsidiaries (other than immaterial ministerial changes to the Organizational Documents of any of its Subsidiaries)bylaws or comparable organizational documents;
(b) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganizationreorganization of the Company or any of its operating Subsidiaries;
(c) issue, sell, deliver deliver, grant or agree or authorize, propose or commit to issue, sell sell, deliver or deliver grant (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities or any Subsidiary Securities, including, except for the avoidance of doubt, any Company Equity Awards, except (i) in accordance with the terms issuance and sale of any employment agreements shares of Company Common Stock pursuant to the exercise of Company Options or arrangements set forth on Schedule 5.2(c)(iCompany Warrants outstanding prior to the date hereof or (ii) the granting 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 Options, not to exceed an aggregate of 100,000 (one hundred thousand) Company RSUs Options, that will each be settled at the Effective Time in the manner set forth in Section 1.7(d)(ii), which in each case will have an exercise price equal to or Company PSUsin excess of the Per Share Price (as adjusted pursuant to Section 1.7(b), in each case, connection with any new non-officer employee hires or the promotion of any non-officer employees consistent in effect on amount with past practices or guidelines established prior to the date of this Agreement or granted or entered into after the date hereof in compliance with this Agreement as described in Section 5.2(g) negotiation of the Company Disclosure Letter; transactions contemplated hereby, and (ii) pursuant to the Company ESPP in accordance with its terms and Section 2.8(e) hereof, in each case, including with respect to the satisfaction of Tax withholding andother terms, including vesting, consistent with respect to the Company Options, payment of the exercise pricepast practice;
(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 indirectlyindirectly acquire, repurchase or redeem any of its Company Securities, Securities or Subsidiary Securities (other than (i) the acquisitions withholding 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 Warrants or Company PSUs in connection with Restricted Shares outstanding as of the forfeiture date of such awards, in each case in accordance with their termsthis Agreement);
(e) (i) adjust, split, combine or reclassify any shares of capital stockCompany Securities or Subsidiary Securities, or issue or authorize or propose the issuance of any other Company Securities securities in respect of, in lieu of or in substitution for, shares of its capital stock Company Securities or other equity or voting interestSubsidiary Securities; (ii) declare, set any record dates or payment dates for, 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 Company Securities or other equity or voting interestSubsidiary Securities, or make any other actual, constructive or deemed distribution in respect of the shares of capital stock Company Securities or other equity or voting interestSubsidiary Securities, except for cash dividends made by any direct or indirect wholly-wholly owned Subsidiary of the Company to the Company or one of its other wholly-owned Subsidiaries; (iii) pledge or encumber any Company Securities or Subsidiary Securities; or (iv) modify the terms of any shares of its capital stock Company Securities or other equity or voting interest, or (iv) pledge or encumber any shares of its capital stock or other equity or voting interestSubsidiary Securities;
(f) (i) incur, assumecreate, endorse, guarantee, assume or otherwise become liable for any Indebtedness for borrowed moneyIndebtedness, except other than (A) borrowings as permitted by clause (i) of Section 4.2(h), (B) for an aggregate liability that will not exceed $5,000,000 (five million dollars), (C) under revolving credit facilities in effect on the date hereof and disclosed to Parent, or (D) in connection with trade payables incurred in the ordinary course of business under or 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 Company’s credit facilities as in effect on the date hereof for an amount up obligations of any other Person, except with respect to $20 million, (B) guarantees obligations of direct or credit support provided by the Company or any of its indirect wholly owned Subsidiaries of the obligations 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 to the extent such Indebtedness is in existence on the date Subsidiaries; or (iv) sell, mortgage, lease, transfer, encumber, license, abandon, pledge or otherwise dispose of this Agreement any of its or incurred in compliance with this Section 5.2(f)its Subsidiaries’ material assets, (C) performance bonds and surety bonds entered into tangible or intangible, other than dark fiber sales in the ordinary course of business, and or create or suffer to exist any Lien thereupon (Dother than Permitted Liens) including by merger, consolidation, asset sale or other business combination, other than any Indebtedness among the Company and its Subsidiaries Liens incurred in connection with transactions permitted by clause (i) of Section 4.2(f); or among the Company’s Subsidiaries(v) cancel, release or assign any material indebtedness or claims;
(g) (i) enter into, adopt, create, amend or modify (including accelerating the vesting or paymentacceleration of vesting), modify or terminate any Employee Plan bonus, profit sharing, compensation, severance, termination, option, appreciation right, performance unit, incentive, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, severance or make other employee benefit agreement, trust, plan, fund or grant other arrangement for the compensation, benefit or welfare of any award under director, officer or employee in any Employee Plan manner, except in any such case (including other than with respect to severance) (A) as may be required by applicable law, (B) with respect to employees, other than officers of the Company, increases in salary in the ordinary course of business and consistent with past practice or (C) in the ordinary course of business and consistent with past practice in connection with any equity, bonus new non-officer employee hires or incentive compensation)the promotion of any non-officer employees; or (ii) increase the compensation of any director, officer or employee employee, pay any severance, special bonus or other individual independent contractor 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 Company Group; date hereof, except in any such case (X) as may be required by applicable law 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), (AY) in the ordinary course of business and consistent with respect past practice in connection with any new non-officer employee hires or the promotion of any non-officers employees;
(i) incur or commit to Persons eligible to earn an annual base salary incur any capital expenditures, or wages (or, any obligations or liabilities in connection therewith that individually or in the case of non-employee service providersaggregate, equivalent compensation) are in excess of $200,000 or less; 5,000,000 (five million dollars), except (A) as included in the Company’s capital expenditure budget furnished to Parent prior to the date hereof, (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 Schedule 3.18(a); (C) in conjunction with annual renewal or plan design changes for 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; or (D) any bonus payable with respect to the 2022 fiscal year as incurred in the ordinary course of business consistent with past practice and or (C) in accordance with the terms respect of the annual bonus plan in effect as repair or replacement of the date current assets or properties of this Agreement and set forth on Schedule 3.18(a) and, in each case, as further modified by Section 5.2(g) of the Company Disclosure Letter;
(h) settle, release, waive or compromise any pending or threatened Legal Proceeding other than (A) for an amount of no more than $1,000,000 individually or $5 million in the aggregate (provided no equitable relief has been sought or given), (B) 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 (C) settlements of any Legal Proceedings for an amount not in excess of 110% of the amount, if any, reflected or reserved in the balance sheet (or the notes thereto) of the Company;
(i) materially change the Company’s or its Subsidiaries’ methods, principles or consistent with past 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 material Tax claim or assessment; consent to any extension or waiver of any limitation period with respect to any material 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 unless required by Law; or enter into a closing agreement with any Governmental Authority regarding any material Tax;
(k) incur or commit to incur any capital expenditures other than (i) (x) during fiscal year 2022, amounts not in excess of 110% of the capital expenditure budget for the fiscal year 2022, set forth in Section 5.2(k) of the Company Disclosure Letter (the “Capex Budget”) and (y) during fiscal year 2023 amounts not in excess of 110 % of the Capex Budgetits Subsidiaries); or (ii) pursuant to obligations imposed by pay, discharge, settle or satisfy any Material Contract in effect as of the date of this Agreement;
(l) enter intoliabilities, 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 exceptthe payment, in each case, 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; provided(iii) enter into, that any Material Contract modify, amend or terminate (x) described by the definition set forth in Section 1.1(hhh)(iii) shall be exclusively governed by Section 5.2(b) and any Contract which if so entered into, modified, amended or terminated would have a Company Material Adverse Effect or (y) described by the definition set forth in Section 1.1(hhh)(vi) 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 (including by merger, consolidation or acquisition of stock or assets), other than (i) in or from any wholly owned Subsidiary of the Company, (ii) acquisitions of products and services except in the ordinary course of business not pursuant to a mergerbusiness, consolidation or acquisition of stock or assets any Material Contract; or (iii) that do not exceed $5 million in the aggregate;
(n) sell, assign, transfer, or otherwise dispose of, any of the Company’s or its Subsidiaries’ material tangible assets, other than such sales, assignments, transfers or other dispositions that (i) sales of products and services or dispositions of tangible assets in the ordinary course of business or (ii) do not have a net book value or fair market value that exceeds $5 million individually or $10 million in the aggregate;
(oiv) engage in any transaction with, or enter into any agreement, arrangement or understanding with, with any Affiliate of the Company or other Person covered by Item 404 of Regulation S-K promulgated by under the SEC Exchange Act that would be required to be disclosed pursuant to under such Item 404 (other than transactions entered those in existence on the date of this Agreement;
(i) compromise or settle any pending or threatened material Legal Proceeding having a value or in an amount not covered by insurance in excess of $1,000,000 (one million dollars);
(j) except as may be required by applicable law or by GAAP (including as a result of any change in law or GAAP that becomes effective after the date of this Agreement), make any change in any of the accounting methods or principles used by it;
(i) change its material Tax accounting methods, principles or practices, except as required by GAAP or applicable law; (ii) make or change any material Tax election; (iii) settle or compromise any material U.S. federal, state, local or non-U.S. Tax liability; (iv) fail to file any material Tax Return when due (taking into account lawful extensions of the due date for any Tax Return) or fail to cause such Tax Returns when filed to be complete and accurate in all material respects; or (v) consent to any extension or waiver of any limitation period with respect to any claim or assessment for material Taxes;
(l) acquire (including by merger, consolidation or acquisition of stock or assets) any other business, material property or assets thereof or any material equity interest therein in excess of $10,000,000 (ten million dollars) in the aggregate; provided that the Company shall not, and shall not permit its Subsidiaries to, acquire any such business, material property or assets from any Affiliate (including any director or officer or any Affiliate thereof) of the Company;
(m) implement any employee layoffs that could implicate the Worker Adjustment and Retraining Notification Act of 1988, as amended, or any similar or related state or local law, regulation, or ordinance, or enter into any collective bargaining agreement;
(n) enter into a material line of business outside of its existing business;
(o) except as required by applicable law or in the ordinary course of business on arms-length terms consistent with portfolio companies affiliated with past practice (including as contemplated by the Principal StockholdersCompany’s 2012 operating plan);, (i) launch any new programming or other service, (ii) change the rates charged the Company and its Subsidiaries for any class of service or any other existing customer charges (including entering into customer billing services agreements providing for launch incentives or free coverage periods), or (iii) institute any new charges or add or delete or change the mix or channel positions of any programming services; or
(p) sell, assign, transfer, license, abandon, cancel, permit to lapse or enter the public domain, pledge, encumber or otherwise dispose of any material Company Owned Intellectual Property, other than (x) the grant of non-exclusive licenses in the ordinary course of business, or (y) pledges or encumbrances under the Company Credit Agreement as in effect on the date hereof;
(q) 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;
(r) 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 Group’s policies related thereto; (iii) loans, advances or capital contributions to, or investments in, any direct or indirect wholly-owned Subsidiaries of the Company; and (iv) in amounts less than $1 million in the aggregate;
(s) enter into, amend or terminate any collective bargaining agreement or other labor agreement with a labor union, works council or similar labor organization;
(t) adopt or implement any stockholder rights plan or similar arrangement applicable to the Transactions or any other transaction consummated pursuant to Parent’s rights under Section 5.3(d); or
(u) agree, resolve or commit agree to take any of the actions prohibited by described in this Section 5.24.2. The parties hereto acknowledge and hereby agree that the restrictions set forth in this Section 4.2 and elsewhere in this Agreement 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